A critical look on the role of myths in the neoliberal society was undertaken by Robert Bonomo in his artcile
We're All Zombies (
The Unz ReviewFeb 23, 2015). He compare behaviour of financial oligarchy in the neoliberal
society with the behaviour of zombies:
The great psychologist and mystic Carl Jung was asked if a myth could be equated to a collective dream
and he answered this way, “A myth…is the product of an unconscious process in a particular social group, at a particular time, at
a particular place. This unconscious process can naturally be equated with a dream. Hence anyone who ‘mythologizes,’ that is,
tells myths, is speaking out of this dream.”
Many of the themes in our popular culture are conscious story telling devices with the definite purpose
of social engineering/control, but others seem to just emerge from the collective unconscious like the stuff of dreams.
For example essential quality of the zombie myth is its unquenchable hunger. No amount of flesh
and blood seems able to quench the longing to consume live human flesh. Modern man has a similar problem -- no amount of money,
sex, gadgets, job titles, drugs, entertainment, pornography, art, religion or gurus seem able to quench our thirst. We live in
constant hunger. If we equate the zombie ‘hunger’ for flesh to the human desire for money, the comparison becomes almost uncanny.
Most adult humans spend most of their day either making money or spending it while being constantly bombarded with
propaganda/advertising to keep them hungry.
From the most humble street vendor to
the billionaires on CNBC, no one seems to ever have enough money. Zombies need to eat live human flesh and
money is at its core, human labor. Our craving for money is really the craving for the work of others, for
the sweat and blood of millions to furnish us with unlimited amounts of food and consumer goods.
The vast majority of Westerners have ceased to create anything tangible.
Only one in five Americans actually produce anything. Eating what one produces on a farm or trading
manufactured goods for food connects us to life. But when people spend ten hours hours a day in an office
looking at a computer screen and two hours in traffic, somehow eating, and living, become abstract. What are
we actually doing to create the food , heat, and the shelter we need?
Modern man is almost entirely without
out any practical skills. He doesn’t know how to grow food, hunt animals or build a house. He uses all sorts
of electronic tools whose core technologies he doesn’t really understand and which he doesn’t have the
slightest idea how to fix.
This set of circumstances is a recent
development in human history, beginning in the 18th century and growing exponentially in the last 30 years
during the information revolution. We are helpless slaves to technologies we don’t understand and to media
that programs us to believe all sorts of propaganda designed to keep us from actually thinking critically.
Neoliberals created amazingly elaborate set of myths. Which are enforced via universities and MSM very effectivly. Both in
quality of myths and the quility of indoctibation they are successfully competing with Marxism and
Trotskyism. Like Bolsheviks they creates its special "Neoliberal-Speak" a language for
indoctrinated, much like "Marxism-speak" in the USSR.
We will list only some of the most popular neoliberal myths. Among them
Our work will be guided by a shared belief that market principles,
open trade and investment regimes, and effectively regulated financial markets
foster the dynamism, innovation, and entrepreneurship that are essential
for economic growth, employment, and poverty reduction. […]
We recognize
that these reforms will only be successful if grounded in a commitment to
free market principles, including the rule of law, respect for private
property, open trade and investment, competitive markets, and efficient,
effectively regulated financial systems. These principles are essential
to economic growth and prosperity and have lifted millions out of
poverty, and have significantly raised the global standard of living.
Recognizing the necessity to improve financial sector regulation, we must
avoid over-regulation that would hamper economic growth and exacerbate the
contraction of capital flows, including to developing countries. We underscore
the critical importance of rejecting protectionism and not turning
inward in times of financial uncertainty.
-Declaration from the G-20 Washington Summit 2008
Amid the burgeoning financial crisis, the Group of Twenty (G-20) met in
2008 for the Washington Summit, attended by then President Rodríguez Zapatero of
the ruling Socialist party (PSOE), where the world’s wealthiest nations called for
concerted international cooperation to reform the financial sector, favorable to
reviving global flows of capital.
The many points identified in the declaration
(the need to strengthen transparency and accountability, enhance regulation, promote
integrity in the financial markets, reform international financial institutions,
and foster prudential oversight and risk management), may have been a legible indicator
that the world’s leading economic powers were coming to terms with the responsibility
of unethical business practices and systemic flaws, among other factors, in the
successive tumbling of international markets in a domino effect ( Declaration of
the Summit ).
Yet, despite the different nuances of policy positions in the
European Union at large, political and financial powers have upheld structural reform
as the basis from which to pursue deeper austerity measures and labor reforms that
favor precarity, thereby dismantling the welfare state and social rights in Spain
under the aegis of neoliberal reform. In the neoliberal policies of the EU, reducing
the deficit by cutting public expenditures on social measures (on public healthcare,
education, pensions, social programs, and so on) while leaving others untouched
(investments in private enterprise, the military, national security programs, and
so on) has been expressed, and indeed imposed, as part of the only solution
to the crisis in Spain, as elsewhere. According to this logic, as the G-20 declaration
asserts, greater competition, private investments, and the surveillance and tempered
regulation of the free market. In sum, free market activity with minimal state intervention,
as deemed necessary equate directly to greater opportunity, entrepreneurship, and
prosperity that deliver poverty reduction and a higher standard of living on a global
scale. And yet, in extensive literature on the effects of neoliberal policies in
general and of austerity in particular, nothing could be farther from the social
reality experienced by world populations, as these reforms have correlated to greater
inequality, unrest, disease, and mortality.
In the forging of its myth, neoliberal policies are asserted by the G-20
as providing a better quality of life for all. On what bases is the claim made that
a higher standard of living follows naturally from austerity and the "flexibilization"
of labor, among other neoliberal reforms? Myth, writes Roland Barthes, bears an
ideological mechanics that ‘naturalizes’ its constructed character in
order to assert and legitimize itself as truth. Exemplified in
Barthes’ reading of a magazine photograph in which a soldier of African descent
salutes the French flag, myth produces a sleight of hand here, forged from an image
of colonial subservience to the French Empire that collapses the signified into
a signifier
These reforms have proved historically “damaging [to] the welfare of the common
people in those countries, causing enormous suffering,” writes Vicenç Navarro. “[T]hese
policies had consequences for the welfare and quality of life of ordinary people,
creating death, disease, and social unrest” (“The IMF’s Mea Culpa?”).
Also see Basu and Stuckler; Blyth; Harvey, A Brief History of Neoliberalism ; and Lustig
and her contributors, to name a few. by reducing its connotative meaning into
a self-evident truth: “that France is a great Empire, that all her sons, without
any color discrimination, faithfully serve under her flag, and that there is no
better answer to the detractors of an alleged colonialism than the zeal shown by
this Negro [ sic] in serving his so-called oppressors” ( Mythologies 116).
By attributing the constructed character of presumptions to nature, myth may
become an accomplice to legitimize power relations by forging an alibi. Here, to
the ‘natural order’ of the cultural (and ethnic) ‘ superiority ’ of the metropolis
and its right to (military) rule over the colonial subject, demonstrated in the
subordinate’s allegiance to the empire. In this sense, as in Barthes’ s reading,
myth may adopt or invert the arguments of its opposition, despite the lack of veracity
in its production of meanings or claims. “Myth is a value, truth is no guarantee
for it; nothing prevents it from being a perpetual alibi: it is enough that
its signifier has two sides for it always to have an ‘elsewhere’ at its disposal”—
an elsewhere which Barthes locates in the empire’s benevolent intentions
as its alibi to implicit racial subordination and colonial oppression (123). Thereby
myth becomes indisputable material if its alibi is taken literally, at once
passing itself off as a natural order that has always been and that bears a malleable
disposition to be appropriated in further myth-making, say, in Barthes’ s reading,
at the service of imperial power and its legitimacy of rule. Let us return then
to the assertion that neoliberal governmentality delivers greater good on a global
scale.
The myth that neoliberalism produces poverty reduction and social wellbeing for
all has become an alibi for the dismantling of the welfare state in Spain and with
it, an accomplice to the dismantling of social rights, on the one hand, and to the
channeling of state coffers into private interests to the benefit of banks, financial
institutions, and private business, on the other. Such a polemic has been flagged
by economist Vicenç Navarro, who argues that Spain’s ‘ oft’ multi-billion euro
bailout from the European Central Bank (ECB) does not alleviate the crisis of credit-lending
in Spain, as this capital is destined for Spanish banks to pay off interest on loans
from European financial institutions abroad, while the Spanish state incurs this
burden of debt, on the one hand, and must also adopt austerity policies to dismantle
social welfare programs, on the other (“The Euro Is Not in Trouble”). Public funds,
in other words, are redirected to private interests in neoliberal practice at the
expense of labor
“If I focus on a full signifier, in which I clearly distinguish the meaning and
the form, and consequently the distortion which the one imposes on the other,
I undo the signification of the myth, and I receive the latter as an imposture”
(128). See Roland Barthes,
Mythologies
As Navarro notes, the ECB and the
International Monetary Fund (IMF) have placed conditions on Spain’s eligibility
to receive financial assistance by urging the government to pursue measures that
would increase the flexibility of labor, reduce public expenditures on pensions,
and privatize the welfare state — in sum, to deepen neoliberal reforms (“The Euro Is
Not in Trouble”).
One form of what David Harvey calls the “accumulation by dispossession”
of capital, these measures entail the “reversion to the private domain of common
property rights won through past class struggles (the right to a state pension,
to welfare, or to national health care),” which often, if not exclusively, benefit
the greatest fortunes at the expense of social programs (“The ‘New’ Imperialism”
75).
That is, where the private accumulation of capital reaches its limits of projected
growth, the sustainability of a given enterprise must be secured through dispossession,
through takeovers, expropriation, the payment of private debts from public funds,
and so on. However, one should not presume that these reforms are adopted coercively
alone, as government officials in Spain’s predominant left and right parties (PSOE
and PP, respectively) have welcomed likeminded policies, historically, in order
to meet the accords for Spain’s adhesion to the European Union after the Maastricht
Treaty of 1992.
Amid neoliberal governance, contemporary times have witnessed the
rise of new transnational actors and financial players. The state, in other words,
experiences a crisis of sovereignty for its accentuated lack of autonomous decision-making
on fiscal and labor matters, in which government officials and policy-makers often
succumb to corporate, banking, and financial interests beyond the state, and sometimes
do so voluntarily. This circumstance is not new, however, nor is it unique to Spain.
In the 1970s, foreign credit lending from financial institutions in the United States
would wield powerful leverage to reshape strategically the economic policies of
indebted countries.
As David Harvey notes, after Mexico was pushed into default
on its debt to New York financial institutions in 1982-84, this circumstance
provided the test case for the IMF and United States government to work in concert
to demand neoliberal reforms of Mexico towards greater labor flexibility (the
deregulation of labor protections for workers), free market laws, and privatization
(, 28-31). Echoing the test case of Mexico, today the European Commission (EC),
the IMF, and the ECB, known popularly as the Troika, have urged the European
member states of intervened economies to pursue further neoliberal “structural
adjustments”
"... From the 1980s to 2008, neoliberal politics and policies succeeded in expanding inequality around the world. The political climate Ayn Rand celebrated-the reign of brutal capitalism-intensified. Though Ayn Rand's popularity took off in the 1940s, her reputation took a dive during the 1960s and '70s. Then after her death in 1982, during the neoliberal administrations of Ronald Reagan in the United States and Margaret Thatcher in the United Kingdom, her star rose once more. (See chapter 4 for a full discussion of the rise of neoliberalism.) ..."
"... During the global economic crisis of 2008 it seemed that the neoliberal order might collapse. It lived on, however, in zombie form as discredited political policies and financial practices were restored. ..."
"... We are in the midst of a major global, political, economic, social, and cultural transition - but we don't yet know which way we're headed. The incoherence of the Trump administration is symptomatic of the confusion as politicians and business elites jockey with the Breitbart alt-right forces while conservative evangelical Christians pull strings. The unifying threads are meanness and greed, and the spirit of the whole hodgepodge is Ayn Rand. ..."
"... The current Trump administration is stuffed to the gills with Rand acolytes. Trump himself identifies with Fountainhead character Howard Roark; former secretary of state Rex Tillerson listed Adas Shrugged as his favorite book in a Scouting magazine feature; his replacement Mike Pompeo has been inspired by Rand since his youth. Ayn Rand's influence is ascendant across broad swaths of our dominant political culture - including among public figures who see her as a key to the Zeitgeist, without having read a worth of her writing.'' ..."
"... Rand biographer Jennifer Burns asserts simply that Ayn Rand's fiction is "the gateway drug" to right-wing politics in the United States - although her influence extends well beyond the right wing ..."
"... The resulting Randian sense of life might be called "optimistic cruelty." Optimistic cruelty is the sense of life for the age of greed. ..."
"... The Fountainhead and especially Atlas Shrugged fabricate history and romanticize violence and domination in ways that reflect, reshape, and reproduce narratives of European superiority' and American virtue. ..."
"... It is not an accident that the novels' fans, though gender mixed, are overwhelmingly white Americans of the professional, managerial, creative, and business classes." ..."
"... Does the pervasive cruelty of today's ruling classes shock you? Or, at least give you pause from time to time? Are you surprised by the fact that our elected leaders seem to despise people who struggle, people whose lives are not cushioned and shaped by inherited wealth, people who must work hard at many jobs in order to scrape by? If these or any of a number of other questions about the social proclivities of our contemporary ruling class detain you for just two seconds, this is the book for you. ..."
"... As Duggan makes clear, Rand's influence is not just that she offered a programmatic for unregulated capitalism, but that she offered an emotional template for "optimistic cruelty" that has extended far beyond its libertarian confines. Mean Girl is a fun, worthwhile read! ..."
"... Her work circulated endlessly in those circles of the Goldwater-ite right. I have changed over many years, and my own life experiences have led me to reject the casual cruelty and vicious supremacist bent of Rand's beliefs. ..."
"... In fact, though her views are deeply-seated, Rand is, at heart, a confidence artist, appealing only to narrow self-interest at the expense of the well-being of whole societies. ..."
Mean Girls, which was based on interviews with high school girls conducted by Rosalind Wiseman for her 2002 book Queen Bees and
War/tubes, reflects the emotional atmosphere of the age of the Plastics (as the most popular girls at Actional North Shore High are
called), as well as the era of Wall Street's Gordon Gekko, whose motto is "Greed is Good."1 The culture of greed is the hallmark
of the neoliberal era, the period beginning in the 1970s when the protections of the U.S. and European welfare states, and the autonomy
of postcolonial states around the world, came under attack. Advocates of neoliberalism worked to reshape global capitalism by freeing
transnational corporations from restrictive forms of state regulation, stripping away government efforts to redistribute wealth and
provide public services, and emphasizing individual responsibility over social concern.
From the 1980s to 2008, neoliberal politics and policies succeeded in expanding inequality around the world. The political
climate Ayn Rand celebrated-the reign of brutal capitalism-intensified. Though Ayn Rand's popularity took off in the 1940s, her reputation
took a dive during the 1960s and '70s. Then after her death in 1982, during the neoliberal administrations of Ronald Reagan in the
United States and Margaret Thatcher in the United Kingdom, her star rose once more. (See chapter 4 for a full discussion of the rise
of neoliberalism.)
During the global economic crisis of 2008 it seemed that the neoliberal order might collapse. It lived on, however, in zombie
form as discredited political policies and financial practices were restored. But neoliberal capitalism has always been contested,
and competing and conflicting political ideas and organizations proliferated and intensified after 2008 as well.
Protest politics blossomed on the left with Occupy Wall Street, Black Lives Matter, and opposition to the Dakota Access oil pipeline
at the Standing Rock Sioux reservation in the United States, and with the Arab Spring, and other mobilizations around the world.
Anti-neoliberal electoral efforts, like the Bernie Sanders campaign for the U.S. presidency, generated excitement as well.
But protest and organizing also expanded on the political right, with reactionary populist, racial nationalist, and protofascist
gains in such countries as India, the Philippines, Russia, Hungary, and the United States rapidly proliferating. Between these far-right
formations on the one side and persistent zombie neoliberalism on the other, operating sometimes at odds and sometimes in cahoots,
the Season of Mean is truly upon us.
We are in the midst of a major global, political, economic, social, and cultural transition - but we don't yet know which
way we're headed. The incoherence of the Trump administration is symptomatic of the confusion as politicians and business elites
jockey with the Breitbart alt-right forces while conservative evangelical Christians pull strings. The unifying threads are meanness
and greed, and the spirit of the whole hodgepodge is Ayn Rand.
Rand's ideas are not the key to her influence. Her writing does support the corrosive capitalism at the heart of neoliberalism,
though few movers and shakers actually read any of her nonfiction. Her two blockbuster novels, 'The Fountainpen and Atlas Shrugged,
are at the heart of her incalculable impact. Many politicians and government officials going back decades have cited Rand as a formative
influence-particularly finance guru and former Federal Reserve chairman Alan Greenspan, who was a member of Rand's inner circle,
and Ronald Reagan, the U.S. president most identified with the national embrace of neoliberal policies.
Major figures in business and finance are or have been Rand fans: Jimmy Wales (Wikipedia), Peter Thiel (Paypal), Steve Jobs (Apple),
John Mackey (Whole Foods), Mark Cuban (NBA), John Allison (BB&T Banking Corporation), Travis Kalanik (Uber), Jelf Bezos (Amazon),
ad infinitum.
There are also large clusters of enthusiasts for Rand's novels in the entertainment industry, from the 1940s to the present-from
Barbara Stanwyck, Joan Crawford, and Raquel Welch to Jerry Lewis, Brad Pitt, Angelina Jolie, Rob Lowe, Jim Carrey, Sandra Bullock,
Sharon Stone, Ashley Judd, Eva Mendes, and many more.
The current Trump administration is stuffed to the gills with Rand acolytes. Trump himself identifies with Fountainhead character
Howard Roark; former secretary of state Rex Tillerson listed Adas Shrugged as his favorite book in a Scouting magazine feature; his
replacement Mike Pompeo has been inspired by Rand since his youth. Ayn Rand's influence is ascendant across broad swaths of our dominant
political culture - including among public figures who see her as a key to the Zeitgeist, without having read a worth of her writing.''
But beyond the famous or powerful fans, the novels have had a wide popular impact as bestsellers since publication. Along
with Rand's nonfiction, they form the core texts for a political/ philosophical movement: Objectivism. There are several U.S.- based
Objectivist organizations and innumerable clubs, reading groups, and social circles. A 1991 survey by the Library of Congress and
the Book of the Month Club found that only the Bible had influenced readers more than Atlas Shrugged, while a 1998 Modern Library
poll listed The Fountainhead and Atlas Shrugged as the two most revered novels in English.
Atlas Shrugged in particular skyrocketed in popularity in the wake of the 2008 financial crash. The U.S. Tea Party movement, founded
in 2009, featured numerous Ayn Rand-based signs and slogans, especially the opening line of Atlas Shrugged: "Who is John Galt?" Republican
pundit David Frum claimed that the Tea Party was reinventing the GOP as "the party of Ayn Rand." During 2009 as well, sales of Atlas
Shrugged tripled, and GQ_magazine called Rand the year's most influential author. A 2010 Zogby poll found that 29 percent of respondents
had read Atlas Shrugged, and half of those readers said it had affected their political and ethical thinking.
In 2018, a business school teacher writing in Forbes magazine recommended repeat readings: "Recent events - the bizarro circus
that is the 2016 election, the disintegration of Venezuela, and so on make me wonder if a lot of this could have been avoided bad
we taken Atlas Shrugged's message to heart. It is a book that is worth re-reading every few years."3
Rand biographer Jennifer Burns asserts simply that Ayn Rand's fiction is "the gateway drug" to right-wing politics in the
United States - although her influence extends well beyond the right wing.4
But how can the work of this one novelist (also an essayist, playwright, and philosopher), however influential, be a significant
source of insight into the rise of a culture of greed? In a word: sex. Ayn Rand made acquisitive capitalists sexy. She launched thousands
of teenage libidos into the world of reactionary politics on a wave of quivering excitement. This sexiness extends beyond romance
to infuse the creative aspirations, inventiveness, and determination of her heroes with erotic energy, embedded in what Rand called
her "sense of life." Analogous to what Raymond Williams has called a "structure of feeling," Rand's sense of life combines the libido-infused
desire for heroic individual achievement with contempt for social inferiors and indifference to their plight.5
Lauren Berlant has called the structure of feeling, or emotional situation, of those who struggle for a good life under neoliberal
conditions "cruel optimism"-the complex of feelings necessary to keep plugging away hopefully despite setbacks and losses.'' Rand's
contrasting sense of life applies to those whose fantasies of success and domination include no doubt or guilt. The feelings of aspiration
and glee that enliven Rand's novels combine with contempt for and indifference to others. The resulting Randian sense of life
might be called "optimistic cruelty." Optimistic cruelty is the sense of life for the age of greed.
Ayn Rand's optimistic cruelty appeals broadly and deeply through its circulation of familiar narratives: the story of "civilizational"
progress, die belief in American exceptionalism, and a commitment to capitalist freedom.
Her novels engage fantasies of European imperial domination conceived as technological and cultural advancement, rather than as
violent conquest. America is imagined as a clean slate for pure capitalist freedom, with no indigenous people, no slaves, no exploited
immigrants or workers in sight. The Fountainhead and especially Atlas Shrugged fabricate history and romanticize violence and
domination in ways that reflect, reshape, and reproduce narratives of European superiority' and American virtue.
Their logic also depends on a hierarchy of value based on radicalized beauty and physical capacity - perceived ugliness or disability'
are equated with pronounced worthlessness and incompetence.
Through the forms of romance and melodrama, Rand novels extrapolate the story of racial capitalism as a story of righteous passion
and noble virtue. They retell The Birth of a Ntation through the lens of industrial capitalism (see chapter 2). They solicit positive
identification with winners, with dominant historical forces. It is not an accident that the novels' fans, though gender mixed,
are overwhelmingly white Americans of the professional, managerial, creative, and business classes."
Ayn Rand is a singular influence on American political thought, and this book brilliantly unfolds how Rand gave voice to the
ethos that shapes contemporary conservatism. Duggan -- whose equally insightful earlier book Twilight of Equality offered an analysis
of neoliberalism and showed how it is both a distortion and continuation of classical liberalism -- here extends the analysis
of American market mania by showing how an anti-welfare state ethos took root as a "structure of feeling" in American culture,
elevating the individual over the collective and promoting a culture of inequality as itself a moral virtue.
Although reviled by the right-wing press (she should wear this as a badge of honor), Duggan is the most astute guide one could
hope for through this devastating history of our recent past, and the book helps explain how we ended up where we are, where far-right,
racist nationalism colludes (paradoxically) with libertarianism, an ideology of extreme individualism and (unlikely bed fellows,
one might have thought) Silicon Valley entrepreneurship.
This short, accessible book is essential reading for everyone who wants to understand the contemporary United States.
Does the pervasive cruelty of today's ruling classes shock you? Or, at least give you pause from time to time? Are you
surprised by the fact that our elected leaders seem to despise people who struggle, people whose lives are not cushioned and shaped
by inherited wealth, people who must work hard at many jobs in order to scrape by? If these or any of a number of other questions
about the social proclivities of our contemporary ruling class detain you for just two seconds, this is the book for you.
Writing with wit, rigor, and vigor, Lisa Duggan explains how Ayn Rand, the "mean girl," has captured the minds and snatched
the bodies of so very many, and has rendered them immune to feelings of shared humanity with those whose fortunes are not as rosy
as their own. An indispensable work, a short read that leaves a long memory.
Mean Girl offers not only a biographical account of Rand (including the fact that she modeled one of her key heroes on a serial
killer), but describes Rand's influence on neoliberal thinking more generally.
As Duggan makes clear, Rand's influence is not just that she offered a programmatic for unregulated capitalism, but that
she offered an emotional template for "optimistic cruelty" that has extended far beyond its libertarian confines. Mean Girl is
a fun, worthwhile read!
Sister, June 3, 2019
Superb poitical and cultural exploration of Rand's influence
Lisa Duggan's concise but substantive look at the political and cultural influence of Ayn Rand is stunning. I feel like I've
been waiting most of a lifetime for a book that is as wonderfully readable as it is insightful. Many who write about Rand reduce
her to a caricature hero or demon without taking her, and the history and choices that produced her seriously as a subject of
cultural inquiry. I am one of those people who first encountered Rand's books - novels, but also some nonfiction and her play,
"The Night of January 16th," in which audience members were selected as jurors – as a teenager.
Under the thrall of some right-wing locals, I was so drawn to Rand's larger-than-life themes, the crude polarization of "individualism"
and "conformity," the admonition to selfishness as a moral virtue, her reductive dismissal of the public good as "collectivism."
Her work circulated endlessly in those circles of the Goldwater-ite right. I have changed over many years, and my own life
experiences have led me to reject the casual cruelty and vicious supremacist bent of Rand's beliefs.
But over those many years, the coterie of Rand true believers has kept the faith and expanded. One of the things I value about
Duggan's compelling account is her willingness to take seriously the far reach of Rand's indifference to human suffering even
as she strips away the veneer that suggests Rand's beliefs were deep.
In fact, though her views are deeply-seated, Rand is, at heart, a confidence artist, appealing only to narrow self-interest
at the expense of the well-being of whole societies.
I learned that the hard way, but I learned it. Now I am recommending Duggan's wise book to others who seek to understand today's
cultural and political moment in the United States and the rise of an ethic of indifference to anybody but the already affluent.
Duggan is comfortable with complexity; most Randian champions or detractors are not.
I said: Okay, I get it, if you lend them the money, then they can pay. This is like a
Ponzi scheme: you lend the investors enough to pay the interest and keep current. That
was my introduction to how the balance of payments worked between the United States and the
third world and how political the whole credit problem was.
Free markets are only free for parasites and usurers to run their schemes. Lolbertarianism
is an ideology of our (((friends))), and I think its adherents are dupes. I no longer think
they are well meaning dupes either, they have a personality defect, where they lack
empathy.
The tendency of liberalism to deny the consequences of society stems from its myth of the
'individual'. Liberalism imagines a world of rational subjects each making decisions in a
sovereign way (Thatcher's 'there is no such thing as society'). This allows capitalism to
erect a moral framework that represents the consequences of an economy as the consequences of
personal decisions. In this way, success (wealth) is 'reward' and failure (poverty) is
punishment. It's what Max Weber called 'secular Protestantism'. The working classes
participate in this evaluative ideology (Gramsci); it is the source of their self-loathing
and the reason they always vote against their own best interests. They all believe their lack
of means is a consequence of their lack of intelligence, work ethic, failure of
entrepreneurial spirit, etc etc. Here is Marx's own critique of the way liberalism washes its
hands of the effects of capitalism:
"The... theory... which is also expressed as a law of nature, that population grows faster
than the means of subsistence, is the more welcome to the bourgeois as it silences his
conscience, makes hard-heartedness into a moral duty and the consequences of society into
the consequences of nature, and finally gives him the opportunity to watch the destruction
of the proletariat by starvation as calmly as any other natural event without bestirring
himself, and, on the other hand, to regard the misery of the proletariat as its own fault
and to punish it. To be sure, the proletarian can restrain his natural instinct by reason,
and so, by moral supervision, halt the law of nature in its injurious course of
development." - Karl Marx, Wages, December 1847
While it may be superficially true that our poor Texan could have cunningly evaded copping
the wholesale price the fact remains that he is -- as all Texans are -- a victim of a system
structurally designed to extract exorbitant rents from his need for power. A socialist system
would not see him as a battery hen to be skimmed or as an atomized individual who should
'sink or swim' (in the words of that local mayor) but would seek to prevent power, food,
water, air, housing, education, health, etc etc from being hijacked and sequestered by vested
interests accessible only by outrageous fees. Socialism would outlaw rent-seeking, which is
the theft of meaningful life by carpetbaggers and their corrupt partners in government.
'Freedom' under neo-liberal capitalism is all of the negative type. You are free to be as
greedy and arrogant as you like, as rich, ie as big a thief, as you like, and as poor as you
like. You are to ignore the liberal injunction that your freedom must not interfere with that
of others, and screw as many patsies as you desire. You are 'free' to vote for two or so near
identical parties, then have no 'freedom' but that which your money buys you. 'Freedom' is
the biggest lie of all Big Lies.
Those who have the most to say about the burdens of government regulation tend to be silent
about the enormous infrastructure supporting a very specific conception of corporate
personhood, limited liability, and intellectual property.
It's like an industrialist looking out upon a vast landscape of canals, dams, and levees, and
complaining at the "unnatural" construction of a bridge putting a ferryman out of a job.
It's still not clear exactly what the clinic's customers were being injected with...
My guess is that it's something less hazardous to your health than the real vaccine, but
still not what the greatest scientist of all time, Dr. Fauci, and our greatest president of
all time, His Excellency Joe Biden, have mandated that you take.
Mike Konczal has a new book, Freedom from the Market ( Bookshop.org locator , Amazon ). I've been wanting to write about this book for a while,
but first had to wait for it to come out, and then had my working life banjaxed by the madness
of the last few weeks. But it is a great book that looks to remake the American debate about
freedom and largely succeeds. Full disclosure: Mike is a friend of the 'see very occasionally
but like very strongly' variety; I also read an early version of the mss and commented on
it.
When I say that this book is about the American debate, I mean it. Non-Americans will learn
from the book, but they aren't the target audience. The examples that Konczal draws on to
inform modern Americans are drawn from their own, largely forgotten history. This could be seen
as a reflection of the American parochialism that Konczal mentions in passing, but it is, I
think, a deliberate political move. It also is in some ways refreshing – rather than
weaving fairytales about the wonders of Fantasy Sweden or Fantasy Germany, it tells stories
where the ambiguities are necessarily more visible to its readers.
Still, it provides measured hope. By drawing on what has happened in American history,
Konczal makes it easier for Americans to understand that things they might not believe are
possible in America must be, because they have been. He rescues moments such as the WWII
government run daycare centers that allowed women to work, or the use of the power of the
federal state to force through the integration of Southern hospitals, from the enormous
condescension of posterity. Notably, although he doesn't dwell on this point, many of these
changes began at moments that seem shittier and more despairing than our own.
Konczal neither provides a standard linear history, nor a policy textbook. Instead, he is
claiming an alternative American tradition, which has not looked to the market as its
apotheosis, but instead has sought to free Americans from its random vagaries. His history
explains how America has responded collectively to the real and expressed needs of publics, who
have organized to fight for them. And it does so in the plain language that he mentions in
passing was necessary to allow ordinary people to organize and understand who was trying to
stop them.
Konczal's fundamental claim is that people who attribute freedom to markets miss out on much
of the story. Equally important is a notion of freedom from markets, "rooted in public
programs that genuinely serve people and checking market dependency." This notion goes back
much further in time than the New Deal. The nineteenth century is sometimes depicted as a reign
of laissez-faire, both by those who admired it and deplored it. Konczal argues instead that
there was an emerging sense of public needs – and imperfect ways in which the government
provided for them. This helps us understand, for example, the provision of public land through
the Homestead Act and the land grant universities.
The nineteenth century notion of the public was clearly horribly flawed and contradictory
– it did not include slaves or Native Americans. Some, like Horace Greeley ended up
fleeing these contradictions into the welcoming arms of free market absolutism. But within
these contradictions lay possibilities that opened up in the twentieth century. Konczal builds,
for example on Eric Schickler's work to argue that as the New Deal began to provide concrete
benefits to African Americans, it created a new relationship between them and the Democratic
Party, breaking up the old coalition that had held Jim Crow together.
The organizing ideas in this book are Polanyian – the stresses of the market lead to
social rupture, which may in turn create the conditions for political mobilization. But Konczal
doesn't depict this as necessary or inevitable – people's choices have consequences. He
is also more precise than Polanyi in his understanding of how change happens – through
social movements and the state:
While the Supreme Court can be effective at holding back change and enforcing already
existing power structures, it is actually very weak at creating new reform itself. It
controls no funding and is dependent on elite power structures to carry out its decisions.
What really creates change is popular mobilization and legislative changes.
Finally, Konczal not only employs Polanyi's ideas, but the ideas of Polanyi's friendly
critics like Quinn Slobodian, to describe how modern Hayekians have sought to "encase" the
market order in institutions and practices that are hard to overturn. Property rights aren't
the foundation of liberty, as both nineteenth century jurists and twentieth century economists
would have it. They are a product of the choices of the state, and as such intensely
political.
This allows Konczal to turn pragmatism against the Hayekians. Hayek's notion of spontaneous
order is supposed to be evolutionary, to provide a more supple response to what people (thought
of as individuals want). But if there is a need to provide collective goods for people that
cannot be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on
adaptation.
The efforts of Hayekians to enforce binding legal constraints, to cripple the gathering of
the collective knowledge that can guide collective action, to wink at legal doctrines intended
to subvert social protections against the market; all these prevent the kinds of evolutionary
change that are necessary to respond to changing circumstances. Konczal makes it clear that
Oliver Wendell Holmes was no left-winger – but his pragmatist criticisms of the rigid and
doctrinaire laissez-faire precepts of his colleagues rings true. Their "willingness to use a
very specific understanding of economics to override law writes a preferential understanding of
economics into the constitution itself." Although Konczal wrote this book before the current
crisis, he describes Holmes as mentioning compulsory vaccination laws as one of the ways in
which government interference in private decisions can have general social benefits. The
wretched contortions of libertarians and market conservatives over anti-pandemic measures
during the last several months, and the consequences of their intellectual rigidity for human
welfare in states such as North Dakota illustrate the point, quite brutally.
What Konczal presses for is a very different notion of freedom. This doesn't deny the
benefits of markets, but it qualifies them. In Konczal's words, "markets are great at
distributing things based on people's willingness to pay. But there are some goods that should
be distributed by need." Accepting this point entails the necessity of keeping some important
areas of life outside the determining scope of markets. Furthermore, people's needs change over
time, as societies and markets change. Konczal's framework suggests the need for collective
choice to figure out the best responses to these changes, and a vibrant democratic politics, in
which the state responds to the expressed needs of mobilized publics as the best way to carry
out these choices.
All this makes the book sound more like an exercise in political theory than it is. That's
because of my own professional deformities, and because I want you to read the book itself, if
you really to get the good stuff – the stories, the examples, and the overall narrative
that Konczal weaves together. Freedom from the Market has the potential to be a very
important book, focusing attention on the contested, messy but crucially important intersection
between social movements and the state. It provides a set of ideas that people on both sides of
that divide can learn from, and a lively alternative foundation to the deracinated technocratic
notions of politics, in which good policy would somehow, magically, be politically self
supporting, that has prevailed up until quite recently. Strongly recommended.
I'll second this recommendation – it was a great read. I would especially recommend
reading it for the section on Medicare integration, since that's a story that rarely gets
told but is genuinely quite fascinating. It gives me greater respect for LBJ, given that he
was giving them full-support despite a difficult, treacherous political battle to integrate
hospitals in the South despite immense resistance.
He also made a very interesting point after the Homestead section when he got to the
section on work-hour labor movements, about how they needed to specifically make it so that
certain rights couldn't be contracted away, because otherwise even laws establishing
such-and-such rules would get end-runned by businesses requiring their employees to give them
up in contracts.
Henry, you write, "if there is a need to provide collective goods for people that cannot
be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on
adaptation." That seems like a big "if." Other than the classic examples of national defense
and perhaps police and courts, what goods cannot be provided through voluntarism?
There's a nice line in Slobodian's book about Americans not knowing much about the rest of
the world but imagining that the US is a scale-model of it. Isn't the worry about the general
claim here that it is more plausible to see property rights as merely the creature of the
state when you have a vast internal market with many needs catered for by domestic production
than it is when you have small states with relatively specialized domestic production that
need to trade across borders to satisfy their needs. In such a case, where the real economy
transcends borders and where trade barriers at those borders just make everyone poorer, you
need transnational guarantees (or at least a very strong degree of confidence) for property
rights and investment against the potential interference of local governments. So even if
Konczal is right for the US, the question of how to do social democracy transnationally
remains for the rest of us. The EU is one possible answer to that, but the continuation of
national political narratives, blaming other nations within the structure for their own
problems (Germany > Greece, Italy) etc remains a big obstacle to anti-market pushback at
that level.
reason 01.27.21 at 11:20 am (no link)
Just a short aside, this sentence struck me:
" Property rights aren't the foundation of liberty, as both nineteenth century jurists and
twentieth century economists would have it."
Property rights are inherently a restriction of liberty. They restrict the rights of
everybody but the designated owner. It may be that in some circumstances they are net a
positive, that this is clearly not something one can expect from the nature of the thing.
That this point isn't made more often and more strongly puzzles me.
Jake Gibson 01.27.21 at 1:22 pm (no link)
I think it can be illuminating to think of "property rights" in the context that at some
point all property was taken (stolen) from The Commons.
And that property laws are enshrinement of common law on possession (nine tenths).
The "twentieth century economists" like the "nineteenth century jurists" refer just to
those discussed in the book (basically Friedman, Chicago School, market for corporate control
people etc etc). So they're not claims about the general class of economists in the twentieth
century, where there is tons of disagreement on lots of stuff obviously, but a particular
strain of economic thought that Konczal writes about.
There is no "the" market. All markets are not the same.
The Hayekians first insistence is that in fact all markets are the same. They then have
designed the 'markets' they want, and if you design a market you win.
Mike Huben 01.27.21 at 4:11 pm (no link)
Kurt Schuler @ 3 asks: "what goods cannot be provided through voluntarism?"
The glib answer is "none" because you can always find an exceptional case of private
production.
But the problem is "provided" is underspecified: it could mean provision to only one
person, or (better) provision of ENOUGH. And even enough is underspecified.
Look at something like water. Public provision of vast volumes of clean, safe, cheap
drinking water is an alternative to voluntarism's answer: expensive bottled water which must
be used frugally by the poor, consumes much energy in transportation and waste in plastic:
which is enough? Which is proper provision? Should there be only one type of provision?
And of course that question implies another; what goods should not be provided through
voluntarism? Maybe pollution, addiction, crime, and a host of others.
"Voluntarism" is an example of framing, trying to focus the world through an ideological
lens. If you accidentally accept this narrow peephole on the world, your thinking is greatly
constrained because of the things is has misdirected you from. The same kind of framing as
"markets are freedom", which Konczal is apparently decrying. (I have not yet read the
book.)
Given the tenor of most responses, it doesn't seem likely Konczal's book is going to
change the narrative in any significant way.
Bob@2 seems a good example of the pro-market reasoning. For one thing, "economics" says
that if a person with a scarce talent can earn more money than is necessary to induce them to
exercise that talent, the income can be taxed away without affecting the market outcome.
Considering the real life examples of professional athletes, movie stars and artists, the
sage advice to tax the athletes, stars and artists, precisely because it won't endanger the
market outcomes of professional athletics, Hollywood and the art world presupposes the market
outcomes of pro sports, Hollywood and the museum/art gallery circuit are just and wise.
Bob@2 wrote "Economics is wisely silent on people's preferences and needs. The point
surely is not that there is something inherent in certain goods that means they should be
distributed by need–who decides what those "good" goods are that everyone (ought to?)
need?; the point is that income should be redistributed so that everyone can buy whatever
they see fit to buy based on their own understanding of their needs."
Yes, I recall reading a short article by von Hayek explaining there was no scientific way
to distinguish between wants and needs, thus there was no way ever, even in principle, to
deny there was such a thing as scarcity. Like von Hayek, the assumption that, given the
impossibility of pronouncing a difference between needs and wants (nor apparently even a way
of merely satisficing any such distinction,) the only valid way of deciding what must be
produced is by consumer sovereignty. The "votes" by rational consumers are the only possible
means of justice. Like distinguishing between productive and unproductive labor, anything
less than the market is tyranny.
I have no idea why Bob says Konczal's book as presented doesn't pose a problem, given two
market refutations of it are endorsed in the comment. It may be something like compatibilism,
the philosophical position that people have free will in the religious sense despite the
myriad of facts and millennia of experience showing that the religious notion of moral
responsibility is, to say the least, flawed. In words, compatibilists will say they accept
things like mental illness leave old notions of moral responsibility -- which is to say, old
notions about retribution and punishment -- then in practice, they will do things like try
adolescents as adult or arbitrarily limit the definition of mental illness or simply ignore
such fiddling objections to honor time-honored customs. Similarly, market proponents will
give lip service to the notion of market failure, then inexplicably (?) fail to see it.
Chris Bertram@5 writes " the continuation of national political narratives, blaming other
nations within the structure for their own problems (Germany > Greece, Italy) etc remains
a big obstacle " to social democracy. Is the illustrative example meant to condemn Germany
blaming Greece and Italy for creating their own problems and leeching (or trying to) off of
Germany? Or, is it Greece and Italy blaming of Germany for not curing their own failures for
them? Is it somehow both? Also, the definition of the EU as a consortium of states premised
on fiscal integrity may be more of an obstacle to social democracy than political narratives,
however construed?
Well, insulin clearly (see above). But also: schools that make everybody literate and
promote basic social solidarity. Colleges that are cheap enough to educate all of the
talents. Hospitals that treat illnesses irrespective of ability to pay. Universal
vaccinations. Flood defences. Disaster relief. Food inspectors. Drug safety testers.
Buildings inspectors. Fire inspectors. Transport safety inspectors. Highways. Mending
potholes in highways. Keeping bridges safe. Last-mile rural electrification. Universal mail
coverage at a single price. Legal advice to even access to justice by rich and poor.
Excellent daycare at prices poor people can afford. Basic research in particle physics and
astronomy. R & D in far-from-market areas society needs. Drug discovery for diseases poor
people get. Training of specialists in non-profitable yet essential professions. Landscape
conservation. Pollution control. Tech regulation. Setting a carbon price/tax. Railways that
move people fast enough and cheaply enough to take custom away from ecocidal airlines. Mass
transit in cities. Space programmes. A welfare safety net permitting risky careers in the
arts. A welfare safety net to equalise the chances of children. A welfare safety net allowing
every member of a society to go to sleep every night in a state of delicious moral luxury,
knowing that no-one is hungry. Lighthouses. Earthquake detection. Censuses. Diplomacy.
Peacemaking. Peacekeeping. Public broadcasters with editorial independence. Et cetera et
cetera et cetera, in every flavour from civilisational basic to utopian flight of fancy.
Collective action! Getting the job done everywhere on the planet where libertarians
aren't.
" In such a case, where the real economy transcends borders and where trade barriers at
those borders just make everyone poorer, you need transnational guarantees (or at least a
very strong degree of confidence) for property rights and investment against the potential
interference of local governments."
Much of the world did social democracy pretty well last century, without transnational
guarantees. Conversely, the creation of investor guarantees like ISDS has been a gift to
predatory corporations like Philip Morris.
Insulin (and Epi pens) become unaffordable in the U.S. because the government massively
screwed up the regulations. These are off-patent drugs, so in theory anybody can make them.
BUT, getting production facilities FDA-approved is a long, expensive process. So when there's
an effective monopoly on a drug, no other company will enter the market to compete -- even
after huge price hikes. Why not? Because after the new company had invested the time and
money to get its production line built and approved, the original monopolist would drop its
prices back down, and the new entrant would make no money. And everybody knows this, so
potential new entrants don't bother. An obvious solution is reciprocity to allow importation
of drugs already approved in the EU. But there's no way the FDA is going to allow that
to happen and lose its regulatory monopoly.
The bottom line is that these are not failures of unregulated markets, they are cases of
government failure in the most heavily regulated market in the U.S. (and where, in fact, the
strict regulation is the key enabler of the bad outcome and where the obvious fix is blocked
by the regulatory agency defending its turf).
MPAVictoria 01.29.21 at 1:39 am (no link)
"Insulin (and Epi pens) become unaffordable in the U.S. because the government massively
screwed up the regulations."
Just need to point out that this is completely false. Insulin prices are high in the US
because of a lack of price controls. Canada has very similar patent rules and our insulin is
made by the same companies but guess what? We set a maximum price for pharmaceuticals. The US
should do the same.
mw 01.29.21 at 1:23 pm (no link)
MPAVictoria @ 23 Just need to point out that this is completely false. Insulin prices
are high in the US because of a lack of price controls. Canada has very similar patent rules
and our insulin is made by the same companies but guess what? We set a maximum price for
pharmaceuticals. The US should do the same.
Yes, you could layer on additional price-control regulations to fix the problems caused by
the existing regulations. Of course it's one thing for Canada to adopt such rules where the
U.S. has not (and remains a source of profits and R&D incentives) and another when the
U.S. is also controlling prices. Incidentally, if price controls were to be adopted in the
U.S., my suggested approach is that the U.S. should require all pharma companies within, say,
two years to sell drugs here for the lowest price they have negotiated in any industrialized
country with a comparable per-Capita GDP. Then we can all be in it together.
But that's all a discussion for another thread -- the point remains that insulin and epi
pens are not examples of a free, unregulated market failing, they're an example of a very
heavily (but badly) regulated market failing. Yes bad U.S. regulations are responsible --
they create barriers to entry (specifically high costs of setting up a production facility
combined with an FDA regulatory monopoly and a ban on imports) that enable monopoly
pricing.
notGoodenough 01.29.21 at 8:01 am (no link)
mw @ 19, MPAVictoria @ 23
Not to side-track the thread, but I think there was an attempt to explore this on a
previous thread (particularly with respect to Daraprim, though I believe many of the points
are applicable in a general sense) [1]. While I´ll freely admit I am not an economist,
I didn´t find the responses to my queries and concerns from those advocating
"regulations are the issue" sufficiently satisfactory [2, 3] to warrant changing my position
– in short, I see little evidence to support the notion that it is US regulations
responsible for the high price of pharmaceuticals (particularly as it appears that R&D
spending is frequently less than that of marketing and administration). I hope the discussion
at the links provided is of interest.
Apologies to everyone for the interjection, but Pharma is a topic of keen interest and
concern to me.
mw @ 30: I forgot to respond to your by-the-by argument that the pharmas' US profits fund
their R&D. This is, as with the rest of your arguments, untrue.
(1) the US taxpayer funds most pharma research
(2) Last I checked, pharmas spend more on advertising and lobbying than they do on
R&D.
'nuff said.
MPAVictoria 01.30.21 at 1:29 am (no link)
@ NotGoodenough – Interesting links thank you! And I completely agree that I am
unconvinced that over regulation in it the reason the US has uniquely high drug prices.
@ me – Drug approval and manufacturing requirements in the US are not that different
from any other developed country. Neither is it's Drug IP regime. So the argument that these
features are what cause these outrageous pharmaceutical prices doesn't make much sense. In
fact the US had a bit of a reputation of being too ready to approve drugs with limited
effectiveness. The reason that Americans pay more than anyone else in the world is simple
– no price controls.
"The Federal Trade Commission said Tuesday that for more than two years, Amazon didn't pass
on tips to drivers, even though it promised shoppers and drivers it would do so.
The FTC said Amazon didn't stop taking the money until 2019, when the company found out
about the FTC's investigation . The drivers were part of Amazon's Flex business, which started
in 2015 and allows people to pick up and deliver Amazon packages with their own cars. The
drivers are independent workers, and are not Amazon employees.
The FTC said Amazon at first promised workers that they would be paid $18 to $25 per hour,
and also said they would receive 100% of tips left to them by customers on the app
.
But in 2016, the FTC said Amazon started paying drivers a lower hourly rate and used the
tips to make up the difference. Amazon didn't disclose the change to drivers, the FTC said, and
the tips it took from drivers amounted to $61.7 billion."
And a "team" at Amazon reprogrammed the app to steal tips. Managers, programmers,
testers, documentation specialists, accountants, database wizards, etc. Nobody said a word. All
corrupt to the bone. "Learn to code!"
Yves here. Sundaram discusses how the obsession with metrics, a long standing favorite topic
of ours (see Management's Great Addiction )
produces policies that give short shrift to the poor and poor countries. One of the big
fallacies is treating money as the measure of the value and quality of life. For instance,
reducing the instance of cancer is worth more in rich countries because their lives are valued
more highly in these models. Similarly, they often fall back on unitary measures like lifespan,
and so don't capture outcomes like diets heavy in low nutrient foods (think simple sugars)
producing higher rates of non-communicable diseases and hence less healthy citizens
By Jomo Kwame Sundaram, a former economics professor, who was United Nations Assistant
Secretary-General for Economic Development, and received the Wassily Leontief Prize for
Advancing the Frontiers of Economic Thought. Originally published at his website
Current development fads fetishize data, ostensibly for 'evidence-based policy-making': if
not measured, it will not matter. So, forget about getting financial resources for your work,
programmes and projects, no matter how beneficial, significant or desperately needed.
Measure for Measure
Agencies, funds, programmes and others lobby and fight for attention by showcasing their own
policy agendas, ostensible achievements and potential. Many believe that the more indicators
they get endorsed by the 'international community', the more financial support they can expect
to secure.
Collecting enough national data to properly monitor progress on the Sustainable Development
Goals
is expensive. Data collection costs, typically borne by the countries themselves, have been
estimated at minimally over three times total official development assistance (ODA).
Remember aid declined after the US-Soviet Cold War, and again following the 2008-9 global
financial crisis. More recently, much more ODA is
earmarked to 'support' private investments from donor countries.
With data demands growing, more pressure to measure has led to either over- or under-stating
both problems and progress, sometimes with no dishonest intent. 'Errors' can easily be
explained away as statistics from poor countries are notoriously unreliable.
Political, bureaucratic and funding considerations limit the willingness to admit that
reported data are suspect for fear this may reflect poorly on those responsible. And once
baseline statistics have been established, similar considerations compel subsequent
'consistency' or 'conformity' in reporting.
And when problems have to be acknowledged, 'double-speak' may be the result. Organisations
may then start reporting some statistics to the public, with other data used, typically
confidentially, for 'in-house' operational purposes.
Money, Money, Money
Economists generally prefer and even demand the use of money-metric measures. The rationale
often is that no other meaningful measure is available. Many believe that showing ostensible
costs and benefits is more likely to raise needed funding. Using either exchange rates or
purchasing power parity (PPP) has been much debated. Some advocate even more convenient
measures such as the prices of a standard McDonald's hamburger in different countries.
Money-metrics imply that estimated economic losses due to, say, smoking or non-communicable
diseases ( NCD s), including
obesity, tend to be far greater in richer countries, owing to the much higher incomes lost or
foregone as well as costs incurred.
Development Discourse Changes
The four UN Development Decades after 1960 sought to accelerate economic progress and
improve social wellbeing. Unsurprisingly, for decades, there have been various debates in the
development discourse on measuring progress.
The rise of neoliberal economic thinking, claiming to free markets, has instead mainly
strengthened and extended private property rights. Rejecting Keynesian and development
economics, both associated with state intervention, neoliberalism's influence peaked around the
turn of the century.
The so-called 'Washington Consensus ' of
US federal institutions from the 1980s also involved the Bretton Woods institutions, the
International Monetary Fund (IMF) and World Bank, both headquartered in the American
capital.
In 2000, the UN Secretariat drafted the Millennium Declaration. This, in turn, became the
basis for the Millennium Development Goals which gave primacy to halving the number of poor.
After all, who would object to reducing poverty. The poor were defined with reference to a
poverty line, somewhat arbitrarily defined by the Bank.
Poverty Fetish
Presuming money income to be a universal yardstick of wellbeing, this poverty
measure has been challenged on various grounds. Most in poorer developing countries sense
that much nuance and variation are lost in such measures, not only for poverty, but also for,
say,
hunger .
Anyone familiar with the varying significance, over time, of cash incomes and prices in most
countries will be uncomfortable with such singular measures. But they are nonetheless much
publicised and have implied continued progress until the Covid-19 pandemic.
Rejection of such singular poverty measures
has led to multi-dimensional poverty indicators, typically to meet 'basic needs'. While such
'dashboard' statistics offer more nuance, the continued desire for a single metric has led to
the development, promotion and popularisation of composite indicators.
Worse, this has been typically accompanied by problematic ranking exercises using such
composite indicators. Many have become obsessed with such ranking, instead of the underlying
socio-economic processes and actual progress.
Blind Neglect
Improving such metrics has thus become an end in itself, with little debate over such
one-dimensional means of measuring progress. The consequent 'tunnel vision' has meant ignoring
other measures and indicators of wellbeing.
In recent decades, instead of subsistence agriculture, cash crops have been promoted. Yet,
all too many children of cash-poor subsistence farmers are nutritionally better fed and
healthier than the offspring of monetarily better off cash crop or 'commercial' farmers.
Meanwhile, as cash incomes rise, those with diet-related NCDs have been growing. While life
expectancy has risen in much of the world, healthy life expectancy has progressed less as ill
health increasingly haunts the sunset years of longer lives.
Be Careful What You Wish For
Meanwhile, as poor countries get limited help in their efforts to adjust to global warming,
rich countries' focus on supporting mitigation efforts has included, inter alia, promoting
'no-till agriculture'. Thus attributing greenhouse gas emissions implies corresponding
mitigation efforts via greater herbicide
use .
Maximising carbon sequestration in unploughed farm topsoil requires more reliance on
typically toxic, if not carcinogenic pesticides, especially herbicides. But addressing global
warming should not be at the expense of sustainable agriculture.
Similarly, imposing global carbon taxation will raise the price of, and reduce access to
electricity for the 'energy-poor', who comprise a fifth of the world's population. Rich
countries subsidising affordable renewable energy for poor countries and people would resolve
this dilemma.
Following the 2008-2009 global financial crisis, the UN proposed a Global Green New Deal
(GGND) which included such cross-subsidisation by rich countries of sustainable development
progress elsewhere.
The 2009 London G20 summit succeeded in raising more than the trillion dollars targeted. But
the resources mainly went to strengthening the IMF, rather than for the GGND proposal. Thus,
the finance fetish blocked a chance to revive world economic growth, with sustainable
development gains for all.
The globalists found just the economics they were looking for.
The USP of neoclassical economics – It concentrates wealth.
Let's use it for globalisation.
Mariner Eccles, FED chair 1934 – 48, observed what the capital accumulation of
neoclassical economics did to the US economy in the 1920s. "a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion
of currently produced wealth. This served then as capital accumulations. But by taking
purchasing power out of the hands of mass consumers, the savers denied themselves the kind of
effective demand for their products which would justify reinvestment of the capital
accumulation in new plants. In consequence as in a poker game where the chips were
concentrated in fewer and fewer hands, the other fellows could stay in the game only by
borrowing. When the credit ran out, the game stopped"
This is what it's supposed to be like.
A few people have all the money and everyone else gets by on debt.
"... The bottom line is the true enemies of the American people are no foreign nation or adversary---the true enemy of the American people are the people who control America. ..."
"... This way of thinking points to a dilemma for the American ruling class. Contrary to a lot of the rhetoric you hear, much of the American ruling class, including the "deep state" is actually quite anti-China. To fully account for this would take longer than I have here. But the nutshell intuitive explanation is that the ruling class, particularly Wall Street, was happy for the past several decades to enrich both themselves and China by destroying the American working class with policies such as "free-trade" and outsourcing. But in many ways the milk from that teat is no more, and now you have an American ruling class much more concerned about protecting their loot from a serious geopolitical competitor (China) than squeezing out the last few drops of milk from the "free trade." ..."
This is awesome, he nails the dilemma which our owners are confronted with;
I'll put it this way: It is not as though the American ruling class is intelligent,
competent, and patriotic on most important matters and happens to have a glaring blind spot
when it comes to appreciating the threat of China. If this were the case, it would make
sense to emphasize the threat of China above all else.
But this is not the case. The American ruling class has failed on pretty much every
issue of significance for the past several decades. If China were to disappear, they would
simply be selling out the country to India, Saudi Arabia, Vietnam, or some other country
(in fact they are doing this just to a lesser extent).
Our ruling class has failed us on China because they have failed us on everything. For
this reason I believe that there will be no serious, sound policy on China that benefits
Americans until there is a legitimate ruling class in the United States. For this reason
pointing fingers at the wickedness and danger of China is less useful than emphasizing the
failure of the American ruling class. The bottom line is the true enemies of the
American people are no foreign nation or adversary---the true enemy of the American people
are the people who control America.
This way of thinking points to a dilemma for the American ruling class. Contrary to
a lot of the rhetoric you hear, much of the American ruling class, including the "deep
state" is actually quite anti-China. To fully account for this would take longer than I
have here. But the nutshell intuitive explanation is that the ruling class, particularly
Wall Street, was happy for the past several decades to enrich both themselves and China by
destroying the American working class with policies such as "free-trade" and outsourcing.
But in many ways the milk from that teat is no more, and now you have an American ruling
class much more concerned about protecting their loot from a serious geopolitical
competitor (China) than squeezing out the last few drops of milk from the "free
trade."
@102 karlof1 - "By deliberately setting policy to inflate asset prices, the Fed has
priced US labor out of a job, while as you report employers sought labor costs that allowed
them to remain competitive."
I never heard it said so succinctly and truly as this before. That is what happened isn't
it? The worker can't afford life anymore, in this country.
And if the worker can't afford the cost of living - who bears the cause of this, how
follows the remedy of this, and what then comes next?
I really appreciate your point of view, which is the only point of view, which is that the
designers of the economy, the governors of the economy, have placed the workers of the
economy in a position that is simply just not tenable.
No wonder they strive to divide in order to rule - because they have over-reached through
greed and killed the worker, who holds up the society.
How long can the worker flounder around blaming others before the spotlight must turn on
the employer?
You have to remember these people really do think they are better. They do think in class
terms even if they avoid that rhetoric in public. The problem is they thought they could
control China like they did Japan. That was dumb then and it looks even dumber now. You can
see similar dumbness in their lack of grip on any realisitic view of Russia. Provincials
really. Rich peasants.
Thank you, they certainly DO think in class terms ALWAYS. + Rich peasants is perfect
:))
Thankfully they are blinded by hubris at the same time. The USA destroyed the Allende
government in Chile in 1973. After the Nixon Kissinger visit to China in 1979 they assumed
they could just pull a color revolution stunt when they deemed it to be the right time.
Perhaps in their hubris they thought every Chinese worker would be infatuated with capitalism
and growth.
They tested that out in the People Power colour (yellow) revolt in the Filipines in 1986
following a rigged election by Marcos. In 1989 only 16 years after China had been buoyed up
with growth and development following the opening to USA capitalism, they tried out the same
trick in Tienanmen square in China but those students were up against the ruling party of the
entire nation - not the ruling class. BIG MISTAKE. The ruling party of China was solidly
backed by the peasant and working class that was finally enjoying some meager prosperity and
reward a mere 40 years after the Chinese Communist Party and their parents and grandparents
had liberated China from 100 years of occupation, plunder, human and cultural rapine and
colonial insult. Then in 2020 it was tried on again in Hong Kong. FAIL.
The hubris of the ruling class and its running dogs is pathetic.
We see the same with Pelosi and the ruling class in the Dimoratss today. They push Biden
Harris to the fore, piss on the left and refuse to even hold a vote on Medicare for All in
the middle of a pandemic. Meanwhile the USAi ruling class has its running dogs and hangers on
bleating that "its wrong tactic, its premature, its whatever craven excuse to avoid exposing
the ruling class for what they are - thieves, bereft of compassion, absent any sense of
social justice, fakes lurking behind their class supposition.
They come here to the bar with their arrogant hubris, brimming with pointless information
some even with emoji glitter stuck on their noses. Not a marxist or even a leftie among them.
Still its class that matters and its the ruling class that we must break.
@102 karlof1 and Grieved | Dec 19 2020 3:12 utc | 129
I did not understand inflate-assets/suppress-workers and forgot to return to it to clear
it up. Grieved sent me back to Karlof1. I just got it.
That viewpoint indeed explains method of operation to accomplish the results I observed.
When Nixon was forced to default on Bretton Woods use of Gold Exchange Standard* [the USD is
as good as gold], then printing fiat solved the problem [threat to US inventory of
gold]....but printing fiat [no longer redeemable as a promise convert to gold] became the new
problem [no way to extinguish the promises to redeem/pay].
So how to proceed? Aha! Steal from the workers; squeeze 'em, entertain and dazzle 'em!..
Such an elegant solution...slow, certain and hardly noticeable...like slow-boiling frogs...an
on-going project as we blog.
Back in 2013 a group of Apple employees decided
to sue the global behemoth. Every day, after they were clocking out, they were required to
go through a corporate screening where their personal belongings were examined. It was a
process required and administered by Apple. But Apple did not want to pay its employees for the
time it had required them to spend. It could be anywhere from 40 to 80 hours a year that an
employee spent going through that process. What made Apple so confident in brazenly
nickel-and-diming its geniuses?
Jeff Rubin, author of The
Expendables: How the Middle Class got Screwed by Globalization , has an answer to the
above question that is easily deduced from the subtitle of his book. The socio-economic
arrangements produced by globalization have made labor the most flexible and plentiful resource
in the economic process. The pressure on the middle class, and all that falls below it, has
been so persistent and powerful, that now " only 37
percent of Americans believe their children will be better off financially than they
themselves are. Only 24 percent in Canada or Australia feel the same. And in France, that
figure dips to only 9 percent." And "[i]n the mid-1980s it would have taken a typical
middle-income family with two children less than seven years of income to save up to buy a
home; it now takes more than ten years. At the same time, housing expenditures that accounted
for a quarter of most middle-class household incomes in the 1990s now account
for a third ."
The story of globalization is engraved in the " shuttered
factories across North America, the boarded-up main streets, the empty union halls." Rubin
does admit that there are benefits accrued from globalization, billions have been lifted up out
of poverty in what was previously known as the third world, wealth has been created, certain
efficiencies have been achieved. The question for someone in the western world is how much more
of a price he's willing to pay to keep the whole thing going on, especially as we have entered
a phase of diminishing returns for almost all involved.
As Joel Kotkin has written, "[e]ven in Asia, there are signs of social collapse. According
to a recent survey by the
Korea Institute for Health and Social Affairs, half of all Korean households have experienced
some form of family crisis, many involving debt, job loss, or issues relating to child or elder
care." And "[i]n "classless" China, a massive class of migrant workers -- over 280 million --
inhabit a netherworld of substandard housing, unsteady work, and miserable environmental
conditions, all after leaving their offspring behind in villages. These new serfs vastly
outnumber the Westernized, highly educated Chinese whom most
Westerners encounter. " "Rather than replicating the middle-class growth of
post–World War II America and Europe, notes researcher Nan Chen, 'China appears to have
skipped that stage altogether and headed straight for a model of extraordinary productivity but
disproportionately
distributed wealth like the contemporary United States.'"
Although Rubin concedes to the globalist side higher GDP growth, even that does not seem to
be so true for the western world in the last couple decades. Per Nicholas Eberstadt, in "Our
Miserable 21st Century," "[b]etween late 2000 and late 2007, per capita GDP growth averaged
less
than 1.5 percent per annum." "With postwar, pre-21st-century rates for the years
2000–2016, per capita GDP in America would be more than 20
percent higher than it is today."
Stagnation seems to be a more apt characterization of the situation we are in. Fredrik
Erixon in his superb The Innovation
Illusion , argues that "[p]roductivity growth is going south, and has been doing so
for several decades." "Between 1995 and 2009, Europe's labor productivity grew by just 1
percent annually." Noting that "[t]he four factors that have made Western capitalism dull and
hidebound are gray capital, corporate managerialism, globalization, and complex
regulation."
https://imasdk.googleapis.com/js/core/bridge3.426.0_en.html#goog_1789765618 Ad ends in
15s
Contrary to popular belief, globalization has functioned as a substitute for innovation and
growth. With globalization on the march, the western ruling class could continue to indulge in
its most preferred activities, regulation and taxation, in an environment where both of these
political addictions appeared sustainable. Non-western elites could perpetuate their
authoritarian regimes, garnering growth and legitimacy, from the access to the western markets.
Their copy-and-paste method of "innovation" from western firms would fit well with an
indigenous business class composed of mostly insiders and ex-regime apparatchiks.
There are plenty of criticisms that can be laid at the feet of globalization. The issue with
Rubin's book is that is does not advance very much beyond some timeworn condemnations of it.
One gets the sense that the value of this book is merely in its audacity to question the
conventional wisdom on the issue at hand. Rubin, who is somewhat sympathetic to Donald Trump,
seems to be much closer to someone like Bernie Sanders, especially an earlier version of
Sanders that dared to talk about the debilitating effects of immigration on the working
class.
Like Sanders, Rubin starts to get blurry as he goes from the condemnation phase to the
programmatic offers available. What exactly would be his tariffs policy, how far he would go?
What would be the tradeoffs of this policy? Where we could demarcate a reasonable fair
environment for the worker and industry and where we would start to create another type of a
stagnation trap for the whole economy? All these would be important questions for Rubin to
grapple with and would give to his criticisms more gravitas.
It would have also been of value if he had dealt more deeply with the policies of the Trump
administration. On the one hand, the Trump administration cracked down on illegal and legal
immigration. It also started to use tariffs and other trade measures as a way to boost industry
and employment. On the other hand, it reduced personal and corporate taxes and it deregulated
to the utmost degree possible. It was a kind of 'walled' laisser-faire that seemed to work
until Covid-19 hit. Real household income in the U.S.
increased $4,379 in 2019 over 2018. It was "more income growth in one year than in the 8
years of Obama-Biden." And during Trump's time, the lowest paid workers started not to just be
making gains, but making gains faster than the wealthy. "Low-wage workers are getting bigger
raises than bosses" ran a CBS News
headline .
Rubin seems to view tax cuts and deregulation as another giveaway to large corporations. But
these large corporations are just fine with high taxation, since they have a choice as to when
and where they get taxed. Regulation is also more of a tool than a burden for them. It's a very
expedient means for eliminating competitors and competition, a useful barrier to entry for any
upstart innovator that would upend the industry they are in. Besides, if high taxation and
regulation were a kind of antidote to globalization, then France would be in a much better
shape than it appears to be. But France seems to be doing worse than anybody else. In the
aforementioned poll about if their "children will be better off financially than they
themselves are" France was at the bottom in the group of countries that Rubin cited. The recent
events with the yellow-vests movement indicate a very deep dissatisfaction and pessimism of its
middle and working class.
Moreover, there does not seem to be much hostility or even much contention between
government bureaucracies and the upper echelons of the corporate world. Something that Rubin's
politics and economics would necessitate. And cultural and political like-mindedness between
government bureaucracies and the managerial class of large corporations is not just limited to
the mutual embrace of woke politics. It seems that there is a cross pollination of a much
broader set of ideas and habits between bureaucrats and the managerial class. For instance,
Erixon notes that "[c]orporate
managers shy away from uncertainty but turn companies into bureaucratic entities free from
entrepreneurial habits. They strive to make capitalism predictable." Striving for
predictability is a very bureaucratic state of mind.
In Rubin's book, missed trends like that make his perspective to feel a bit dated. There is
still valuable information in The Expendables . Rubin does know a lot about
international trade deals. For instance, a point that is often ignored in the press about
international trade agreements is that "[i]f you're designated a "developing" country, you get
to protect your own industries with tariffs that are a multiple of those that developed
economies are allowed to use to protect their workers." A rule that China exploits to the
utmost.
Meanwhile, Apple, after its apparent lawsuit loss on the case with its employees in
California, now seems committed to another fight with the expendables of another locale. The
Washington Post reported that "Apple
lobbyists are trying to weaken a bill aimed at preventing forced labor in China, according to
two congressional staffers familiar with the matter, highlighting the clash between its
business imperatives and its official stance on human rights." "The bill aims to end the use of
forced Uighur labor in the Xinjiang region of China ." The war against the expendables never
ends.
Napoleon Linarthatos is a writer based in New York.
Consider the structure of the term "common sense", which is just shared opinion. If there
is no common sense, there will be no common action.
The problem with coming together is that the ruling class divides and rules us as a normal
procedure of creating a class system. Nobody in the ruling class has a problem with this.
Their purpose in life is to reproduce the system of mass slavery and adapt it to present
conditions and they, being among the elect, are fine with this.
Cognitive dissonance is a daily occurrence for anyone paying attention. And our struggling
"leaders" are largely struggling over territory while ignoring the state of the nation.
True national emergencies are ignored as they are inconvenient, or more honestly buried
under the rug, because they might mean our sociopaths at the top of the food chain would have
to pony up some of their Ill gotten gains to the social good AND lose some of their leverage
over modern serfs. And unlike "war" and "military intervention" which have been monetized to
the nth degree, pandemic response has been bungled not only because the social systems have
been shredded but because factions are fighting over response in order to find a way to strip
as much public money from it as possible.
We make black jokes here about brunch, but the election of Biden is NOT about him, it is a
probably a vain attempt to put the genie back in the bottle. The sad thing is that instead of
pretending to be the adults in the room, the usual suspects kept up their four year long
tantrum, instead of letting the process play out and talking about how our system works, it
was all "he isn't giving up, he is being mean." All because it slightly delayed them
reestablishing their rice bowls. And so ends the "bring us together" meme with nary a
whimper.
I wish there was a chance our national leaders would get their heads out of the pockets of
their donors long enough to notice that the foundation THEY depend on for their corrupt
lifestyles had been destroyed. I wish our foundations had not been so corrupted that even one
part remains strong.
I am not entirely pessimistic. The kids are largely alright. I just hope we can hold it
together long enough to give them a chance.
Two slightly different things here, perhaps.
I think it's generally accepted that all societies need a common frame of reference against
which you can have discussions and arguments, make and critique policy and try to interpret
the world. This doesn't mean that everybody agrees, or still less that everybody is obliged
to, but rather that everybody agrees about what the issues are and about the ground over
which they may disagree. Back in the days of the Cold War, for example, there were furious
debates about politics, not to mention wars, atrocities and dictatorships, but pretty much
everybody agreed what the issues were, even if they were on different sides of them.
Historically, this was very much the norm: the religious wars of Europe, or the wars of the
French Revolution were between people with very different views, but who agreed on the
underlying context. What we have now, is what the philosopher Alasdair McIntyre called
"incommensurability": a jaw-breaking term which means, essentially, that people don't even
begin from the same assumptions, and so are condemned to talk past each other. This accounts
for a lot of the cognitive dissonance. In the case of Brexit, for example, much of the
bitterness and confusion arose from the fact that Leavers and Remainers were simply talking
about different things, and starting from different assumptions, but didn't realise it. The
same applies, obviously to the whole TDS story. As a result, Joe Public is now faced with the
need to choose between competing and mutually exclusive interpretations of events, or even
whether events have actually occurred. It's hardly surprising there's so much confusion and
stress.
It's made worse by the kind of thing Thuto mentions. One of the least helpful ideas to
emerge from the 1960s was that children should be "left to find their own way", rather than
being taught things. But children mature by testing their ideas against the norms and
structures of society, and indeed their parents, and coming to some sort of personal vision
of the world. A lot of modern politics (and practically all of IdiotPol) is the result of
middle-class educated people who were never contradicted as children, and are still looking
to shock and provoke twenty or thirty years later. Once you understand that much of the
political and media system is made of people who are basically adolescents ("why does it have
to make sense? Tell me why it has to make sense!) the chaos and stress become easier to
understand.
This is what we should expect.
Western liberalism's descent into chaos.
1920s/2000s – neoclassical economics, high inequality, high banker pay, low regulation,
low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase
1929/2008 – Wall Street crash
1930s/2010s – Global recession, currency wars, trade wars, austerity, rising
nationalism and extremism
1940s – World war.
Right wing populist leaders are what we should expect at this stage in the descent into
chaos.
Why is Western liberalism always such a disaster?
They did try and learn from past mistakes to create a new liberalism (neoliberalism), but the
Mont Pelerin Society went round in a circle and got back to pretty much where they
started.
It equates making money with creating wealth and people try and make money in the easiest
way possible, which doesn't actually create any wealth.
In 1984, for the first time in American history, "unearned" income exceeded "earned"
income.
The American have lost sight of what real wealth creation is, and are just focussed on making
money.
You might as well do that in the easiest way possible.
It looks like a parasitic rentier capitalism because that is what it is.
Bankers make the most money when they are driving your economy into a financial
crisis.
What they are doing is really an illusion; they are just pulling future spending power into
today.
The 1920s roared at the expense of an impoverished 1930s.
Japan roared on the money creation of real estate lending in the 1980s, they spent the next
30 years repaying the debt they had built up in the 1980s and the economy flat-lined. https://www.youtube.com/watch?v=8YTyJzmiHGk
Bankers use bank credit to pump up asset prices, which doesn't actually create any
wealth.
The money creation of bank credit flows into the economy making it boom, but you are heading
towards a financial crisis and claims on future prosperity are building up in the financial
system.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
Early success comes at the expense of an impoverished future.
Things haven't been the same since 2008.
Early success came at the expense of an impoverished future.
https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6
At 18 mins.
The money creation of bank credit flowed into the economy before 2008 making it boom, but
they were heading towards a financial crisis and claims on future prosperity were building up
in the financial system.
It's repayment time.
Let's get the basics sorted.
When no one knows what real wealth creation is, you are in trouble.
We want economic success
Step one – Identify where wealth creation occurs in the economy.
Houston, we have a problem.
Economists do identify where real wealth creation in the economy occurs, but this is a
most inconvenient truth as it reveals many at the top don't actually create any wealth.
This is the problem.
Much of their money comes from wealth extraction rather than wealth creation, and they need
to get everyone thoroughly confused so we don't realise what they are really up to.
The Classical Economists had a quick look around and noticed the aristocracy were
maintained in luxury and leisure by the hard work of everyone else.
They haven't done anything economically productive for centuries, they couldn't miss it.
The Classical economist, Adam Smith: "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."
There was no benefits system in those days, and if those at the bottom didn't work they
died.
They had to earn money to live.
Ricardo was an expert on the small state, unregulated capitalism he observed in the world
around him. He was part of the new capitalist class, and the old landowning class were a huge
problem with their rents that had to be paid both directly and through wages. "The interest of the landlords is always opposed to the interest of every other class in
the community" Ricardo 1815 / Classical Economist.
They soon identified the constructive "earned" income and the parasitic "unearned"
income.
This disappeared in neoclassical economics.
GDP was invented after they used neoclassical economics last time.
In the 1920s, the economy roared, the stock market soared and nearly everyone had been making
lots of money.
In the 1930s, they were wondering what the hell had just happened as everything had appeared
to be going so well in the 1920s and then it all just fell apart.
They needed a better measure to see what was really going on in the economy and came up with
GDP.
In the 1930s, they pondered over where all that wealth had gone to in 1929 and realised
inflating asset prices doesn't create real wealth, they came up with the GDP measure to track
real wealth creation in the economy.
The transfer of existing assets, like stocks and real estate, doesn't create real wealth and
therefore does not add to GDP. The real wealth creation in the economy is measured by
GDP.
Real wealth creation involves real work producing new goods and services in the economy.
So all that transferring existing financial assets around doesn't create wealth?
No it doesn't, and now you are ready to start thinking about what is really going on
there.
"Much of their money comes from wealth extraction rather than wealth creation, and they
need to get everyone thoroughly confused so we don't realise what they are really up to."
And this is why the quintessential business model in the U.S (at least since the 1970s)
has been the multi-level marketing scheme.
There are two different things here. Trump betrayal of his voters is one thing, but election
fraud is another and is unacceptable no matter what is your opinion about Trump. We should not
mix those two topics.
All our political forms are exhausted and practically nonexistent. Our parliamentary
system and electoral system and our political parties are just as futile as dictatorships are
intolerable. Nothing is left. And this nothing is increasingly aggressive, totalitarian and
omnipresent.
Jacques Ellul, Anarchy and Christianity (1991)
Look at them! Look at them, will you? Behold our politicians' horrible languid maws!; the
courtier-like faces of department managers. They are indeed salesmen, for the very power of
nations is measure in relation to their own mercantile activity.
Jean Cau, Le meutre d'un enfant (1965)
"What's going to happen now?" I was asked earlier today. "Nothing and everything," I
replied. Immigration, largely unchallenged and unscathed (excepting the incidental impact of
COVID-19 on population movement) from four years of Trumpism, will now continue to
accelerate unabated . Zionism will continue to enjoy the expansion of American
institutional and military support, this time with the blood interest of Jared Kushner replaced
with the Jewish
spouses of all three of Biden's children. And the momentary Obama-era delusion of a
post-racial America will continue to dissolve in the reality of the increasing
awareness and importance of race throughout the West, not solely as a result of mass
migration but also of the increasing ubiquity of the ideologies of racial grievance and
revenge. There will, of course, be a dramatic change for the worse in tone and spirit, and some
smaller legislative victories like the
banning of federal anti-racism training will likely soon be reversed. The defeat of Donald
Trump is also hugely demoralizing to many decent American people, and emboldening to their
bitterest enemies. This is to be sorely regretted. But it is in the shared qualities of Trump
and Biden, rather than the election and sham ballots, that the real nature of our political
systems and their future can be perceived. And it is in these shared qualities that our true
problems lie.
Parliamentary electoral democracy is merely a representation of the general system in which
it operates. Slavoj Zizek comments:
At the empirical level, of course, multi-party liberal democracy "represents" -- mirrors,
registers, measures -- the quantitative dispersal of different opinions of the people, what
they think about the proposed programs of the parties and about their candidates, etc.
However, prior to this empirical level and in a much more radical sense, the very form of
multi-party liberal democracy "represents" -- instantiates -- a certain vision of society,
politics, and the role of the individuals in it: politics is organized in parties that
compete through elections to exert control over the state legislative and executive
apparatus, etc. One should always be aware that this frame is never neutral, insofar as it
privileges certain values and practices.
The truth of the system, in terms of its non-negotiable aspects, is thus revealed in the
"values and practices" privileged and ring-fenced under both Trump and Biden. What are these
non-negotiables? Zionism, GloboHomo ideological capitalism and its "woke" leftist correlates,
and the neoliberal promotion of GDP as the benchmark of human success and happiness.
Zionism
Jews have little to fear from a Biden presidency, which is presumably why Haaretz
is
claiming that the "American Jewish vote clinched Biden's victory and Trump's ouster.
American Jews decided the outcome of the U.S. elections." Donald Trump might have been
hailed as the "most pro-Israel President in U.S. history," but Jews are notoriously
unreliable in their partnerships with non-Jewish elites. Fate, it must be said, has not been
kind to those gentile elites that have exhausted their usefulness to Jews. And Trump is
surely exhausted, having spent a busy four years fighting for Jews in Israel and in the United
States. He reversed long-standing US policies on several critical security, diplomatic and
political issues to Israel's favour, including the Iran nuclear accord, the treatment of Israel
at the UN, and the status of Jerusalem and the Golan Heights. In December 2019, he announced
his Executive
Order on Combatting Anti-Semitism , promising to fight "the rise of anti-Semitism and
anti-Semitic incidents in the United States and around the world." One wonders what else he
could possibly have done for these people -- apart from a war with Iran -- a question that
appears to have been answered by Jews with a resounding "Nothing." One can only imagine Trump's
facial expression on seeing Benjamin Netanyahu's
emphatic congratulations to Joe Biden, punctuated with the loving refrain: "I have a
personal, long and warm connection with Joe Biden for nearly 40 years, and I know him to be a
great friend of the State of Israel."
Biden and Harris, replete with their immediate familial ties to Jews, are viewed in Zionist
circles as being at least as reliable as Trump, although not as exuberant and bullish. Biden
has been known as a staunch supporter of Israel throughout his 36 years in the Senate, often
cites his 1973 encounter with then-Prime Minister Golda Meir as "one of the most consequential
meetings" of his life, and has on more than one occasion regaled audiences with a tale about
his father telling him that "You don't need to be a Jew to be a Zionist." While some
modifications are likely in the American approach to Iran, few reversals are expected on
Trump's four years of pro-Israel activism. Biden, for example, has weakly criticized moving the
embassy to Jerusalem but said he would not pull it back to Tel Aviv. Michael Herzog at
Haaretz
describes both Biden and Harris as "traditional Democrats, with a fundamental commitment to
Israel whose roots are in part emotional in nature (in contrast to Obama)."
The change in relationship between America and Israel will be, in meaningful terms,
restricted to the personal. Netanyahu, for all his fawning, is likely to undergo a personal
demotion of sorts, with David Halbfinger of the New York Timespointing out
that we can expect a Biden presidency to diminish Netanyahu's "stature on the global stage and
undercut his argument to restive Israeli voters that he remains their indispensable leader."
Palestinian leaders, probably the best-positioned to offer a perspective on the potential for
an improvement in their condition under the new presidency, have been sombre to say the least.
Hanan Ashrawi, a senior PLO official, responded
to the question if she expected United States policy to continue tilting heavily in Israel's
favor: "I don't think we're so naïve as to see Biden as our savior." Contrast this with
the cheerfulness and confidence of Israel settlers who have grown accustomed to the perennial
nature of American support for Zionism. David Elhayani, head of the Yesha Council, an umbrella
for Jewish settlements in the West Bank,
said the party of the U.S. president ultimately doesn't matter so long as the baseline
commitment to support Israel persists: "Under Obama, we built more [settlement] houses than we
have under Trump I think Biden is a friend of Israel."
The fact that the grassroots of the Democratic Party are
drifting away from Zionism is no more consequential than the fact the grassroots of the
Republican Party wanted major action on immigration reform. The former, like the latter, have
been equally ignored by the real power brokers and influencers. Regardless of the radical
appearance of Democrat-affiliated movements like Black Lives Matter, the fact remains that all
of the leftist aggression and rhetoric of the summer of 2020 has resulted in the putative
election of an establishment Zionist and political pragmatist who is sure to execute a more or
less formulaic neoliberal scheme for government. In one sense, the bland, forgetful, and
familiar Biden, who lacks any hint of genuine or novel ideology and was elected purely as a
symbol of "not Trump," is the fitting response to Trump, who was equally devoid of ideological
sincerity or complexity beyond the symbolism of "not Establishment." And so, while the media
proclaims, as Heraclitus, that "all is in flux," from a different perspective we could argue,
like Parmenides, the opposite -- "there is no motion at all."
GloboHomo
If I retain one abiding, surreal, memory of the Trump presidency in the years ahead it will
be the Don dancing to the Village People in the wake of his numerous drives to legalize
homosexuality in various African backwaters. That the Red State Christians comprising so much
of his base could maintain their self-adopted blind spot on this issue is a remarkable
testament to the power of personality, because no world leader in history has done more in
recent history than Donald Trump to export what E. Michael Jones has so aptly termed "the Gay
Disco" -- the double-barrelled shotgun of unbridled finance capitalism and the superficial
freedom of sexual "liberty." As the pastors and preachers of South Carolina and Texas urged
their huddled congregations to pray for the President, Trump was busy dispatching new
missionaries, like U.S. Ambassador to Germany Richard Grenell, to the corners of the earth in
search of converts to the Church of GloboHomo.
In February 2019, the U.S. embassy indulged in some nostalgia for Weimar when it
flew LGBT activists from across Europe to Berlin for a strategy dinner to plan to push for
decriminalization in places that still outlaw homosexuality -- mostly concentrated in the
Middle East, Africa and the Caribbean. For my part, I can think of many social problems in
these parts of the world, but it really takes a special kind of mind to arrive at the opinion
that one of the most pressing is that they need to become more gay. Grenell, however,
horrified that Iran has the audacity to execute its own convicted homosexual pederasts, was
not to be deterred, and was instrumental in the blackmail of lesser nations, promising they
would be denied
access to terrorism intelligence if they don't legalise homosexuality. All of which has
left the far corners of the American cultural-military empire questioning whether they could
better live with suicide bombers or sodomy.
Against such manoeuvres, Biden's apparent claim to be one half of the "most pro-equality
ticket in history" seems a little overstated. That being said, there's no question that Biden
is going to step up the domestic nature of GloboHomo significantly as soon as he assumes
office. Biden has pledged to sign the Equality Act, thus far opposed by the Trump
administration, within his first 100 days in office, a piece of legislation that will amend
"the Civil Rights Act to prohibit discrimination on the basis of sexual orientation and gender
identity in employment, housing, public accommodations, public education, federal funding,
credit, and the jury system." Biden has pledged to appoint significant numbers of homosexuals
and transsexuals to positions of influence, and has promised to allow transsexuals to join the
military. Experienced in advancing global LGBT+ dogma as part of the Obama-Biden
administration, Biden will also once again take up the global mantle,
expressing his "hopes to reverse Trump's efforts and expand queer rights internationally by
making equality a centrepiece of US diplomacy," and condemning
Poland's "LGBT-free zones." Stunning and brave indeed.
There is a certain sense in the cases of both Trump and Biden that, for all the flamboyance
of their efforts in this area, there is a performative aspect to this politics. I don't get the
impression that either has been especially personally committed to these ideas or actions, but
that, as pragmatic-symbolic politicians, they have been made aware that this is the direction
the broader System is moving in and they should comply and support it. The longevity and
gradual acceleration of these trends, beginning in earnest with the presidency of Bill Clinton,
would suggest a systemic movement underlying, and entirely untethered to, specific political
parties or figures. Throughout the West, and much as with Zionism, GloboHomo, or hedonistic
credit-based capitalism and its sexual correlates more generally, is to be accepted and
promoted as an essential part of the role of neoliberal government. In the context of declining
basic freedoms at home, for example the obvious decline in free speech and the creeping
criminalisation of meaningful dissent against the status quo, the international promotion of
homosexuality and transsexual identities offers a cost-free and PR-friendly method for
increasingly authoritarian neoliberal regimes to posture as crusaders for freedom. The trucker
in Ohio is, logical flaws notwithstanding, and whether he wants it or not, thus assured of his
place in the Land of the Free via his government's emancipation of the gays and transvestites
of Uganda. Engaged politically only at the most superficial level, the masses play along with
this ruse, often in blunt denial, possessing only fragmentary realisations of the fact their
countries are changing around them while the petty "rewards" of Americanism are meagre and
peculiar, if not insulting.
GDP!
Along with frequent reassurances that he was "giving serious consideration" to doing
something, Trump's presidency was marked by regular updates on the performance of American GDP.
Unfortunately the GDP, like the Jewish vote, appears to have stabbed him in the back, with
around 70% of
American GDP represented in counties that (putatively!) voted Democrat. Trump's tragicomic
belief in GDP performance as a form of politics in its own right is perhaps the quintessential
example of the mentality of homo economicus and the tendency of neoliberals to view
countries as mere zones, or economic areas, where everything is based on rationalism and
materialism, and national success is purely a calculation of economic self-interest. Writing
pessimistically of Trump's expected nomination
in 2015 , I issued a stark warning about the influence of Jared Kushner, but also
added:
For all his bluster, Trump is a creation and product of the bourgeois revolution and its
materialistic liberal ideologies. We are teased and tantalized by the fantasy that Trump is a
potential "man of the people." But I cannot escape the impression that he is a utilitarian
and primarily economic character, who seeks a social contract based on personal convenience
and material interest. In his business and political history I see only the "distilled Jewish
spirit."
I don't think I've seen anything over the last four years that has made me question or
revise that assessment. Trump's dedicated tweeting on GDP in fact had the opposite effect.
The disturbing reality, of course, is that GDP is only one side of a national economy.
Another crucial aspect is government borrowing, and current projections suggest that the United
States is " condemned to
eternal debt ." According to The Budget Office of the United States Congress (CBO), "the US
economy would enter the first half of this century with a public debt equivalent to 195 percent
of its GDP. In the next 30 years the debt of the most powerful economy on the planet would more
than double." The first significant jump occurred in the wake of the subprime crisis, in which
Jewish mortgage lenders were especially prominent. The subprime crisis forced public debt to 37
percent of GDP, which then rose steadily to 79 percent between 2008 and the outbreak of
COVID-19. It now stands at 98 percent, and is accelerating. Although the United States has
reached comparable levels of debt in the past, there has almost always been an accompanying
war, or wars, which acted as a financial pressure valve -- a fact that does not bode well for
isolationists but may be encouraging news for Zionist hawks.
Joe Biden has claimed recently that "a
Biden-Harris Administration will not be measured just by the stock market or GDP growth, but by
the extent to which growth is raising the pay, dignity, and economic security of our working
families" -- while at the same time welcoming millions of new immigrants and legalizing the
~20M+ illegals into the workforce .The American economy is in fact extremely unlikely to change
direction, with Biden
reassuring his billionaire donors gathered at the Carlyle Hotel in Manhattan in June 2019
that "no one's standard of living will change, nothing would fundamentally change." I believe
him. Biden was part of an administration that
looked on as 10 million working Americans lost their homes. Matt Stoller at the
Washington Post has described Obama-era Democrat economic policies as "in effect, a
wholesale attack on the American home (the main store of middle-class wealth) in favor of
concentrated financial power." Biden was part of a team that outright rejected prosecuting
major bankers for fraud and money laundering, and that represented one of the most
monopoly-friendly administrations in history:
2015 saw a record wave of mergers and acquisitions, and 2016 was another busy year. In
nearly every sector of the economy, from pharmaceuticals to telecom to Internet platforms to
airlines, power was concentrated. And this administration, like George W. Bush's before it,
did not prosecute a single significant monopoly under Section 2 of the Sherman Act. Instead
[under Obama] the Federal Trade Commission has gone after such villains as music teachers and
ice skating instructors for ostensible anti-competitive behavior. This is very much a
parallel of the financial crisis, as elites operate without legal constraints while the rest
of us toil under an excess of bureaucracy.
Biden is the product of funding from
forty-four billionaires , including six hedge fund speculators, seven real estate barons,
and five in the tech sector. Of the top 22 donors, at least 18 are Jews (Jim Simons, Len
Blavatnik, Stewart Resnick, Eli Broad, Neil Bluhm, David Bonderman, Herb Simon, Daniel Och, Liz
Lefkovsky, Steve Mandel, Bruce Karsh, Howard Marks, S. Daniel Abraham, Marc Lasry, Jonathan
Tisch, Daniel Lubetsky, Laurie Tisch, and Robert Toll). The Jewish consortium behind Biden is
almost identical in its financial composition to that behind Trump which, as I've explained
previously , was notable for its embodiment of "usury and vulture capitalism, bloated
consumerism, and the sordid commercial exploitation of vice." Biden's transition team ,
meanwhile, is comprised of "executives from Lyft, Airbnb, Amazon, Capital One, Booz Allen,
Uber, Visa, and JPMorgan." In short, expectations that Biden is going to break up Big Tech, or
any monopoly for that matter, are the fantasies of the deluded, the ignorant, and the
duped.
Conclusion
While the drama and recrimination surrounding the election are unquestionably fascinating, I
hope you'll forgive for being less agitated than most. My reasons for lethargy are simple: I
knew that regardless of outcome we'd get four more years -- four more years of Zionism,
GloboHomo, and the standardized, rationalized machinery of economic escalation that now
provides the apologetic engine for mass migration. Behind the abortion debates, Supreme Court
picks, culture wars, and media theater, these are the non-negotiables of the System. You don't
hear about them, and you can't talk about them, because you can't vote on them. And this is the
biggest electoral fraud of all.
I feel particular sorrow for ordinary decent Americans, in what today should be the land
of plenty for all, who are having to witness this horrible implosion of their country and
values. Other than divine intervention there is no hope. The media, money markets and
political classes are either directly run by the same children of a devil or by loathsome
gentiles who have taken the Judas coin or who are cowards in fear of their miserable
life's.
What is life if it means cowering down in the face of evil? An ancient voice trying to
tell this strange world that you are controlled by an evil power and that your eternal fate
is determined by how you respond to it i.e. join the freak show or stand up like a true man
or woman and tell them no.
The writer of this essay is a man of culture, with wide interests. There are not many
left. Compare him to the moronic voices of today with their narrow perverted interests and
weep for what faces you.
I feel particular sorrow for ordinary decent Americans, in what today should be the land
of plenty for all, who are having to witness this horrible implosion of their country and
values. Other than divine intervention there is no hope. The media, money markets and
political classes are either directly run by the same children of a devil or by loathsome
gentiles who have taken the Judas coin or who are cowards in fear of their miserable
life's.
Particular particular sorrow for the young. As for divine intervention, we used to have a
saying about God helping those who help themselves. Surely there must be some action we can
take.
While the drama and recrimination surrounding the election are unquestionably
fascinating, I hope you'll forgive for being less agitated than most. My reasons for
lethargy are simple: I knew that regardless of outcome we'd get four more years -- four
more years of Zionism, GloboHomo, and the standardized, rationalized machinery of economic
escalation that now provides the apologetic engine for mass migration. Behind the abortion
debates, Supreme Court picks, culture wars, and media theater, these are the
non-negotiables of the System. You don't hear about them, and you can't talk about them,
because you can't vote on them. And this is the biggest electoral fraud of all.
Exactly correct. As early as mid April 2017 I could see that Trump had no intention of
keeping his promises to middle Americans I wrote a comment to this blog saying as much.
Trump is a minion of the Deep State.
The Deep State doesn't care about the unimportant internecine squabbles of the two
parties as long as their important issues are advanced (wealth and power). As a matter of
fact it strengthens the false perception that there is a choice when voting.
Trump and the Deep State do not care what the American people want. They know that most
American people are inane fools and will believe anything. Most Americans would rather watch
America's Got Talent, Dancing With The Stars or The Masked Singer than be informed about
important issues.
The only discernible values espoused in this rambling crypfic article is dog-whistling to
bigots of yore.
There is no study of history, no analysis, no insight and no meaning beyond blathers about
jews and homos.
The tone is hatred and despair with the judgement that others are to blame and there is
nothing to work towards.
The Zizek quote offered a word-salad refrain that everybody comes to power under some
bias, to themselves, if nothing else. But Zizek's actual point has be de-contextualized. Here
is what Zizek was saying:
//Let's remember that [Hannah] Arendt said this in her polemic against Mao, who himself
believed that "power grows out of the barrel of a gun" – Arendt qualifies this like
an "entirely non-Marxist" conviction and claims that, for Marx, violent outbursts are like
"the labor pangs that precede, but of course do not cause, the event of organic birth."
Basically, I agree with her, but I would add that there never will be a fully peaceful
"democratic" transfer of power without the "birth pangs" of violence: there will always be
moments of tension when the rules of democratic dialogue and changes are suspended.
Today, however, the agent of this tension is the Right, which is why, paradoxically, the
task of the Left is now, as the US politician Alexandria Ocasio-Cortez has pointed out, to
save our "bourgeois" democracy when the liberal center is too weak and indecisive to do it.
Is this in contradiction with the fact that the Left today should move beyond parliamentary
democracy?
No: as Trump demonstrates, the contradiction is in this democratic form itself, so that
the only way to save what is worth saving in liberal democracy is to move beyond it –
and vice versa, when rightist violence is on the rise, the only way to move beyond liberal
democracy is to be more faithful to it than the liberal democrats themselves. This is what
the successful democratic return to power of the Morales's party in Bolivia, one of the few
bright spots in our devastated landscape, clearly signals.//
In other words we must be conservatives who are willing to progress!
And hey, crypto-fascists: Zizek is not on board with you just because RT runs him on their
version of Fox News.
The world is never going back to the old-timey dayz of white settlement of an eden
America. So move forward or croak of old age or both.
As to the idea that "decent Americans" are in any way demoralized by Trump's loss:
BULLSHIT!
If you are demoralized by Trump's loss, you have been ejected from decency. But Luckily
for you, it so happens USA is a happy-enough home for all stripes of perverts.
@Verymuchalive the
Occidental Observer writers in prison, you have zero reason to think Trump won't crack down
on free speech in 2020.
Another 4 years of Trumpstien means a very large % of the right will continue to sleep,
something Biden could not get us to do. Biden could never get the right to support vaccines
or martial law.
No Trump apologist besides Alex Jonestien gives an excuse why Trump is backing a unsafe,
hastily made vaccine for a disease with a 99% survival rate. No Trump cultist will provide a
credible one. (Wally will not be the first)
And what happened? She was raped and kicked in the butt by him. He always does that to
everybody. He did it to his dad, he did it to his brothers and sister, he did it to his
family ..and now he has raped America.
Trump's only ability is to find out what others fear or desire, then overpromise on
everything and deliver nothing or even the opposite after u have given him your support or
money. That's how he operates in business, and that's how he has conducted his fake
presidency.
I am surprised that so many seemingly intelligent people have been taken in by this
well-known conman.
Great article. What I find strange is a businessman from New York second only to Israel in
population of Jews could be so easily duped by them. Loyal only to themselves. In the words
of Harry Truman "Jesus couldn't do anything with them, what am I suppose to do with
them?".
I think it needs to be emphasised that the "homo" in globohomo stands for
"homogeneity" and not "homosexuality":
Globohomo
(adj) A word used to describe a globalized and homogenized culture pushed
for by large companies, politicians, and Neocon/Leftist pawns. This culture includes
metropolitan ideals such as diversity, homosexuality, sexual degeneracy, colorblindness in
regard to race, egalitarianism, money worship, and the erasure of different individual
cultures, among other things.
My reasons for lethargy are simple: I knew that regardless of outcome we'd get four more
years -- four more years of Zionism, GloboHomo, and the standardized, rationalized
machinery of economic escalation that now provides the apologetic engine for mass
migration. Behind the abortion debates, Supreme Court picks, culture wars, and media
theater, these are the non-negotiables of the System. You don't hear about them, and you
can't talk about them, because you can't vote on them.
This may be great for The US' Jewish plutocracy, but the United States is still in
economic competition with countries that don't give 2 cents for ZioGlob world (for example
China – which has just signed the RCEP – Regional Comprehensive Economic
Partnership, covering 15 Asian countries, after 8 years of negotiation and covering 2.2
billion people).
So the rest of the world looks on with interest, same as it did in 1923, when the German
Weimar Republic collapsed in an orgy of sleaze, corruption, debt and worthless money.
990. Jews are the scapegoats for all the deficiencies of low-IQ whites just as whites are
the scapegoats for all the deficiencies of low-IQ non-whites. Let me explain how that
works.
Why do we observe Jews at the forefront of many cutting-edge industries? (for example the
media/arts and financial industries are indeed rife with them). The low-IQ answer is, of
course, a simplistic conspiracy theory: Jews form an evil cabal that created all these
industries from scratch to "destroy culture" (or at least what low-IQ people think is
culture, i.e. some previous, obsolete state of culture, i.e. older, lower culture, i.e.
non-culture). And, to be sure, there is a lot of decadence in these industries. But, in an
advanced civilization, there is a lot of decadence everywhere anyway! It's an essential
prerequisite even! So it makes perfect sense that the most capable people in such a
civilization will also be the most decadent! The stereotype of the degenerate
cocaine-sniffing whoremonging or homosexual Hollywood or Wall Street operative belongs here.
Well, buddy, if YOU were subjected to the stresses and temptations of the Hollywood or Wall
Street lifestyles, maybe you'd be a "degenerate" too! But you lack the IQ for that, so of
course you'll reduce the whole enterprise to a simplistic resentful fairy tale that seems
laughable even to children: a bunch of old bearded Jews gathered round a large table planning
the destruction of civilization! Well I say enough with this childish nonsense! The Jews are
simply some of the smartest and most industrious people around, ergo it makes sense that
they'll be encountered at or near all the peaks of the dominant culture, being
overrepresented everywhere in it, including therefore in its failings and excesses! This is
what it means to be the best! It doesn't mean that you are faultless little angels who can do
no wrong, you brainless corn-fed nitwits! There's a moving passage somewhere in Nietzsche
where he relates that Europe owes the Jews for the highest sage (Spinoza), and the highest
saint (Jesus), and he'd never even heard of Freud or Einstein! In view of all the
immeasurable gifts the Jewish spirit has lavished on humanity, anti-semitism in the coming
world order will be a capital offense, if I have anything to say on the matter. The slightest
word against the Jews, and you're a marked man: I would have not only you, but your entire
extended family wiped out, just to be sure. You think you know what the Devil is, but he's
just the lackey taking my orders. Entire cities razed to the ground (including the entire
Middle East), simply because one person there said something bad about "the Jews", that's how
I would have the future! Enough with this stupid meme! To hell with all of you brainless
subhumans! You've wasted enough of our nervous energy on this stupid shit! And the same goes
to low-IQ non-whites who blame all their troubles on whites! And it's all true: Jews and
whites upped the stakes for everybody by bringing into the world a whole torrent of new
possibilities which your IQ is too low to handle! So whatcha gonna do about it? Are you all
bark, or are you prepared to bite? Come on, let's see what you can do! Any of you fucking
pricks bark, and we'll execute every motherfucking last one of you!
Blah, blah, blah. Cat circling the hot plate. Trump was galacticly stupid. He should have
told the Jews that I will give you Jerusalem and Golan heights in my second term. He would
have a second term.
The only point is here is this:
Jews see Iran as a mortal threat. Jews want Iran to be destroyed. For Biden the first point
on the agenda is destruction of Iran. Biden did promise Jews that he will destroy Iran.
That is why Biden did win.
Trump hesitated with his promise to destroy Iran that is why he lost.
So here is the conclusion question:
Was Biden serious when he promised to Jews destroy Iran, or he was only making fools from
them Jews.
That is the only outstanding question
From my understanding, the term "Globohomo" was originally meant as a shorthand for
"globalised homogenisation", wherein all national cultures would be eliminated in favour of a
universal culture, promotion of homosexuality is just one of the components of GloboHomo,
with things like rampant consumerism, substance use and liberalism being some of the other
things.
If you go to the newly built sections of Europeans cities, you will notice how they are
all the same (homogenous) with the same American fast food outlets and the same architectural
style.
The amount of cerebral activity wasted here is, well, wasted...It's a class-war people,
recognize it for such. The U.S. needs to fall down among the weeds, and fertilize what's
coming...The libertarian impulse must be squashed until it is unrecognizable!!
Equality, Fraternity, and Liberty in that order, my friends. All else is sickness in the
mind.
@vig #85
Sorry: PMC refers to the Professional, Managerial class.
It could be considered the Petit Bourgeoisie in the Marxist sense except these aren't
shopkeepers. They're the middle managers, doctors, lawyers, MBAs, tenured professors, finance
types and what not who are divorced from the actual hands-on labor.
They mostly work for large corporations and government/non-government institutions like state
governments (at the higher levels), think tanks and nonprofits.
@vig #85
And to clarify further: there is a professor at Stanford University named Victor Davis
Hanson. He is both a tenured professor in early Western history (Greek) and also a farmer -
4th or 5th generation in the San Joaquin valley in California.
What Hanson has talked about at length was that the urban elite - the people in the cities
and along the East and West Coasts of America - have been enjoying a different reality than
the rest of the country.
In particular, the opening up of the American economy to China, India and the rest of the
world has created new markets for companies like Boeing, Facebook, GE and the like - which
benefits these areas and demographics.
However, this same action has also exposed American farmers, manufacturers,
non-MBA/PhD/Master's/etc to low priced labor and mercantilist economic policies in these
other countries.
The example Hanson uses is his own farm. In the 1980s, the price for raisins was $1200/ton
and the market was largely in Europe.
With the advent of the EU, Greek farmers got subsidies from the EU such that they took over
the EU market for raisins. The price for raisins fell to $400/ton.
Hanson doesn't say that this could/should be prevented; what he says is that it is a travesty
that there were no voices in the US at least pushing back against these obviously
anti-competitive economic policies. The lack of such voices meant that the forces of
globalism could run rampant and destroy entire sectors of the American economy at amazing
speed. In particular, the US leadership = oligarchs plus PMC class chose to sell out the rest
of the country in order to enrich itself.
This is 100% obvious to anyone who looks at the details of what has happened in the last 30+
years: China went from 6% of the US GDP in 1984 to near parity (or beyond) in purchasing
power terms today.
People living in the western world are in the greatest fight for the future of pluralist and
republican forms of governance since the rise and fall of fascism 75 years ago. As then,
society had to be built up from a war. Today's war has been an economic war of the oligarchs
against the republic, and it increasingly appears that the coronavirus pandemic is being used,
on the political end, as a massive coup against pluralist society. We are being confronted with
this 'great reset', alluding to post-war construction. But for a whole generation people have
already been living under an ever-increasing austerity regimen. This is a regimen that can only
be explained as some toxic combination of the systemic inevitabilities of a consumer-driven
society on the foundation of planned obsolescence, and the never-ending greed and lust for
power which defines whole sections of the sociopathic oligarchy.
Recently we saw UK PM Boris Johnson stand in front of a 'Build Back Better' sign, speaking to the
need for a 'great reset'. 'Build Back Better' happens to be Joe Biden's campaign slogan,
which raises many other questions for another time. But, to what extent are the handlers who
manage 'Joe Biden', and those managing 'Boris Johnson' working the same script?
The more pertinent question is to ask: in whose interest is this 'great reset' being carried
out ?
Certainly it cannot be left to those who have built their careers upon the theory and
practice of austerity. Certainly it cannot be left to those who have built their careers as
puppets of a morally decaying oligarchy.
What Johnson calls the 'Great Reset', Biden calls the 'Biden Plan for a Clean Energy
Revolution & Environmental Justice'. Certainly the coming economy cannot be left to Boris
Johnson or Joe Biden.
How is it that now Boris Johnson speaks publicly of a 'great reset', whereas just months ago
when those outside the ruling media paradigm used this phrase, it was censured by corporate
Atlanticist media as being conspiratorial in nature? This is an excellent question posed by
Neil Clark.
And so we have by now all read numerous articles in the official press talking about how
economic life after coronavirus will never be the same as it was before. Atlanticist press has
even run numerous opinion articles talking about how this may cut against globalization –
a fair point, and one which many thinking people by and large agree with.
Yet they have set aside any substantive discussion about what exists in lieu of
globalization, and what the economy looks like in various parts of the world if it is not
globalized. We have consistently spoken of multipolarity, a term that in decades past was
utilized frequently in western vectors, in the sphere of geopolitics and international
relations. Now there is some strange ban on the term, and so we are now bereft of a language
with which to have an honest discussion about the post-globalization paradigm.
https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890
Technocracy or Pluralism? A Fight Against the Newspeak
Until now, we have only been given a steady diet of distancing, of lockdown provisions,
quarantining, track and trace, and we have forgotten entirely about the fact that all of this
was only supposed to be a two or three-week long exercise to flatten the curve. And now the
truth is emerging that what is being planned is a new proposal being disguised as a 'great
reset'.
One of the large problems in discussing the 'great reset' is that a false dichotomy has
arisen around it. Either one wants things to be how they were before and without changes to the
status quo, or they promote this 'great reset'. Unfortunately, Clark in his RT article falls
into this false dichotomy, and perhaps only for expedience sake in discussing some other point,
he does not challenge the inherent problems in 'how things were before'. In truth, we would be
surprised if Clark did not appreciate what we are going to propose.
What we propose is that we must oppose their ' new normal ' 'great reset', while also
understanding the inherent problems of what had been normalized up until Covid.
The way things were before was also a tremendous problem, and yet now it only seems better
in comparison to the police state-like provisions we've encountered throughout the course of
politicizing the spectre of this 'pandemic'.
Oddly this politicization is based in positive cases (and not hospitalizations) ostensibly
linked to the novel coronavirus. Strangely, we are told to 'listen to the consensus science'
even as these very institutions consist of politically arrived at appointments. Certainly
science is not about consensus, but about challenging assumptions, repeatability and a lively
debate between disagreeing scientists with relatively equal qualifications. As Kuhn explains in
The Structure of Scientific Revolutions , science is always evolving, and by definition
potentially overturns consensus paradigms. This is a debate we have not seen, and this fact by
itself represents an illiberal cancer growing on an already defective pluralist society –
ironically, all flying under the banner of liberalism.
Decisions that a society decides to take should be driven by reason, prudence, and justice.
What is or isn't scientific plays a role, but cannot be the deciding factor. Science clearly
says that we may eliminate cross-walk injuries by banning street-crossing or by banning
driving, but what policy makers must do is account for the need to have both cars and crossing
the street, in deciding how – if it's even possible – to reduce or eliminate such
injuries. Science is only one part of this equation.
But isn't economics also a science? Is sociology not a science? What about psychology and
psychiatry – as in the known effects of social isolation and, say, suicide prevention?
What about housing and urban planning? The great sociologist Emile Durkheim explains how these
are sciences – they adopt and apply the scientific method in their work. Universities
have been awarding doctoral degrees in these sciences for a century or more, do these expert
opinions not count when managing a public catastrophe?
It is, and always has been, a political and politicized position to listen to some
scientists, and not others.
And so what of our term 'reset'? Indeed, it is itself misleading, and we would propose it is
intentionally so if we understand Orwell's critique of the use of language – newspeak
– in technocratic oligarchies.
A 'reset' textually refers to going back to something once known, erasing defects or
contradictions which arose along the way, which carries with it the familiar, and something we
had previously all agreed to. A 'reset' by definition means going back to how things were
before – not just recently, but before at some point farther back. Its definition is
literally contrary to how Boris Johnson means it in his shocking public statement at the start
of October.
The term 'reset' was therefore arrived with extraordinary planning and thoughtfulness, with
the intent to persuade [manipulate] the public. It simultaneously straddles two unique
concepts, and bundles them together at once into a single term in a manner that reduces nuance
and complexity and therefore also reduces thinking. It does so while appealing to the implicit
notion of the term that it relates to a past consensus agreement.
If understood as we are told to understand it, we must hold two mutually contradictory
notions at the same time – we are incongruously told that this reset must effectively
restore society to how it was at some point before because things can never be how they were at
any time before. Only within the paradigm of this vicious newspeak could anything ever have the
public thinking that such a textual construction makes any bit of sense.
What are Our
Real Options? Whose Reset?
Those who understand that this 'reset' is not a reset but rather a whole new proposal on the
entire organization of society, but being done through oligarchical methods and without the
sort of mandate required in a society governed by laws and not men, are – as we have said
– reluctant to admit that a great change is indeed necessary.
Rather, we must understand that the underlying catastrophic economic mechanisms which are
forcing this great change exist independently of the coronavirus, and exist independently of
the particular changes which the oligarchs promoting their version of a 'reset' (read: new
proposals ) would like to see.
You see, the people and the oligarchs are locked into a single system together. In the
long-term, it seems as if the oligarchs are looking for solutions to change that fact, and
effect a final solution that grants them an entirely break-away civilization. But at this
moment, that is not the case. Yet this system cannot carry forward as it has been, and the
Coronavirus presents a reason at once both mysterious in its timing and also profound in its
implications, to push forward a new proposal.
We believe that technology is quickly arriving at a point where the vast majority of human
beings will be considered redundant. If the technocracy wants to create a walled civilization,
and leave the rest of humanity to manage their own lives along some agrarian, mediaeval mode of
production, there may indeed be benefits to those who live along agrarian lines. But based in
what we know about psychopathy, and the tendency of that among those who govern, such an
amicable solution is likely not in the cards.
That is why the anti-lockdown protests are so critically important to endorse. This is
precisely because the lockdown measures are used to ban mass public demonstrations, a critical
part of pushing public policy in the direction of the interests of the general public. A whole
part of the left has been compromised, and rolled out to fight imaginary fascists, by which
they mean anyone with conventional social views which predate May of 1968. All the while the
actual plutocrats unleash a new system of oligarchical control which, for most, has not been
hitherto contemplated except by relatively obscure political scientists, futurists, and science
fiction authors.
Certainly the consumerist economic system (sometimes called 'capitalism' by the left), which
is based in both globalized supply chains but also planned obsolescence, is no longer feasible.
In truth, this relied upon a third-world to be a source of both raw materials and cheaper
labor. The plus here is that this 'developing world' has largely now developed. But that means
they will be needing their own raw materials, and their own middle-classes have driven up their
own cost of labor. Globalization was based in some world before development, where the real
dynamic is best explained as imperialism , and so it makes sense that this system is a relic of
the past, and indeed ought to be.
It increasingly appears that the 'Coronavirus pandemic', was secondary to the foregone
economic crisis which we were told accompanied it. Rather, it seems that the former came into
being to explain-away the latter.
Another world is possible, but it is one which citizens fight for. In the U.S., England,
Scotland, Ireland, and Germany, there have already been rather large anti-lockdown
demonstrations. These, as we have explained, are not just against lockdown but are positively
pushing to assert the right to public and political association, to public and political
speech, and the redressing of grievances. This is a fundamental right for citizens in any
republic where there is any sort of check on the oligarchy.
We have written on the kind of world that is possible, in our piece from April 2020 titled:
"
Coronavirus Shutdown: The End of Globalization and Planned Obsolescence – Enter
Multipolarity ". That lays out what is possible, and what the problems of pre-corona system
were, in economic terms more than political. Here we discuss the problems of
globalization-based supply chain security in a multipolar world, and the larger problem of
planned obsolescence, especially in light of 3D printing, automation, and the internet of
things.
We posed the philosophical question as to whether it is justified to have a goods-production
system based upon both the guaranteed re-sale of the same type of goods due to planned
obsolescence and the 'work guarantees' that came with it. In short, do we live to work or to we
work to live? And with the 4th industrial revolution looming, we posed the question of what
will happen after human workers are no longer required.
Pluralist society is the compromise outcome of a ceasefire in the class war between the
oligarchy and the various other classes that compromise the people, at large. Largely idealized
and romantic ideas that form the basis of the liberal-democratic ideology (as well as classical
fascism) are used to explain how it is the oligarchy that is so very committed to that
arrangement of pluralism, and that this very arrangement is the product of their benevolence,
and not the truth: that it was the fight put up by common people to fight for a more just
future. No doubt there have been benevolent oligarchs who really believed in the liberal
ideology, of which fascism is one of its more radical products. But the view that the class
struggle can be acculturated or legislated into non-existence is similar to believing that the
law of gravity can be ruled unlawful in a court.
Perhaps we have forgotten what it takes, and perhaps things just have not gotten bad enough.
Decreases in testosterone levels in the population may be leading to a dangerous moment where
vigorous defiance to injustice is much less possible. Critical now is to avoid any artificial
means to opiate ourselves into thinking things are better than they are, whether by way of
anti-depressants or other self-medication. Only with a clear assessment of the real situation
on the ground can we forge the necessary strategy.
The great political crisis now is that a pandemic is being used to justify an end-run around
constitutional rights, an end-run around pluralist society, and so the vehicle – the
mechanism – that the general public might use to fight for their version of a 'reset' is
on the verge of disappearing.
In many ways this means that now is the final moment. We ask – whose great reset, ours
or theirs?
If it is about ' surplus populations ' – and I agree that is a strong
motivation for the elites – why are they super-charging import of the additional surplus
population from the Third World?
The corona panic is not helping, unless this is only Phase 1. Tanking the economy will most
likely result in a much weaker control of the population – the draconian new rules won't
make much difference because they can never be draconian enough. Tens of millions without work
is a prescription for chaos – it has always been.
One explanation that I find possible is ' inertia ' – the rulers are stuck, the
hired managerial class is both very stupid and very self-serving. What we see is helpless
inertia and a slow slide, but no plan or even coherent thought.
The members of the ruling class seem lost and helpless (' tear it down so we can rebuilt
it better ' is a weird refrain used by Macron, Trudeau and now Biden). The real story could
be that there is nobody behind the curtain, no ideas, and inertia rules.
@The
Alarmist hat we need to get the global population back below one billion, because every
action they have taken lately seems designed to lead to means to achieve that end.
To keep with the Saker, "the elites have gone mad", at government level, the public puppets
mostly do not know what they are doing. A level deeper, the few bet on chaos, improvise, but at
the least have some sort of quality goal: induce chaos to mask the causes of the necessary
culling of the surplus populations. At the level of the middle class, and populus, the former
are suicidal, the latter as always in the history of mankind, do not even grasp the situation
they are in.
@Beckow
much difference because they can never be draconian enough."
Corona panic leads to mandatory vaccinations.
Mandatory vaccinations leads to implantation of biochip.
Biochip sends and receives signals to/from 5G network.
Signals between biochips and AI through 5G network track everyone who has the chip, does not
allow troublemakers to buy/sell thereby starving them, and in extreme cases, signals from 5G
network to biochips kills/disables troublemakers.
The rules do not need to be draconian. In fact, no overt 'rules' are needed at all because
people will learn through pain what they are allowed to do.
"... "Another chasm opened between middle-class Westerners and their wealthy compatriots. Here, too, the middle class lost ground. It seemed that the wealthiest people in rich countries and almost everybody in Asia benefited from globalization, while only the middle class of the rich world lost out in relative terms. These facts supported the notion that the rise of "populist" political parties and leaders in the West stemmed from middle-class disenchantment. ..."
The world is becoming more equal but largely at the expense of middle-class Westerners,
according to a recent paper by Branko Milanovic , a Stone Center Senior Scholar
and a Centennial Professor at the London School of Economics. Milanovic's paper was published
in Foreign Affairs, the publication of the think tank, the Council on Foreign Relations (CFR),
and was titled: The World
Is Becoming More Equal, Even as Globalization Hurts Middle-Class Westerners . Broadly
speaking, globalization is the process of increased " worldwide
integration of the economic, cultural, political, religious, and social systems" of the
globe,
producing an increased flow of goods, capital, labour, and information, across national
borders. It was a process that gained steam particularly in the mid-1980s, with globalization
having the greatest transformative impact on life
since the Industrial Revolution .
Milanovic's paper starts by arguing that the world became more
equal between the end of the Cold War and 2007/08 financial crisis, a period of high
globalization. During this period however, globalization weakened the middle class in the West.
As Milanovic writes
:
"The results highlighted two important cleavages [or divisions]: one between middle-class
Asians and middle-class Westerners and one between middle-class Westerners and their richer
compatriots. In both comparisons, the Western middle class was on the losing end. Middle-class
Westerners saw less income growth than (comparatively poorer) Asians, providing further
evidence of one of the defining dynamics of globalization: in the last 40 years, many jobs in
Europe and North America were either outsourced to Asia or eliminated as a result of
competition with Chinese industries. This was the first tension of globalization: Asian growth
seems to take place on the backs of the Western middle class."
"Another chasm opened between middle-class Westerners and their wealthy compatriots.
Here, too, the middle class lost ground. It seemed that the wealthiest people in rich countries
and almost everybody in Asia benefited from globalization, while only the middle class of the
rich world lost out in relative terms. These facts supported the notion that the rise of
"populist" political parties and leaders in the West stemmed from middle-class
disenchantment. "
Milanovic goes on to note
that in an updated paper that looks at incomes in 130 countries from 2008 to 2013-14, the first
tension of globalization holds true: in that, the incomes of the non-Western middle class grew
more than the incomes of the middle class in the West. The impact of globalization on the
Western middle class is imperative to understand. Globalization is a process that has produced
winners and losers , and
the Western middle class has been the greatest loser.
In my opinion, any system that weakens the middle class in any country should be seen as
counterproductive. Having a strong middle class is one of the most important tenets in building
a strong, prosperous, and stable society. The middle class serves as the bedrock of any
country: those who comprise the middle-class work hard, pay taxes, and buy goods. A true
solution to poverty in underdeveloped countries would create more prosperity for everyone, not
take prosperity from one region and redirect it into another. This so-called solution creates
at least as many problems as it supposedly solves.
Globalization has produced, and will seemingly continue to produce, a global standardization
of wealth in many ways. For those special interests who are in the process of creating a global
system, an economic uniformity across the globe is advantageous for the creation of this
one-world system.
I think the difference is owning of stock. If a person owns anough money to maintin the
current standard of living without employment this person belong to upper middle class.
Without working class votes they can't win. And those votes are lost
It's helpful that you told us who you were, in so few words. The Dems didn't lose
working-class votes in 2016: the median income of a Hillary voter was less than that
of a Trump voter [or maybe it was average? In any case, not much difference.] What the Dems
lost, was "white non-college-educated" voters. They retained working class voters of
color.
But hey, they don't count as working-class voters to you. Thanks for playing.
1) White collar are, by definition, working class, because they don't own the means of
production. What I see is an opposition between blue collars and white collars, that are two
wings of the working class, not that democrats are going against the working class.
For some reason, the main divide in politics today is a sort of culture war, and republicans
and other right wing parties managed to present the traditionalist side of the culture war as
the "working class" one, and therefore the other side as the evil cosmopolitan prosecco
sipping faux leftish but in reality very snobbish one, so that they pretend that they are the
working class party because of their traditionalist stance.
But they aren't: already the fact that they blame "cosmopolitans" shows that they think in
terms of nationalism (like Trump and his China virus), which is a way to deflect the
attention from class conflict.
So comparatively the Dems are still the working class party, and the fact that some working
class guys vote for trump sows that they suffer from false consciousness, not that the Dems
are too right wing (the dems ARE too right wing, but this isn't the reason some working class
guys are voting Trump).
2) Neoliberalism and free markets are not the same thing, and furthermore neoliberalism
and capitalism are not the same thing; at most neoliberalism is a form of unadultered
capitalism. However since neoliberalism basically means "anti new deal", and new deal
economies were still free market and still capitalist (we can call them social democratic,
but in this sense social democracy is a form of controlled capitalism), it follows that the
most economically succesful form of capitalism and free markets to date is not
neoliberalism.
It's helpful that you told us who you were, in so few words. 43% of the US are non-voters.
The median household income of non-voters is less than half of the median income of a Clinton
voter (which was higher than the overall US median, albeit by less than the Trump median
was). Clinton didn't lose in 2016 because of who voted as much as who didn't ; every
serious analysis (and countless centrist screeds) since Trump's installation has told us
that. Losing the working class doesn't require that the Republicans gain them; if the working
class drops out, that shifts the electoral playing field further into the favor of politics
who cater to the remaining voting blocks. Democrats playing Republican-lite while mouthing
pieties about how they're totally not the party of the rich will always fare worse in that
field than Republicans playing Republicans while mouthing pieties about how they ARE the
party of the rich, but also of giving everyone a chance to make themselves rich. I know it's
been de rigour for both Dems and the GOP to ignore the first half of Clinton's
deplorable quote, but it truly was just as important as the half both sides freely remember.
The Democrats have become a party of C-suite diversity, and they have abandoned the working
class. And when their best pick for President's plenty bold plan for solving police violence
is to encourage LEOs to shoot people in the leg instead of the chest (something that could
only be said by a grifter or someone with more knowledge of Hollywood than ballistics
or anatomy), the prospect of keeping the non-white portions of the working class from
continuing to drop out is looking bleak.
MisterMr@49:
The traditional threading of that needle is to expand class-based analysis to more
accurately reflect real-world political and economic behavior. In the past (and in some
countries who updated the applicable definitions, still), the most relevant additional class
was the petty bourgeoisie; in the modern US, however, the concept of the
professional-managerial class is the most useful frame of reference.
"The traditional threading of that needle is to expand class-based analysis to more
accurately reflect real-world political and economic behavior. In the past (and in some
countries who updated the applicable definitions, still), the most relevant additional class
was the petty bourgeoisie; in the modern US, however, the concept of the
professional-managerial class is the most useful frame of reference."
Sure, but one has to adopt a logicwhen building "class" groups. One relrvant dimension is
educational attainment, which is IMHO where the "professional-managerial" class comes
from.
But, not everyone with a degree is a manager, and "professional" normally implies a level of
income that is higher that that of an average rank and file white collar.
So the question is whether this "new class" is really managers, or just white collar
workers who work in services instead than in industrial production.
Furthermore, as technology increases, it is natural that a larger share of people will work
in services and a smaller share in industry, for the same reason that increased agricultural
productivity means less agricultural jobs.
There are a great many unstated assumptions baked into this comment, but I'll take a shot
at a foundational one. You suggest PMC is a distinction without difference vis a vis middle
class appears to suggest that you've bought into a commonly accepted "truth" that can't
withstand close scrutiny, and your claim that economic status is not a useful distinguisher
only further drives it home. What is the cutoff between middle class and rich? I've seen far
too many well-educated idiots with professional degrees make ridiculous claims like $150k
household income representing a solidly middle-class income. That's in the upper 15% of
national incomes, but it's being called middle class. 240% of the national median household
income, but it's "middle class". And to pre-empt cost-of-living arguments, it's 175% of the
median household income in Manhattan. So when you say PMC is not a useful concept, and that
income is not a useful class distinction, I need to ask you where you draw your lines, or if
you're asserting that class has no economic aspect at all. If you're arguing that households
in the upper quintile and bottom quintile don't have different concerns, outlooks, values,
and lifestyles – that someone in either could be working class or middle class
(but I assume not upper class? Arguments like what yours appears to be typically don't start
the upper class anywhere below the 1% ) is hard to treat as serious. If that is an assertion
you'd stand by, what that tells me is that you're using private definitions of working and
middle class, and they're essentially unintelligible.
@MisterMr White collar are, by definition, working class, because they don't own the means of
production
That's not the definition. For example: despite not owning any means of production,
lumpenproletariat is not part of the working class.
What I see is an opposition between blue collars and white collars, that are two wings
of the working class
If this is the way you feel, that's fine. It is, however, a controversial view. An
alternative (and quite convincing, imo) view is that "white collars" belong to the
'professional-managerial class', with entirely different interests.
Anyhow, a bourgeois democracy (aka 'dictatorship of the bourgeoisie') does not and can not
represent interests of the working class; this is indeed "by definition". Any benefits
encountered by the working class are coincidental.
And in the current circumstance, the struggle between the remains of domestic bourgeoisie
and global finance capitalism, the former faction is definitely – obviously –
better aligned with interests of the domestic working class.
Orange Watch 07.08.20 at 11:01 pm (no link)
steven t johnson@98:
There are a great many unstated assumptions baked into this comment, but I'll take a shot
at a foundational one. You suggest PMC is a distinction without difference vis a vis middle
class appears to suggest that you've bought into a commonly accepted "truth" that can't
withstand close scrutiny, and your claim that economic status is not a useful distinguisher
only further drives it home. What is the cutoff between middle class and rich? I've seen far
too many well-educated idiots with professional degrees make ridiculous claims like $150k
household income representing a solidly middle-class income. That's in the upper 15% of
national incomes, but it's being called middle class. 240% of the national median household
income, but it's "middle class". And to pre-empt cost-of-living arguments, it's 175% of the
median household income in Manhattan. So when you say PMC is not a useful concept, and that
income is not a useful class distinction, I need to ask you where you draw your lines, or if
you're asserting that class has no economic aspect at all. If you're arguing that households
in the upper quintile and bottom quintile don't have different concerns, outlooks, values,
and lifestyles – that someone in either could be working class or middle class
(but I assume not upper class? Arguments like what yours appears to be typically don't start
the upper class anywhere below the 1% ) is hard to treat as serious. If that is an assertion
you'd stand by, what that tells me is that you're using private definitions of working and
middle class, and they're essentially unintelligible.
"... The notion that socioeconomic status is the difference between working and middle classes strikes me as more convenient to obscurantists than useful to serious analysis. Even worse, true SES is better defined by the acceptability of marriage partners. (This brings up religion, by the way, meaning Sunday segregation is an overlooked phenomenon in discussions of systemic racism.) In particular, in dealing with so-called working class people, the issue of property, particularly home ownership, seems to be sharply pertinent. This is true in the form of privilege, such as interest mortgage deduction and property tax rates. (Yes, I know this is not an acceptable use of the term "privilege" but this actually means something, so there.) ..."
"... Most of all, many people live in de facto one party systems, where elections don't make much difference. Much of this country would be more usefully understood I think as more like Mexico or the Philippines, where caciques and landed families tend to run things. The factional struggles play out in the struggles for nominations of the ruling party, while the Outs play catchup in the Out Party, whatever it may be called. The larger part of the people have no political vehicle at all, therefore are largely disengaged. ..."
"... Lastly, on the OP, I'm not at all convinced the near collapse of the stock market and the international credit system last winter, which prompted the reversal of all efforts by the Fed to "normalize" the financial system, wasn't the beginning of the economic consequences we face. And that the pandemic is simply the gust of wind that toppled the house of cards. ..."
A note on the "professional-managerial class," if you don't mind?
Generally a professional is a small businessman. A clergyman may not be able to sell his
practice but a doctor or a lawyer can. But clergy have even greater powers over who gets to
compete than the AMA or the Bar do.
As for managers, those with an individually negotiated contract, especially those that
include things like stock options, golden parachutes, etc. seem to me to be in an entirely
different, well, class, than most others.
Academics who have an agent have a different situation than those who don't. Even
so-called police unions have enough influence over policies and budgets (as near as I can
tell) that the Fraternal Order of Police, or the Police Benevolent Association are more like
the Bar than a trade union. I suggest "professional-managerial class" is not enough a genuine
thing to be useful at all.
The notion that socioeconomic status is the difference between working and middle
classes strikes me as more convenient to obscurantists than useful to serious analysis. Even
worse, true SES is better defined by the acceptability of marriage partners. (This brings up
religion, by the way, meaning Sunday segregation is an overlooked phenomenon in discussions
of systemic racism.) In particular, in dealing with so-called working class people, the issue
of property, particularly home ownership, seems to be sharply pertinent. This is true in the
form of privilege, such as interest mortgage deduction and property tax rates. (Yes, I know
this is not an acceptable use of the term "privilege" but this actually means something, so
there.)
And other issues such as decline in property values, tax rates, school districts, are
pertinent to individuals deciding what their "wallets" are doing. The question for many is,
what's going to happen for their families in the long run, not just this quarter's profits.
The fact that most people don't make profits is even more relevant in my opinion. (Yes,
Obamacare was something of a redistribution the biggest since Shrub added prescription
benefits. This kind of reasoning tells us Nixon was a liberal president!)
Most of all, many people live in de facto one party systems, where elections don't
make much difference. Much of this country would be more usefully understood I think as more
like Mexico or the Philippines, where caciques and landed families tend to run things. The
factional struggles play out in the struggles for nominations of the ruling party, while the
Outs play catchup in the Out Party, whatever it may be called. The larger part of the people
have no political vehicle at all, therefore are largely disengaged.
On the subject of change, change from time is remorseless, invincible but usually
invisible. It is always today, which is pretty much like yesterday, and tomorrow is pretty
much like today, but the changes still come, despite the plans of a changer. This is true
despite the seeming invulnerability to time of all manner of habits, from the imperial
measures to the QWERTY keyboard. The idea that all sorts of things may be so simply because
they were and there hasn't been enough of a conscious decision by the majority to re-arrange
such things may deflate exaggerated ideas of agency. But it's so.
Lastly, on the OP, I'm not at all convinced the near collapse of the stock market and
the international credit system last winter, which prompted the reversal of all efforts by
the Fed to "normalize" the financial system, wasn't the beginning of the economic
consequences we face. And that the pandemic is simply the gust of wind that toppled the house
of cards.
"... From wiping out the ability of regular folks to declare bankruptcy (something supported by our founding fathers who were NOT socialists), to shipping our industrial base to communist China (which in less enlightened days would have been termed treason), to spending tens of trillions of dollars bailing out and subsiding the big banks (that's not a misprint), to supporting "surprise medical billing," to opening the borders to massive third-world immigration so that wages can be driven down and reset and profits up (As 2015 Bernie Sanders pointed out), Backstabbing Joe Biden is neoliberal scum pure and simple. ..."
"... It's astonishing that so many people will just blindly accept what they are told, that Biden is. "moderate." Biden is so far to the right, he makes Nixon look like Trotsky. ..."
"... Joe Biden is a crook and a con man. He has been lying his whole life. Claimed in his 1988 Campaign to have got 3 degrees at college and finished in top half of his class. Actually only got 1 degree & finished 76th out of 85 in his class. ..."
Yet another circus. The proles get to scream and holler, and when all is done, the oligarchy gets the policies it wants, the public
be damned. Our sham 'democracy' is a con to privatize power and socialize responsibility.
Although it is shocking to see such a disgusting piece of human garbage like Joe Biden get substantial numbers of people to
vote for him. Biden has never missed a chance to stab the working class in the back in service to his wealthy patrons.
The issue is not (for me) his creepiness (I wouldn't much mind if he was on my side), nor even his Alzheimer's, but his established
track record of betrayal and corruption.
From wiping out the ability of regular folks to declare bankruptcy (something supported by our founding fathers who were NOT
socialists), to shipping our industrial base to communist China (which in less enlightened days would have been termed treason),
to spending tens of trillions of dollars bailing out and subsiding the big banks (that's not a misprint), to supporting "surprise
medical billing," to opening the borders to massive third-world immigration so that wages can be driven down and reset and profits
up (As 2015 Bernie Sanders pointed out), Backstabbing Joe Biden is neoliberal scum pure and simple.
It's astonishing that so many people will just blindly accept what they are told, that Biden is. "moderate." Biden is so
far to the right, he makes Nixon look like Trotsky. Heck, he makes Calvin Coolidge look like Trotsky.
Joe Biden is a crook and a con man. He has been lying his whole life. Claimed in his 1988 Campaign to have got 3 degrees at college and finished in top half of his class. Actually only got 1 degree & finished 76th out of 85 in his class.
"... Mass unemployment will bring the United States closer to less-developed economies. Very large regions of the poor will surround small enclaves of the rich. Narrow bands of "middle-income professionals," etc., will separate rich from poor. Ever-more rigid social divisions enforced by strong police and military apparatuses are becoming the norm. Their outlines are already visible across the United States. ..."
"... In this context, U.S. capitalism strode confidently toward the 21st century. The Soviet threat had imploded. A divided Europe threatened no U.S. interests. Its individual nations competed for U.S. favor (especially the UK). China's poverty blocked its becoming an economic competitor. U.S. military and technological supremacy seemed insurmountable. ..."
"... Amid success, internal contradictions surfaced. U.S. capitalism crashed three times. The first happened early in 2000 (triggered by dot-com share-price inflation); next came the big crash of 2008 (triggered by defaulting subprime mortgages); and the hugest crash hit in 2020 (triggered by COVID-19). ..."
"... Second, we must face a major obstacle. Since 1945, capitalists and their supporters developed arguments and institutions to undo the New Deal and its leftist legacies. They silenced, deflected, co-opted, and/or demonized criticisms of capitalism. ..."
"... Third, to newly organized versions of a New Deal coalition or of social democracy, we must add a new element. We cannot again leave capitalists in the exclusive positions to receive enterprise profits and make major enterprise decisions. ..."
Organized labor led no mass opposition to Trump's presidency or the December 2017 tax cut or
the failed U.S. preparation for and management of COVID-19. Nor do we yet see a labor-led
national protest against the worst mass firing since the 1930s Great Depression. All of these
events, but especially the unemployment, mark an employers' class war against employees. The
U.S. government directs it, but the employers as a class inspire and benefit the most from
it.
Before the 2020 crash, class war had been redistributing wealth for decades from
middle-income people and the poor to the top 1 percent. That upward redistribution was U.S.
employers' response to the legacy of the New Deal. During the Great Depression and afterward,
wealth had been redistributed downward. By the 1970s, that was reversed. The 2020 crash will
accelerate upward wealth redistribution sharply.
With tens of millions now a "reserve army" of the unemployed, nearly every U.S. employer can
cut wages, benefits, etc. Employees dissatisfied with these cuts are easily replaced. Vast
numbers of unemployed, stressed by uncertain job prospects and unemployment benefits,
disappearing savings, and rising household tensions, will take jobs despite reduced wages,
benefits, and working conditions. As the unemployed return to work, most employees' standards
of consumption and living will drop.
Germany, France, and other European nations could not fire workers as the United States did.
Strong labor movements and socialist parties with deep social influences preclude governments
risking comparable mass unemployment; it would risk deposing them from office. Thus their
antiviral lockdowns keep most at work with governments paying 70 percent or more of pre-virus
wages and salaries.
Mass unemployment will bring the United States closer to less-developed economies. Very
large regions of the poor will surround small enclaves of the rich. Narrow bands of
"middle-income professionals," etc., will separate rich from poor. Ever-more rigid social
divisions enforced by strong police and military apparatuses are becoming the norm. Their
outlines are already visible across the United States.
Only if workers understand and mobilize to fight this class war can the trends sketched
above be stopped or reversed. U.S. workers did exactly that in the 1930s. They fought -- in
highly organized ways -- the class war waged against them then. Millions joined labor unions,
and many tens of thousands joined two socialist parties and one communist party. All four
organizations worked together, in coalition, to mobilize and activate the U.S. working
class.
Weekly, and sometimes daily, workers marched across the United States. They criticized
President Franklin D. Roosevelt's policies and capitalism itself by intermingling reformist and
revolutionary demands. The coalition's size and political reach forced politicians, including
FDR, to listen and respond, often positively. An initially "centrist" FDR adapted to become a
champion of Social Security, unemployment insurance, a minimum wage, and a huge federal jobs
program. The coalition achieved those moderate socialist reforms -- the New Deal -- and paid
for them by setting aside revolutionary change.
It proved to be a good deal, but only in the short run. Its benefits to workers included a
downward redistribution of income and wealth (especially via homeownership), and thereby the
emergence of a new "middle class." Relatively well-paid employees were sufficient in number to
sustain widespread notions of American exceptionalism, beliefs in ever-rising standards of
working-class living across generations, and celebrations of capitalism as guaranteeing these
social benefits. The reality was quite different. Not capitalists but rather their critics and
victims had forced the New Deal against capitalists' resistance. And those middle-class
benefits bypassed most African Americans.
The good deal did not last because U.S. capitalists largely resented the New Deal and sought
to undo it. With World War II's end and FDR's death in 1945, the undoing accelerated. An
anti-Soviet Cold War plus anti-communist/socialist crusades at home gave patriotic cover for
destroying the New Deal coalition. The 1947 Taft-Hartley Act targeted organized labor. Senate
and House committees spearheaded a unified effort (government, mass media, and academia) to
demonize, silence, and socially exclude communists, socialists, leftists, etc. For decades
after 1945 -- and still now in parts of the United States -- a sustained hysteria defined all
left-wing thought, policy, or movement as always and necessarily the worst imaginable social
evil.
Over time, the New Deal coalition was destroyed and left-wing thinking was labeled
"disloyal." Even barely left-of-center labor and political organizations repeatedly denounced
and distanced themselves from any sort of anti-capitalist impulse, any connection to socialism.
Many New Deal reforms were evaded, amended, or repealed. Some simply vanished from politicians'
knowledge and vocabulary and then journalists' too. Having witnessed the purges of leftist
colleagues from 1945 through the 1950s, a largely docile academic community celebrated
capitalism in general and U.S. capitalism in particular. The good in U.S. society was
capitalism's gift. The rest resulted from government or foreign or ideological interferences in
capitalism's wonderful invisible hand. Any person or group excluded from this American Dream
had only themselves to blame for inadequate ability, insufficient effort, or ideological
deviancy.
In this context, U.S. capitalism strode confidently toward the 21st century. The Soviet
threat had imploded. A divided Europe threatened no U.S. interests. Its individual nations
competed for U.S. favor (especially the UK). China's poverty blocked its becoming an economic
competitor. U.S. military and technological supremacy seemed insurmountable.
Amid success, internal contradictions surfaced. U.S. capitalism crashed three times. The
first happened early in 2000 (triggered by dot-com share-price inflation); next came the big
crash of 2008 (triggered by defaulting subprime mortgages); and the hugest crash hit in 2020
(triggered by COVID-19). Unprepared economically, politically, and ideologically for any of
them, the Federal Reserve responded by creating vast sums of new money that it threw at/lent to
(at historically low interest rates) banks, large corporations, etc. Three successive exercises
in trickle-down economic policy saw little trickle down. No underlying economic problems
(inequality, excess systemic debts, cyclical instability, etc.) have been solved. On the
contrary, all worsened. In other words, class war has been intensified.
What then is to be done? First, we need to recognize the class war that is underway and
commit to fighting it. On that basis, we must organize a mass base to put real political force
behind social democratic policies, parties, and politicians. We need something like the New
Deal coalition. The pandemic, economic crash, and gross official policy failures (including
violent official scapegoating) draw many toward classical social democracy. The successes of
the Democratic Socialists of America show this.
Second, we must face a major obstacle. Since 1945, capitalists and their supporters
developed arguments and institutions to undo the New Deal and its leftist legacies. They
silenced, deflected, co-opted, and/or demonized criticisms of capitalism. Strategic decisions
made by both the U.S. New Deal and European social democracy contributed to their defeats. Both
always left and still leave employers exclusively in positions to (1) receive and dispense
their enterprises' profits and (2) decide and direct what, how, and where their enterprises
produce. Those positions gave capitalists the financial resources and power -- politically,
economically, and culturally -- repeatedly to outmaneuver and repress labor and the left.
Third, to newly organized versions of a New Deal coalition or of social democracy, we must add a new element. We cannot
again leave capitalists in the exclusive positions to receive enterprise profits and make major enterprise decisions. The
new element is thus the demand to change enterprises producing goods and services. From hierarchical, capitalist organizations
(where owners, boards of directors, etc., occupy the employer position) we need to transition to the altogether different
democratic, worker co-op organizations. In the latter, no employer/employee split occurs. All workers have equal voice in
deciding what gets produced, how, and where and how any profits get used. The collective of all employees is their own employer.
As such an employer, the employees will finally protect and thus secure the reforms associated with the New Deal and social
democracy.
We could describe the transition from capitalist to worker co-op enterprise organizations as
a revolution. That would resolve the old debate of reform versus revolution. Revolution becomes
the only way finally to secure progressive reforms. Capitalism's reforms were generated by the
system's impacts on people and their resulting demands for change. Capitalism's resistances to
those reforms -- and undoing them after they happened -- spawned the revolution needed to
secure them. In that revolution, society moves beyond capitalism itself. So it was in the
French Revolution: demands for reform within feudal society could only finally be realized by a
social transition from feudalism to capitalism.
"... It's a commonplace to say the primary job of police is to "protect and serve," but that's not their goal in the way it's commonly understood -- not in the deed, the practice of what they daily do, and not true in the original intention, in why police departments were created in the first place. "Protect and serve" as we understand it is just the cover story. ..."
"... Urban police forces in America were created for one purpose -- to "maintain order" after a waves of immigrants swept into northern U.S. cities, both from abroad and later from the South, immigrants who threatened to disturb that "order." The threat wasn't primarily from crime as we understand it, from violence inflicted by the working poor on the poor or middle class. The threat came from unions, from strikes, and from the suffering, the misery and the anger caused by the rise of rapacious capitalism. ..."
"... What's being protected? The social order that feeds the wealthy at the expense of the working poor. Who's being served? Owners, their property, and the sources of their wealth, the orderly and uninterrupted running of their factories. The goal of police departments, as originally constituted, was to keep the workers in line, in their jobs, and off the streets. ..."
"... In most countries, the police are there solely to protect the Haves from the Have-Nots. In fact, when the average frustrated citizen has trouble, the last people he would consider turning to are the police. ..."
"... Jay Gould, a U.S. robber baron, is supposed to have claimed that he could hire one half of the working class to kill the other half. ..."
"... I spent some time in the Silver Valley of northern Idaho. This area was the hot bed of labor unrest during the 1890's. Federal troops controlled the area 3 separate times,1892, 1894 and 1899. Twice miners hijacked trains loaded them with dynamite and drove them to mining company stamping mills that they then blew up. Dozens of deaths in shoot outs. The entire male population was herded up and placed in concentration camps for weeks. The end result was the assassination of the Governor in 1905. ..."
"... Interestingly this history has been completely expunged. There is a mining museum in the town which doesn't mention a word on these events. Even nationwide there seems to be a complete erasure of what real labor unrest can look like.. ..."
"... Straight-up fact: The police weren't created to preserve and protect. They were created to maintain order, [enforced] over certain subjected classes and races of people, including–for many white people, too–many of our ancestors, too.* ..."
Yves here. Tom mentions in passing the role
of Pinkertons as goons for hire to crush early labor activists. Some employers like Ford went as far as forming private armies for
that purpose. Establishing police forces were a way to socialize this cost.
[In the 1800s] the police increasingly presented themselves as a thin blue line protecting civilization, by which they meant
bourgeois civilization, from the disorder of the working class.
-- Sam Mitrani
here
It's a commonplace to say the primary job of police is to "protect and serve," but that's not their goal in the way it's commonly
understood -- not in the deed, the practice of what they daily do, and not true in the original intention, in why police departments
were created in the first place. "Protect and serve" as we understand it is just the cover story.
To understand the true purpose of police, we have to ask, "What's being protected?" and "Who's being served?"
Urban police forces in America were created for one purpose -- to "maintain order" after a waves of immigrants swept into northern
U.S. cities, both from abroad and later from the South, immigrants who threatened to disturb that "order." The threat wasn't primarily
from crime as we understand it, from violence inflicted by the working poor on the poor or middle class. The threat came from unions,
from strikes, and from the suffering, the misery and the anger caused by the rise of rapacious capitalism.
What's being protected? The social order that feeds the wealthy at the expense of the working poor. Who's being served? Owners,
their property, and the sources of their wealth, the orderly and uninterrupted running of their factories. The goal of police departments,
as originally constituted, was to keep the workers in line, in their jobs, and off the streets.
Looking Behind Us
The following comes from an
essay
published at the blog of the Labor and Working-Class History Association, an academic group for teachers of labor studies, by
Sam Mitrani, Associate Professor of History at the College of DuPage and author of The Rise of the Chicago Police
Department: Class and Conflict, 1850-1894 .
According to Mitrani, "The police were not created to protect and serve the population. They were not created to stop crime, at
least not as most people understand it. And they were certainly not created to promote justice. They were created to protect the
new form of wage-labor capitalism that emerged in the mid to late nineteenth century from the threat posed by that system's offspring,
the working class."
Keep in mind that there were no police departments anywhere in Europe or the U.S. prior to the 19th century -- in fact, "anywhere
in the world" according to Mitrani. In the U.S., the North had constables, many part-time, and elected sheriffs, while the South
had slave patrols. But nascent capitalism soon created a large working class, and a mass of European immigrants, "yearning to be
free," ended up working in capitalism's northern factories and living in its cities.
"[A]s Northern cities grew and filled with mostly immigrant wage workers who were physically and socially separated from the
ruling class, the wealthy elite who ran the various municipal governments hired hundreds and then thousands of armed men to impose
order on the new working class neighborhoods ." [emphasis added]
America of the early and mid 1800s was still a world without organized police departments. What the
Pinkertons were to strikes , these
"thousands of armed men" were to the unruly working poor in those cities.
Imagine this situation from two angles. First, from the standpoint of the workers, picture the oppression these armed men must
have represented, lawless themselves yet tasked with imposing "order" and violence on the poor and miserable, who were frequently
and understandably both angry and drunk. (Pre-Depression drunkenness, under this interpretation, is not just a social phenomenon,
but a political one as well.)
Second, consider this situation from the standpoint of the wealthy who hired these men. Given the rapid growth of capitalism during
this period, "maintaining order" was a costly undertaking, and likely to become costlier. Pinkertons, for example, were hired at
private expense, as were the "thousands of armed men" Mitrani mentions above.
The solution was to offload this burden onto municipal budgets. Thus, between 1840 and 1880, every major northern city
in America had created a substantial police force, tasked with a single job, the one originally performed by the armed men paid by
the business elites -- to keep the workers in line, to "maintain order" as factory owners and the moneyed class understood it.
"Class conflict roiled late nineteenth century American cities like Chicago, which experienced major strikes and riots in 1867,
1877, 1886, and 1894. In each of these upheavals, the police attacked strikers with extreme violence, even if in 1877 and 1894 the
U.S. Army played a bigger role in ultimately repressing the working class. In the aftermath of these movements, the police increasingly
presented themselves as a thin blue line protecting civilization , by which they meant bourgeois civilization, from the disorder
of the working class. This ideology of order that developed in the late nineteenth century echoes down to today – except that today,
poor black and Latino people are the main threat, rather than immigrant workers."
That "thin blue line protecting civilization" is the same blue line we're witnessing today. Yes, big-city police are culturally
racist as a group; but they're not just racist. They dislike all the "unwashed." A
recent study that reviewed "all the data
available on police shootings for the year 2017, and analyze[d] it based on geography, income, and poverty levels, as well as race"
revealed the following remarkable pattern:
" Police violence is focused overwhelmingly on men lowest on the socio-economic ladder : in rural areas outside the
South, predominately white men; in the Southwest, disproportionately Hispanic men; in mid-size and major cities, disproportionately
black men. Significantly, in the rural South, where the population is racially mixed, white men and black men are killed by police
at nearly identical rates."
As they have always been, the police departments in the U.S. are a violent force for maintaining an order that separates and protects
society's predator class from its victims -- a racist order to be sure, but a class-based order as well.
Looking Ahead
We've seen the violence of the police as visited on society's urban poor (and anyone else, poor or not, who happens to be the
same race and color as the poor too often are), and we've witnessed the violent reactions of police to mass protests challenging
the racism of that violence.
But we've also seen the violence of police during the mainly white-led Occupy movement (one instance
here ; note that while the officer involved
was fired, he was also compensated $38,000 for "suffering he experienced after the incident").
So what could we expect from police if there were, say, a national, angry, multiracial rent strike with demonstrations? Or a student
debt s trike? None of these possibilities are off the table, given the
economic damage -- most of it still unrealized -- caused by the current Covid crisis.
Will police "protect and serve" the protesters, victims of the latest massive
transfer of wealth
to the already massively wealthy? Or will they, with violence, "maintain order" by maintaining elite control of the current predatory
system?
If Mitrani is right, the latter is almost certain.
Possible solutions? One, universal public works system for everyone 18-20. [Avoiding armed service because that will never
happen, nor peace corp.] Not allow the rich to buy then or their children an out. Let the billionaires children work along side
those who never had a single family house or car growing up.
Two, eliminate suburban school districts and simply have one per state, broken down into regional areas. No rich [or white]
flight to avoid poor systems. Children of differing means growing up side by side. Of course the upper class would simply send
their children to private schools, much as the elite do now anyway.
Class and privilege is the real underlying issue and has been since capital began to be concentrated and hoarded as the article
points out. It has to begin with the children if the future is to really change in a meaningful way.
I would add items targeted as what is causing inequality. Some of these might be:
1). Abolish the Federal Reserve. It's current action since 2008 are a huge transfer of wealth from us to the wealthy. No more
Quantitative Easing, no Fed buying of stocks or bonds.
2). Make the only retirement and medical program allowed Congress and the President, Social Security and Medicare. That will
cause it to be improved for all of us.
3). No stock ownership allowed for Congress folk while serving terms. Also, rules against joining those leaving Congress acting
as lobbyists.
4). Something that makes it an iron rule that any law passed by Congress and the President, must equally apply to Congress
and the President. For example, no separate retirement or healthcare access, but have this more broadly applied to all aspects
of legislation and all aspects of life.
I think you'd also have to legalize drugs and any other thing that leads creation of "organized ciminal groups." Take away
the sources that lead to the creation of the well-armed gangs that control illegal activities.
Unfortunately, legalising drugs in itself, whatever the abstract merits, wouldn't solve the problem. Organised crime would
still have a major market selling cut-price, tax-free or imitation drugs, as well, of course, as controlled drugs which are not
allowed to be sold to just anybody now. Organised crime doesn't arise as a result of prohibitions, it expands into new areas thanks
to them, and often these areas involve smuggling and evading customs duties. Tobacco products are legal virtually everywhere,
but there's a massive criminal trade in smuggling them from the Balkans into Italy, where taxes are much higher. Any time you
create a border, in effect, you create crime: there is even alcohol smuggling between Sweden and Norway. Even when activities
are completely legal (such as prostitution in many European countries) organised crime is still largely in control through protection
rackets and the provision of "security."
In effect, you'd need to abolish all borders, all import and customs duties and all health and safety and other controls which
create price differentials between states. And OC is not fussy, it moves from one racket to another, as the Mafia did in the 1930s
with the end of prohibition. To really tackle OC you'd need to legalise, oh, child pornography, human trafficking, sex slavery,
the trade in rare wild animals, the trade in stolen gems and conflict diamonds, internet fraud and cyberattacks, and the illicit
trade in rare metals, to name, as they say, but a few. As Monty Python well observed, the only way to reduce the crime rate (and
hence the need for the police) is to reduce the number of criminal offences. Mind you, if you defund the police you effectively
legalise all these things anyway.
I dunno, ending Prohibition sure cut down on the market for bootleg liquor. It's still out there, but the market is nothing
like what it once was.
Most people, even hardcore alcoholics, aren't going to go through the hassle of buying rotgut of dubious origin just to save
a few dimes, when you can go to the corner liquor store and get a known product, no issues with supply 'cause your dealer's supplier
just got arrested.
For that matter, OC is still definitely out there, but it isn't the force that it was during Prohibition, or when gambling
was illegal.
As an aside, years ago, I knew a guy whose father had worked for Meyer Lansky's outfit, until Prohibition put him and others
out of a job. As a token of his loyal service, the outfit gave him a (legal) liquor store to own and run.
Yes, but in Norway, for example, you'd pay perhaps $30 for a six-pack of beer in a supermarket, whereas you'd pay half that
to somebody selling beers out of the back of a car. In general people make too much of the Prohibition case, which was geographically
and politically very special, and a a stage in history when OC was much less sophisticated. The Mob diversified into gambling
and similar industries (higher profits, fewer risks). These days OC as a whole is much more powerful and dangerous, as well as
sophisticated, than it was then, helped by globalisation and the Internet.
I think ending prohibitions on substances, would take quite a bite out of OC's pocketbook. and having someone move trailers
of ciggarettes of bottles of beer big deal. That isn't really paying for the lifestyle.and it doesn't buy political protection.
An old number I saw @ 2000 . the UN figured(guess) that illegal drugs were @ 600 billion dollars/year industry and most of that
was being laundered though banks. Which to the banking industry is 600 billion in cash going into it's house of mirrors. Taking
something like that out of the equation EVERY YEAR is no small thing. And the lobby from the OC who wants drugs kept illegal,
coupled with the bankers who want the cash inputs equals a community of interest against legalization
and if the local police forces and the interstate/internationals were actually looking to use their smaller budgets and non-bill
of rights infringing tactics, on helping the victim side of crimes then they could have a real mission/ Instead of just abusing
otherwise innocent people who victimize no one.
so if we are looking for "low hanging fruit" . ending the war on drugs is a no brainer.
"What's being protected? The social order that feeds the wealthy at the expense of the working poor. " – Neuberger
In the aftermath of these movements, the police increasingly presented themselves as a thin blue line protecting civilization,
by which they meant bourgeois civilization, from the disorder of the working class. – Mitrani
I think this ties in, if only indirectly, with the way so many peaceful recent protests seemed to turn violent after the police
showed up. It's possible I suppose the police want to create disorder to frighten not only the protestors with immediate harm
but also frighten the bourgeois about the threate of a "dangerous mob". Historically violent protests created a political backlash
that usually benefited political conservatives and the wealthy owners. (The current protests may be different in this regard.
The violence seems to have created a political backlash against conservatives and overzealous police departments' violence. )
My 2 cents.
Sorry, but the title sent my mind back to the days of old -- of old Daley, that is, and his immortal quote from 1968: "Gentlemen,
let's get the thing straight, once and for all. The policeman isn't there to create disorder; the policeman is there to preserve
disorder."
LOL!!! great quote. Talk about saying it the way it is.
It kind of goes along with, "Police violence is focused overwhelmingly on men lowest on the socio-economic ladder: in rural
areas outside the South, predominately white men; in the Southwest, disproportionately Hispanic men; in mid-size and major cities,
disproportionately black men. Significantly, in the rural South, where the population is racially mixed, white men and black men
are killed by police at nearly identical rates."
I bang my head on the table sometimes because poor white men and poor men of color are so often placed at odds when they increasingly
face (mostly) the same problems. God forbid someone tried to unite them, there might really be some pearl clutching then.
yeah, like Martin Luther King's "poor people's campaign". the thought of including the poor ,of all colors .. just too much
for the status quo to stomach.
The "mechanism" that keeps masses in line . is one of those "invisible hands" too.
Great response! I am sure you have more to add to this. A while back, I was researching the issues you state in your last paragraph.
Was about ten pages into it and had to stop as I was drawn out of state and country. From my research.
While not as overt in the 20th century, the distinction of black slave versus poor white man has kept the class system alive
and well in the US in the development of a discriminatory informal caste system. This distraction of a class level lower than
the poorest of the white has kept them from concentrating on the disproportionate, and growing, distribution of wealth and income
in the US. For the lower class, an allowed luxury, a place in the hierarchy and a sure form of self esteem insurance.
Sennett and Cobb (1972) observed that class distinction sets up a contest between upper and lower class with the lower social
class always losing and promulgating a perception amongst themselves the educated and upper classes are in a position to judge
and draw a conclusion of them being less than equal. The hidden injury is in the regard to the person perceiving himself as a
piece of the woodwork or seen as a function such as "George the Porter." It was not the status or material wealth causing the
harsh feelings; but, the feeling of being treated less than equal, having little status, and the resulting shame. The answer for
many was violence.
James Gilligan wrote "Violence; Reflections on A National Epidemic." He worked as a prison psychiatrist and talked with many
of the inmates of the issues of inequality and feeling less than those around them. His finding are in his book which is not a
long read and adds to the discussion.
A little John Adams for you.
" The poor man's conscience is clear . . . he does not feel guilty and has no reason to . . . yet, he is ashamed. Mankind
takes no notice of him. He rambles unheeded.
In the midst of a crowd; at a church; in the market . . . he is in as much obscurity as he would be in a garret or a cellar.
He is not disapproved, censured, or reproached; he is not seen . . . To be wholly overlooked, and to know it, are intolerable
."
likbez, June 19, 2020 at 3:18 pm
That's a very important observation.
Racism, especially directed toward blacks, along with "identity wedge," is a perfect tool for disarming poor white, and suppressing
their struggle for a better standard of living, which considerably dropped under neoliberalism.
In other words, by providing poor whites with a stratum of the population that has even lower social status, neoliberals manage
to co-opt them to support the policies which economically ate detrimental to their standard of living as well as to suppress the
protest against the redistribution of wealth up and dismantling of the New Deal capitalist social protection network.
This is a pretty sophisticated, pretty evil scheme if you ask me. In a way, "Floydgate" can be viewed as a variation on the same
theme. A very dirty game indeed, when the issue of provision of meaningful jobs for working poor, social equality, and social
protection for low-income workers of any color is replaced with a real but of secondary importance issue of police violence against
blacks.
This is another way to explain "What's the matter with Kansas" effect.
John Anthony La Pietra, June 19, 2020 at 6:20 pm
I like that one! - and I have to admit it's not familiar to me, though I've been a fan since before I got to play him in a
neighboring community theater. Now I'm having some difficulty finding it. Where is it from, may I ask?
run75441, June 20, 2020 at 7:56 am
JAL:
Page 239, "The Works of John Adams, Second President of the United States."
Read the book "Violence: Reflections of A National Epidemic" . Not a long read and well documented.
MLK Jr. tried, and look what happened to him once he really got some traction. If the Rev. William Barber's Poor People's Campaign
picks up steam, I'm afraid the same thing will happen to him.
I wish it were only pearl-clutching that the money power would resort to, but that's not the way it works.
Yeah – that quote struck me too, never seen it before. At times when they feel so liberated to 'say the quiet part out loud',
then as now, you know the glove is coming off and the vicious mailed fist is free to roam for victims.
Those times are where you know you need to resist or .well, die in many cases.
That's something that really gets me in public response to many of these things. The normal instinct of the populace to wake
from their somnambulant slumber just long enough to ascribe to buffoonery and idiocy ala Keystone Cops the things so much better
understood as fully consciously and purposefully repressive, reactionary, and indicating a desire to take that next step to crush
fully. To obliterate.
Many responses to this – https://twitter.com/oneunderscore__/status/1273809160128389120
– are like, 'the police are dumb', 'out of touch', 'a lot of dumb gomer pyles in that room, yuk yuk yuk'. Or, 'cops/FBI are
so dumb to pursue this antifa thing, its just a boogieman' thinking that somehow once the authorities realize 'antifa' is a boogieman,
their attitudes towards other protesters will somehow be different 'now that they realize the silliness of the claims'.
No, not remotely the case – to a terrifyingly large percentage of those in command, and in rank & file they know exactly where
it came from, exactly how the tactics work, and have every intention of classifying all protesters (peaceful or not) into that
worldview. The peaceful protesters *are* antifa in their eyes, to be dealt with in the fully approved manner of violence and repression.
In most countries, the police are there solely to protect the Haves from the Have-Nots. In fact, when the average frustrated
citizen has trouble, the last people he would consider turning to are the police.
This is why in the Third World, the only job of lower social standing than "policeman" is "police informer".
The anti-rascist identity of the recent protests rests on a much larger base of class warfare waged over the past 40 years
against the entire population led by a determined oligarchy and enforced by their political, media and militarized police retainers.
This same oligarchy, with a despicable zeal and revolting media-orchestrated campaign–co-branding the movement with it's usual
corporate perpetrators– distorts escalating carceral and economic violence solely through a lens of racial conflict and their
time-tested toothless reforms. A few unlucky "peace officers" may have to TOFTT until the furor recedes, can't be helped.
Crowding out debt relief, single payer health, living wages, affordable housing and actual justice reform from the debate that
would benefit African Americans more than any other demographic is the goal.
The handful of Emperors far prefer kabuki theater and random ritual Seppuku than facing the rage of millions of staring down
the barrel of zero income, debt, bankruptcy, evictions and dispossession. The Praetorians will follow the money as always.
I suppose we'll get some boulevards re-named and a paid Juneteenth holiday to compensate for the destruction 100+ years of
labor rights struggle, so there's that..
Homestead, Ludlow, Haymarket, Matewan -- the list is long
Working men and women asking for justice gunned down by the cops. There will always be men ready to murder on command as long
as the orders come from the rich and powerful. We are at a moment in history folks were some of us, today mostly people of color,
are willing to put their lives on the line. It's an ongoing struggle.
So how can a tier of society(the police) . be what a society needs ? When as this story and many others show how and why the
police were formed. To break heads. When they have been "the tool" of the elite forever. When so many of them are such dishonest,
immoral, wanna be fascists. And the main direction of the US is towards a police state and fascists running the show . both
republican and democrat. With technology being the boot on the neck of the people and the police are there to take it to the streets.
Can those elusive "good apples" turn the whole rotten barrel into sweet smelling apple pie? That is a big ask.
Or should the structure be liquidated, sell their army toys. fill the ranks with people who are not pathological liars and
abusers and /or racists; of one sort or another. Get rid of the mentality of overcompensation by uber machismo. and make them
watch the andy griffith show. They ought to learn that they can be respected if they are good people, and that they are not respected
because they seek respect through fear and intimidation.
Is that idiot cry of theirs, .. the whole yelling at you; demanding absolute obedience to arbitrary ,assinine orders, really
working to get them respect or is it just something they get off on?
When the police are shown to be bad, they strike by work slowdown, or letting a little chaos loose themselves. So the people
know they need them So any reform of the police will go through the police not doing their jobs . but then something like better
communities may result. less people being busted and harassed , or pulled over for the sake of a quota . may just show we don't
need so much policing anyway. And then if the new social workers brigade starts intervening in peoples with issues when they are
young and in school maybe fewer will be in the system. Couple that with the police not throwing their family in jail for nothing,
and forcing them to pay fines for breaking stupid laws. The system will have less of a load, and the new , better cops without
attitudes will be able to handle their communities in a way that works for everyone. Making them a net positive, as opposed to
now where they are a net negative.
Also,
The drug war is over. The cops have only done the bidding of the organized criminal elements who make their bread and butter
because of prohibition.
Our representatives can legally smoke pot , and grow it in their windowboxes in the capital dc., but people in many places
are still living in fear of police using possession of some substance,as a pretext to take all their stuff,throw them in jail.
But besides the cops, there are the prosecutors . they earn their salaries by stealing it from poor people through fines for things
that ought to be legal. This is one way to drain money from poor communities, causing people to go steal from others in society
to pay their court costs.
And who is gonna come and bust down your door when you can't pay a fine and choose to pay rent and buy your kids food instead
. the cops. just doing their jobs. Evil is the banality of business as usual
The late Kevin R C O'Brien noted that in every case where the Police had been ordered to "Round up the usual suspects" they
have done so, and delivered them where ordered. It did not matter who the "Usual suspects" were, or to what fate they were
to be delivered. They are the King's men and they do the King's bidding.
To have a reasonable discussion, I think that it should be recognized that modern police are but one leg of a triad. The first
of course is the police who appear to seem themselves as not part of a community but as enforcers in that community. To swipe
an idea from Mao, the police should move amongst the people as a fish swims in the sea. Not be a patrolling shark that attacks
who they want at will knowing that there will be no repercussions against them. When you get to the point that you have police
arresting children in school for infractions of school discipline – giving them a police record – you know that things have gotten
out of hand.
The next leg is the courts which of course includes prosecutors. It is my understanding that prosecutors are elected to office
in the US and so have incentives to appear to be tough on crime"" . They seem to operate more like 'Let's Make a Deal' from what
I have read. When they tell some kid that he has a choice of 1,000 years in prison on trumped up charges or pleads guilty to a
smaller offence, you know that that is not justice at work. Judges too operate in their own world and will always take the word
of a policeman as a witness.
And the third leg is the prisons which operate as sweatshops for corporate America. It is in the interest of the police and
the courts to fill up the prisons to overflowing. Anybody remember the Pennsylvania "kids for cash" scandal where kids lives were
being ruined with criminal records that were bogus so that some people could make a profit? And what sort of prison system is
it where a private contractor can build a prison without a contract at all , knowing that the government (California in
this case) will nonetheless fill it up for a good profit.
In short, in sorting out police doctrine and methods like is happening now, it should be recognized that they are actually
only the face of a set of problems.
How did ancient states police? Perhaps Wiki is a starting point of this journey. Per Its entry, Police, in ancient Greece,
policing was done by public owned slaves. In Rome, the army, initially. In China, prefects leading to a level of government
called prefectures .
I spent some time in the Silver Valley of northern Idaho. This area was the
hot bed of labor unrest during
the 1890's. Federal troops controlled the area 3 separate times,1892, 1894 and 1899. Twice miners hijacked trains loaded them
with dynamite and drove them to mining company stamping mills that they then blew up. Dozens of deaths in shoot outs. The entire
male population was herded up and placed in concentration camps for weeks. The end result was the assassination of the Governor
in 1905.
Interestingly this history has been completely expunged. There is a mining museum in the town which doesn't mention a word
on these events. Even nationwide there seems to be a complete erasure of what real labor unrest can look like..
Yeah, labor unrest does get swept under the rug. Howard zinn had examples in his works "the peoples history of the United States"
The pictched battles in upstate new york with the Van Rennselear's in the 1840's breaking up rennselearwyk . the million acre
estate of theirs . it was a rent strike.
People remembering , we have been here before doesn't help the case of the establishment so they try to not let it happen.
We get experts telling us . well, this is all new we need experts to tell you what to think. It is like watching the
footage from the past 100 years on film of blacks marching for their rights and being told.. reform is coming.. the more things
change, the more things stay the same. Decade after decade. Century after century. Time to start figuring this out people. So,
the enemy is us. Now what?
Doubtless the facts presented above are correct, but shouldn't one point out that the 21st century is quite different from
the 19th and therefore analogizing the current situation to what went on before is quite facile? For example it's no longer necessary
for the police to put down strikes because strike actions barely still exist. In our current US the working class has diminished
greatly while the middle class has expanded. We are a much richer country overall with a lot more people–not just those one percenters–concerned
about crime. Whatever one thinks of the police, politically an attempt to go back to the 18th century isn't going to fly.
" the 21st century is quite different from the 19th "
From the Guardian: "How Starbucks, Target, Google and Microsoft quietly fund police through private donations"
More than 25 large corporations in the past three years have contributed funding to private police foundations, new report
says.
These foundations receive millions of dollars a year from private and corporate donors, according to the report, and are
able to use the funds to purchase equipment and weapons with little public input. The analysis notes, for example, how the
Los Angeles police department in 2007 used foundation funding to purchase surveillance software from controversial technology
firm Palantir. Buying the technology with private foundation funding rather than its public budget allowed the department to
bypass requirements to hold public meetings and gain approval from the city council.
The Houston police foundation has purchased for the local police department a variety of equipment, including Swat equipment,
sound equipment and dogs for the K-9 unit, according to the report. The Philadelphia police foundation purchased for its police
force long guns, drones and ballistic helmets, and the Atlanta police foundation helped fund a major surveillance network of
over 12,000 cameras.
In addition to weaponry, foundation funding can also go toward specialized training and support programs that complement
the department's policing strategies, according to one police foundation.
"Not a lot of people are aware of this public-private partnership where corporations and wealthy donors are able to siphon
money into police forces with little to no oversight," said Gin Armstrong, a senior research analyst at LittleSis.
Maybe it is just me, but things don't seem to be all that different.
While it is true, this is a new century. Knowing how the present came to be, is entirely necessary to be able to attempt any
move forward.
The likelihood of making the same old mistakes is almost certain, if one doesn't try to use the past as a reference.
And considering the effect of propaganda and revisionism in the formation of peoples opinions, we do need " learning against learning"
to borrow a Jesuit strategy against the reformation, but this time it should embrace reality, rather than sow falsehoods.
But I do agree,
We have never been here before, and now is a great time to reset everything. With all due respect to "getting it right" or at
least "better".
and knowing the false fables of righteousness, is what people need to know, before they go about "burning down the house".
You know it's not as though white people aren't also afraid of the police. Alfred Hitchcock said he was deathly afraid of police
and that paranoia informed many of his movies. Woody Allen has a funny scene in Annie Hall where he is pulled over by a cop and
is comically flustered. White people also get shot and killed by the police as the rightwingers are constantly pointing out.
And thousands of people in the streets tell us that police reform is necessary. But the country is not going to get rid of
them and replace police with social workers so why even talk about it? I'd say the above is interesting .not terribly relevant.
Straight-up fact: The police weren't created to preserve and protect. They were created to maintain order, [enforced] over
certain subjected classes and races of people, including–for many white people, too–many of our ancestors, too.*
And the question that arises from this: Are we willing to the subjects in a police state? Are we willing to continue to let
our Black and brown brothers and sisters be subjected BY such a police state, and to half-wittingly be party TO it?
Or do we want to exercise AGENCY over "our" government(s), and decide–anew–how we go out our vast, vast array of social ills.
Obviously, armed police officers with an average of six months training–almost all from the white underclass–are a pretty f*cking
blunt instrument to bring to bear.
On our own heads. On those who we and history have consigned to second-class citizenship.
Warning: this is a revolutionary situation. We should embrace it.
*Acceding to white supremacy, becoming "white" and often joining that police order, if you were poor, was the road out of such
subjectivity. My grandfather's father, for example, was said to have fled a failed revolution in Bohemia to come here. Look back
through history, you will find plenty of reason to feel solidarity, too. Race alone cannot divide us if we are intent on the lessons
of that history.
"... While not as overt in the 20th century, the distinction of black slave versus poor white man has kept the class system alive and well in the US in the development of a discriminatory informal caste system. ..."
"... a class level lower than the poorest of the white has kept them from concentrating on the disproportionate, and growing, distribution of wealth and income in the US. ..."
"... It was not the status or material wealth causing the harsh feelings; but, the feeling of being treated less than equal, having little status, and the resulting shame. ..."
"... In other words, by providing poor whites with a stratum of the population that has even lower social status, neoliberals manage to co-opt them to support the policies which economically ate detrimental to their standard of living as well as to suppress the protest against the redistribution of wealth up and dismantling of the New Deal capitalist social protection network. ..."
"... This is a pretty sophisticated, pretty evil scheme if you ask me. In a way, “Floydgate” can be viewed as a variation on the same theme. A very dirty game indeed, when the issue of provision of meaningful jobs for working poor, social equality, and social protection for low-income workers of any color is replaced with a real but of secondary importance issue of police violence against blacks. ..."
...A while back, I was researching the issues you state in your last paragraph. Was about ten pages into it and had to stop
as I was drawn out of state and country.
From my research.
While not as overt in the 20th century, the distinction of black slave versus poor white man has kept the class system
alive and well in the US in the development of a discriminatory informal caste system.
This distraction of a class level lower than the poorest of the white has kept them from concentrating on the disproportionate,
and growing, distribution of wealth and income in the US.
For the lower class, an allowed luxury, a place in the hierarchy and a sure form of self esteem insurance.
Sennett and Cobb (1972) observed that class distinction sets up a contest between upper and lower class with the lower social
class always losing and promulgating a perception amongst themselves the educated and upper classes are in a position to judge
and draw a conclusion of them being less than equal.
The hidden injury is in the regard to the person perceiving himself as a piece of the woodwork or seen as a function such as
"George the Porter."
It was not the status or material wealth causing the harsh feelings; but, the feeling of being treated less than equal,
having little status, and the resulting shame.
The answer for many was violence.
James Gilligan wrote "Violence; Reflections on A National Epidemic." He worked as a prison psychiatrist and talked with many
of the inmates of the issues of inequality and feeling less than those around them. His finding are in his book which is not a
long read and adds to the discussion.
A little John Adams for you.
"The poor man's conscience is clear . . . he does not feel guilty and has no reason to . . . yet, he is ashamed. Mankind
takes no notice of him. He rambles unheeded.
In the midst of a crowd; at a church; in the market . . . he is in as much obscurity as he would be in a garret or a cellar.
He is not disapproved, censured, or reproached; he is not seen . . . To be wholly overlooked, and to know it, are intolerable."
likbez June 19, 2020 1:25 pm
That’s a very important observation. Racism, especially directed toward blacks, along with “identity wedge,” is a perfect tool
for disarming poor white, and suppressing their struggle for a better standard of living, which considerably dropped under neoliberalism.
In other words, by providing poor whites with a stratum of the population that has even lower social status, neoliberals
manage to co-opt them to support the policies which economically ate detrimental to their standard of living as well as to suppress
the protest against the redistribution of wealth up and dismantling of the New Deal capitalist social protection network.
This is a pretty sophisticated, pretty evil scheme if you ask me. In a way, “Floydgate” can be viewed as a variation on
the same theme. A very dirty game indeed, when the issue of provision of meaningful jobs for working poor, social equality, and
social protection for low-income workers of any color is replaced with a real but of secondary importance issue of police violence
against blacks.
This is another way to explain “What’s the matter with Kansas” effect.
"... Anti-racism as an ideology serves a perfect function for corporations that ultimately take workers for granted. ..."
"... Today, we find Lincoln statues desecrated . Neither has the memorial to the 54th Massachusetts Infantry , one of the first all-black units in the Civil War, survived the recent protests unscathed. To many on the left, history seems like the succession of one cruelty by the next. And so, justice may only be served if we scrap the past and start from a blank slate. As a result, Lincoln's appeal that we stand upright and enjoy our liberty gets lost to time. ..."
"... Ironically, this will only help the cause of Robert E. Lee -- and the modern corporations who rely on cheap, inhumane labor to keep themselves going. ..."
"... Before black slaves did this work, white indentured servants had. (An indentured servant is bound for a number of years to his master, i.e. he can't pack up and leave to find a new opportunity elsewhere.) ..."
"... But in the eyes of the Southern slavocracy, the white laboring poor of the North also weren't truly human. Such unholy antebellum figures as the social theorist George Fitzhugh or South Carolina Senator James Henry Hammond urged that the condition of slavery be expanded to include poor whites, too. Their hunger for a cheap, subservient labor source did not stop at black people, after all. ..."
"... Always remember Barbara Fields's formula: The need for cheap labor comes first; ideologies like white supremacy only give this bleak reality a spiritual gloss. ..."
"... Michael Lind argues in his new book The New Class War that many powerful businesses in America today continue to rely on the work of quasi indentured servants. Hungry for unfree, cheap workers, corporations in Silicon Valley and beyond employ tens of thousands of foreign workers through the H-2B visa program. These workers are bound to the company that provided them with the visa. If they find conditions at their jobs unbearable, they can't switch employers -- they would get deported first. In turn, this source of cheap labor effectively underbids American workers who could do the same job, except that they would ask for higher pay. ..."
"... We're getting turned into rats. Naturally, this is no fertile soil for solidarity. And with so many jobs precarious and subcontracted out on a temporary basis, there is preciously little that most workers can do to fight back this insidious managerial control. Free labor looks different. ..."
"... It's hard to come out of the 2020 primaries without realizing that the corporations that run our mainstream media will do anything to protect their right to abuse cheap labor. ..."
"... At this point in history, to the extent that black people suffer any meaningful oppression at all, its down to disproportionate poverty rates, not their racial background. ..."
"... I agree one hundred percent with your take on Biden. Let me add something else: he is a war hawk who not only voted for the Iraq war but used his position as the chairman of an important committee to promote it. ..."
"... Because of slavery alot of bad political policy was incorporated in the founding documents. If a police officer is about to wrongly arrest you because you are black , you do not care if his hatred stems from 400 years of discrimination against blacks. Rather you care that he won't kill you in this encounter because of his racism. ..."
"... Baszak believes racism has no life of its own, it exists only as a tool of the bosses. This is vulgar Marxism. At least since the decades after Bacon's Rebellion ended in 1677, poor whites have invested in white supremacy as a way of boosting their social status. Most Southern families owned no slaves, yet most joined the Civil War cause. ..."
"... They made a movie that beautifully touches this in the 1970s with Harvey Keitel and Richard Pryor called " Blue Collar ." ..."
"... "That's exactly what the company wants: to keep you on their line," says Smokey, the coolest and most strategically minded of the crew. "They'll do anything to keep you on their line. They pit the lifers against the new boys, the old against the young, the black against the white -- everybody -- to keep us in our place." ..."
"... The core thesis in this piece is the animating foundation of The Hill's political talk show "Rising." Composed of a populist Bernie supporter (Krystal Ball) and populist conservative (Saagar Enjeti) as hosts, they frequently highlight the purpose of woke cultural battles is to distract everyone for their neoliberal economic models ..."
Anti-racism as an ideology serves a perfect function for corporations that ultimately take workers for granted.
Former injured Amazon employees join labor organizers and community activists to demonstrate and hold a press conference
outside of an Amazon Go store to express concerns about what they claim is the company's "alarming injury rate" among warehouse
workers on December 10, 2019 in Chicago, Illinois. (Photo by Scott Olson/Getty Images)
On April 2, 1865, in the dying days of the American Civil War, President Abraham Lincoln wandered the streets of burnt out Richmond,
the former Confederate capital. All of a sudden, Lincoln found himself surrounded by scores of emancipated men and women. Here's
how the historian James McPherson describes the moving episode in his magisterial book
Battle Cry of Freedom :
Several freed slaves touched Lincoln to make sure he was real. "I know I am free," shouted an old woman, "for I have seen Father
Abraham and felt him." Overwhelmed by rare emotions, Lincoln said to one black man who fell on his knees in front of him: "Don't
kneel to me. That is not right. You must kneel to God only, and thank Him for the liberty you will enjoy hereafter."
Lincoln's legacy as the Great Emancipator has survived the century and a half since then largely intact. But there have been cracks
in this image, mostly caused by questioning academics who decried him as an overt white supremacist. This view eventually entered
the mainstream when Nikole Hannah-Jones wrote misleadingly in her
lead essay
to the "1619 Project" that Lincoln "opposed black equality."
Today, we find Lincoln statues
desecrated . Neither has the memorial
to the 54th Massachusetts Infantry , one of the first all-black units in the Civil War, survived the recent protests unscathed.
To many on the left, history seems like the succession of one cruelty by the next. And so, justice may only be served if we scrap
the past and start from a blank slate. As a result, Lincoln's appeal that we stand upright and enjoy our liberty gets lost to time.
Ironically, this will only help the cause of Robert E. Lee -- and the modern corporations who rely on cheap, inhumane labor
to keep themselves going.
***
The main idea driving the "1619 Project" and so much of recent scholarship is that the United States of America originated in
slavery and white supremacy. These were its true founding ideals. Racism, Hannah-Jones writes, is in our DNA.
Such arguments don't make any sense, as the historian Barbara Fields clairvoyantly argued in a
groundbreaking essay from 1990. Why would Virginia planters in the 17th century import black people purely out of hate? No, Fields
countered, the planters were driven by a real need for dependable workers who would toil on their cotton, rice, and tobacco fields
for little to no pay. Before black slaves did this work, white indentured servants had. (An indentured servant is bound for a number
of years to his master, i.e. he can't pack up and leave to find a new opportunity elsewhere.)
After 1776 everything changed. Suddenly the new republic claimed that "all men are created equal" -- and yet there were millions
of slaves who still couldn't enjoy this equality. Racism helped to square our founding ideals with the brute reality of continued
chattel slavery: Black people simply weren't men.
But in the eyes of the Southern slavocracy, the white laboring poor of the North also weren't truly human. Such unholy antebellum
figures as the social theorist George Fitzhugh or South Carolina Senator James Henry Hammond
urged that the condition of slavery be expanded to include poor whites, too. Their hunger for a cheap, subservient labor source
did not stop at black people, after all.
Always remember Barbara Fields's formula: The need for cheap labor comes first; ideologies like white supremacy only give
this bleak reality a spiritual gloss.
The true cause of the Civil War -- and it bears constant
repeating for all the doubters -- was whether slavery would expand its reach or whether
"free labor" would reign supreme. The latter was the dominant
ideology of the North: Free laborers are independent, self-reliant, and eventually achieve economic security and independence by
the sweat of their brow. It's the American Dream. But if that is so, then the Civil War ended in a tie -- and its underlying conflict was never really settled.
***
Michael Lind argues in his new book The New Class War
that many powerful businesses in America today continue to rely on the work of quasi indentured servants. Hungry for unfree, cheap
workers, corporations in Silicon Valley and beyond employ tens of thousands of foreign workers through the H-2B visa program. These
workers are bound to the company that provided them with the visa. If they find conditions at their jobs unbearable, they can't switch
employers -- they would get deported first. In turn, this source of cheap labor effectively underbids American workers who could
do the same job, except that they would ask for higher pay.
America's wealth rests on this mutual competition between workers -- some nominally "free," others basically indentured -- whether
it be through unjust visa schemes or other unfair managerial practices.
Remember that the next time you read a public announcement by the Amazons of this world that they remain committed to "black lives
matter" and similar identitarian causes.
Fortunately, very few Americans hold the same racial resentments in their hearts as their ancestors did even just half a century
ago. Rarely did we agree as much than when the nation near unanimously condemned the death of George Floyd at the hands of a few
Minneapolis police officers. This is in keeping with another fortunate trend: Over the last 40 years, the rate of police killings
of young black men declined by 79% percent .
But anti-racism as an ideology serves a perfect function for our corporations, even despite the evidence that people in this country
have grown much less bigotted than they once were: As a management tool, anti-racism sows constant suspicion among workers who are
encouraged to detect white supremacist sentiments in everything that their fellow workers say or do.
We're getting turned into rats. Naturally, this is no fertile soil for solidarity. And with so many jobs precarious and subcontracted
out on a temporary basis, there is preciously little that most workers can do to fight back this insidious managerial control. Free
labor looks different.
And so, through a surprising back door, the true cause for which Robert E. Lee chose to betray his country might still be coming
out on top, whether we remove his statues or not -- namely, the steady supply to our ruling corporations of unfree workers willing
to hustle for scraps.
It's time to follow Abraham Lincoln's urging and get off our knees again. We should assert our rights as American citizens to
live free from economic insecurity and mutual resentment. The vast majority of us harbor no white supremacist views, period. Instead,
we have so many more things in common, and we know it.
Another anecdote from the last days of the Civil War, also taken from Battle Cry of Freedom, might prove instructive here: The
surrender of Lee's Army of Northern Virginia to Ulysses S. Grant at Appomattox Court House on April 9, 1865 essentially ended the
Civil War. The ceremony was held with solemn respect for Lee, though one of Grant's adjutants couldn't help himself but have a subtle
dig at Lee's expense:
After signing the papers, Grant introduced Lee to his staff. As he shook hands with Grant's military secretary Ely Parker,
a Seneca Indian, Lee stared a moment at Parker's dark features and said, "I am glad to see one real American here." Parker responded,
"We are all Americans."
Gregor Baszak is a PhD Candidate in English at the University of Illinois at Chicago and a writer. His articles have appeared
in Los Angeles Review of Books, Public Books, Spectator USA, Spiked, and elsewhere. Follow Gregor on Twitter at @gregorbas1.
It's a bit off-topic but this is a big reason I supported Bernie Sanders in the Democratic Primary this year, he was the only
candidate talking about how businesses demand that cheap labor, illegal labor, replace American labor. For this, the corporate
media called him a racist, an anti-semite, a dangerous radical. None of his opponents aside from Elizabeth Warren had anything
to run on aside from pseudo-woke touchy-feely bs. And somehow, with the media insisting that Joe Biden was the only one who could
beat Trump, we ended up with the one candidate who was neither good on economics, good for American workers, or offering platitudes
about wokeness.
It's hard to come out of the 2020 primaries without realizing that the corporations that run our mainstream media will do anything
to protect their right to abuse cheap labor.
Racism is very real. If it weren't it couldn't be used to "divide and conquer" the working calss. we can walk and chew gum
and the same time: oppose racism, and also oppose exploitive labor practices.
What kind of polemic, unsupported statement is "black fast food workers are the ones who gave us the fight for $15"? How about
it was a broad coalition of progressives (of all colors)? Moreover, $15 minimum wage is a poor, one-size-fits-all band-aid that
I doubt even fits ONE scenario. Tackling the broader shareholder capitalism model of labor arbitrage (free trade/mass immigration),
deunionization, and monopolistic hurdles drafted by corporations is where it actually matters. And on that, we are seeing the
inklings of a populist left-right coalition -- if corporate-funded race hustlers could only get out of the way.
That's the problem. We CAN'T chew gum and walk at the same time. Every minute focusing on racial friction is a minute NOT talking
about neoliberal economics. What's the ratio of air time, social media discussion, or newspaper inches are devoted to race vis-a-vis
the economic system that has starved the working class -- which is disproportionately black and brown? 10 to 1? 100 to 1? 1000
to 1? If there are no decent working class jobs for young black and brown men, then it makes it nearly impossible to raise families.
Let's be clear: Systemic racism is real, but it is far less impactful than economic injustices and family dissolution.
Class really isn't the primary issue for black people.
That's a frankly ridiculous statement. At this point in history, to the extent that black people suffer any meaningful oppression
at all, its down to disproportionate poverty rates, not their racial background. No one--except a few neurotic, high-strung corporate
HR PMC types--cares about "microaggressions". Even unjust police shootings of blacks are likely down to class and not race--despite
the politically correct narrative saying otherwise.
Putting racial identity politics as an equal (or even greater) priority than class-based solidarity creates an absurd system
where an upper-middle class black woman attending Yale can act as if a working class white man is oppressing her by not acknowledging
his "white privilege", and not bowing to her every demand. It's utterly delusional to think that sort of culture is going to create
a more just or equal world.
Biden is a Rorschach test, people see whatever they want in a party apparatchik. Trump has been Shiva, the destroyer of the
traditional Republican party. How else do you explain the support among Multi-Billionaires for the Democratic party. Truly ironic.
I agree one hundred percent with your take on Biden. Let me add something else: he is a war hawk who not only voted for the
Iraq war but used his position as the chairman of an important committee to promote it. I understand that he still wants to divide
Iraq into three separate countries--a decision for Iraqis to make and not us. If we try to implement that policy, it would doubtless
lead to more American deaths--to say nothing of Iraqi deaths.
So not only is he not good for American workers, he is not good for the American soldier who is disproportionately likely not
to be from the elite classes but rather from the working and lower-middle class.
The only other Democratic candidate who opposed war-mongering besides Sanders was Tulsi Gabbard. I watched CNN commentary after
a debate in which she participated. While the other participants received lots of commentary from CNN talking heads. she got almost
nothing. She was featured in a video montage of candidates saying "Trump"; other than that, she was invisible in the post-debate
analysis.
I don't know how far it travelled outside of Democratic primary voters, but I recall Biden's campaign saying that they were
planning to be sort of a placeholder that would pass the torch to the next generation. He's insinuated that he only wants to serve
one term and saw jumping into the race as the only way to beat Trump. Not the most exciting platform for the Democrats to run
on.
As depressing as this primary was, it's good to see that the rising generation of Democrats was resistant to platitudes and demanded
actual policy proposals.
Shame the party elders fell for the same old tricks yet again. I just hope that once there are more of
us, we can have a serious policy debate in both major parties about free trade, immigration, inequality. The parties' voters aren't
all that far apart on economics, yet neither of us is being given what we want. Whichever party sincerely takes a stand for the
American working class stands to dominate American politics for a generation.
The problem with Biden's "placeholder" comments is that he specifically mentioned it for Pete Buttigeig, the McKinsey-trained
career opportunist who believes in his bones the same neoliberal economics and interventionist foreign policies as the last generation.
Same bad ideas, new woke packaging.
Kamala Harris and Susan Rice, both tops on the VP list, will do just fine in place of Buttigieg - he's slated to revive TPP
as the new USTR cabinet lead.
Because of slavery alot of bad political policy was incorporated in the founding documents. If a police officer is about to
wrongly arrest you because you are black , you do not care if his hatred stems from 400 years of discrimination against blacks.
Rather you care that he won't kill you in this encounter because of his racism.
To me, I have always thought that America's original sin was slavery. Its stain can not be completely wiped out.
And I further believe that if Native Americans would have enslaved the newly arrived Europeans, and remained the ruling majority,
white people would be discriminated against today.
So the problem is not that white people are inherently evil, or other races are inherently good. It is that because of slavery
black people are bad, white people are good.
As a nation we have never been able to wash out the stain completely. Never will. Getting closer to the promised land is the
best we are going to do. Probably take another 400 years.
In everyday encounters no one cares how discrimination began, just treat me like you want to be treated. Pretty simple.
"As a management tool, anti-racism sows constant suspicion among workers who are encouraged to detect white supremacist sentiments
in everything that their fellow workers say or do."
The author does not offer one smidgen of proof that any company uses antiracism to divide workers. It might be plausible that
it's happened, but Baszak has no data at all.
Over the last 40 years, the rate of police killings of young black men declined by 79% percent.
You think this is an accident? It came about through intense pressure on the police to stop killing Black people -- exactly
the sort of racial emphasis the author seems to be decrying. Important to note that the non-fatal mistreatment has remained high.
The need for cheap labor comes first; ideologies like white supremacy only give this bleak reality a spiritual gloss
Baszak believes racism has no life of its own, it exists only as a tool of the bosses. This is vulgar Marxism. At least since
the decades after Bacon's Rebellion ended in 1677, poor whites have invested in white supremacy as a way of boosting their social
status. Most Southern families owned no slaves, yet most joined the Civil War cause. The psychological draw of racism, its cultural
strength, are obviated by Barszak. And I bet Barbara Fields does not consider racism an epiphenomenon of economics.
They made a movie that beautifully touches this in the 1970s with Harvey Keitel and Richard Pryor called "Blue
Collar."
"That's exactly what the company wants: to keep you on their line," says Smokey, the coolest and most strategically minded
of the crew. "They'll do anything to keep you on their line. They pit the lifers against the new boys, the old against the young,
the black against the white -- everybody -- to keep us in our place."
The core thesis in this piece is the animating foundation of The Hill's political talk show "Rising." Composed of a populist
Bernie supporter (Krystal Ball) and populist conservative (Saagar Enjeti) as hosts, they frequently highlight the purpose of woke
cultural battles is to distract everyone for their neoliberal economic models -- a system that actually has greater deleterious
impact on black communities.
This video is one recent example of what you'll rarely see in mainstream media:
Krystal Ball exposes the delusion of the American dream.
About Rising: Rising is a weekday morning show with bipartisan hosts that breaks the mold of
morning TV by taking viewers inside the halls of Washington power like never before. The show
leans into the day's political cycle with cutting edge analysis from DC insiders who can
predict what is going to happen.
It also sets the day's political agenda by breaking exclusive
news with a team of scoop-driven reporters and demanding answers during interviews with the
country's most important political newsmakers.
Got my degree just as the great recession hit. Couldn't find real work for 3 years, not
using my degree... But it was work. now after 8 years, im laid off. I did everything "right".
do good in school, go to college, get a job...
I've never been fired in my life. its always,
"Your contract is up" "Sorry we cant afford to keep you", "You can make more money collecting!
but we'll give a recommendation if you find anything."
Now I'm back where i started... only
now I have new house and a family to support... no pressure.
Sound too familiar? Sometime in the late 80s (??) Americans began to see day labors line up at Home Depot and Lowe's lots in numbers
not seen since The Great Depression. Manufacturing Corporations began subbing out their work to sub-contractors, otherwise known
as employees without benefits; Construction Contractors subbed out construction work to these employees without benefits; Engineering
Firms subbed out engineering to these employees without benefits; Landscapers' workers were now sub-contractors/independent contractors;
Here, in the SF Bay Area, time and again, we saw vans loads of undocumented Hispanics under a 'Labor Contractor' come in from the
Central Valley to build condos; the white Contractor for the project didn't have a single employee; none of the workers got a W-2.
Recall watching, sometime in the 90s (??), a familiar, well dressed, rotund guest from Wall Street, on the PBS News Hour, forcefully
proclaiming to the TV audience:
American workers are going to have to learn to compete with the Chinese; Civil Service employees, factory employees, are all
going to have to work for less
All this subcontracting, independent contractors, was a scam, a scam meant to circumvent paying going wages and benefits, to enhance
profit margins; a scam that transferred more wealth to the top. Meanwhile back at The Ranch, after the H1B Immigration Act of 1990,
Microsoft could hire programmers from India for one-half the cost of a citizen programmer. Half of Bill Gates' fortune was resultant
these labor savings; the other half was made off those not US Citizens. Taking a cue, Banks, Bio-Techs, some City and State Governments
began subcontracting out their programming to H1Bs. Often, the subcontractors/labor contractors (often themselves immigrants) providing
the programmers, held the programmers' passports/visas for security.
In the aftermath of Hurricane Katrina, friends of Bush/Cheney made fortunes on clean up contracts they subbed out for next to
nothing; the independent/subcontractor scam was now officially governmentally sanctioned.
By about 2000 we began to hear the term gig-workers applied to these employees without benefits. Uber appeared in 2007 to be followed
by Lift. Both are scams based on paying less than prevailing wages, on not providing worker benefits,
These days, the nightly news, when talking about the effect of the pandemic on the populace in America, shows footage of Food
Banks in California with lines 2! miles long. Many of those waiting in these lines didn't have a real job before; they were gig-workers;
they can't apply for Unemployment Benefits. It is estimated that 1.6 million American workers (1% of the workforce) are gig-workers;
they don't have a real job. That 1% is in addition to the 16 million American workers (10% of the workforce) that are independent
contractors. Of the more than 40 million currently unemployed Americans, some 17 million are either gig-workers or subcontractors/independent
contractors. All of these are scams meant to transfer more wealth to the top. All of these are scams with American Workers the victims;
scams, in a race to the bottom.
Democrats in the so called battle ground states would clean up at the polls with this. Why do you think those states strayed?
It was because Obama and Hillary had no idea what they really needed. Voters had no idea what they SPECIFICALLY needed either
-- UNIONS! They had been deunionized so thoroughly for so long that they THEMSELVES no long knew what they were missing (frogs
in the slowly boiling pot).
In 1988 Jesse Jackson took the Democratic primary in Michigan with 54% against Dukakis and Gephardt. Obama beat Wall Street
Romney and red-white-and-blue McCain in Wisconsin, Ohio and Michigan. But nobody told these voters -- because nobody seems to
remember -- what they really needed. These voter just knew by 2016 that Democrats had not what they needed and looked elsewhere
-- anywhere else!
Strom presents an easy as can be, on-step-back treatment that should go down oh, so smoothly and sweetly. What do you think?
ken melvin , May 31, 2020 1:04 pm
Denis
Thanks for your comment and the link. Wow! Where to start, huh?
SEIU was a player from the get go, but I don't want to go there just now.
Before Reagan, there was the first rust belt move to the non-union south. Why was the south so anti-union? I think this stuff
is engendered from infancy and most of us are incapable of thinking anew when it comes to stuff our parents 'taught' us. MLK was
the best thing that ever happened to the dirt-road poor south, yet they hated him and they hated the very unions that might have
lifted them up. They did seem to take pleasure in the yanks' loss of jobs.
I think the Reagan era was prelude to what is going on now, i.e., going backward while yelling whee look at me go. No doubt,
Reagan turned union members against their own unions. But, the genesis of demise probably lay with automation and the early offshoring
to Mexico. By Reagan, the car plants were losing jobs to Toyota and Honda and automation. By 1990, car plants that had previously
employed 5,000, now automated, produced more cars employing only 1200. At the time, much of the nation's wealth was still derived
from car production.
Skipping forward a bit, the democrats blew it for years with all their talk about the 'middle-class' without realizing it was
the 'disappearing middle-class'. They ignored the poor working-class vote and lost election after election.
I've come to not like the term labor, think it affords capital an undeserved status, though much diminished, I think thought
all workers would be better off in a union. Otherwise, as we are witnessing, there is no parity between workers and wealth; we
are in a race to the bottom with the wealth increasingly go to the top.
ken melvin , May 31, 2020 1:15 pm
Matthew – thanks for your comment
I think that we are into a transition (about 45 yrs into) as great as the industrial revolution. We, as probably those poor
souls of the 18th and 19th centuries did, are floundering, unable to come to terms with what is going on.
I also think that those such as the Kochs have a good grasp of what is going on and are moving to protect themselves and their
class.
ken melvin , May 31, 2020 1:21 pm
EMichael, thanks for the comment
Are you implying that the politicians are way behind the curve? If so, I think that you are right.
Let me share what I was thinking last night about thinking:
Descartes' problem was that he desperately wanted to make philosophy work within the framework of his religion, Catholicism.
Paul Krugman desperately wants to make economics all work within the Holy Duality of Capitalism and Free Markets. Even Joe Stiglitz
can't step out of this text. All things being possible, it is possible that either could come up with a solution to today's economic
problems that would fit within the Two; but the odds are not good. Better to think anew.
We see politicians try and try to find solutions for today's problems from within their own dogmas/ideologies. Even if they
can't, they persist, they still try to impose these dogmas/ideologies in the desperate hope they might work if only applied to
a greater degree. How else explain any belief that markets could anticipate and respond to pandemics? That markets could best
respond to housing demand?
Racism Is the Biggest Reason the U.S. Safety Net Is So Weak
Harvard economist Alberto Alesina, who died last week, found that ethnic divisions made the country less effective at providing
public goods.
7:50 AM · May 31, 2020
The Alesina/Glaeser/Sacerdote paper on why America doesn't have a European-style welfare state -- racism -- had a big impact
on my own thinking 2/
For a long time anyone who pointed out that the modern GOP is basically a party that serves plutocratic ends by weaponizing
white racism was treated as "shrill" and partisan. Can we now admit the obvious? 3/
Why Doesn't the United States Have a European-Style Welfare State?
By Alberto Alesina, Edward Glaeser and Bruce Sacerdote
Abstract
European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that
redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps
because of trade shocks), the social costs of taxation and the expected income mobility of the median voter. None of these factors
appear to explain the differences between the US and Europe. Instead, the differences appear to be the result of racial heterogeneity
in the US and American political institutions. Racial animosity in the US makes redistribution to the poor, who are disproportionately
black, unappealing to many voters. American political institutions limited the growth of a socialist party, and more generally
limited the political power of the poor.
rick shapiro , May 31, 2020 2:07 pm
This dynamic is not limited to low-skill jobs. I have seen it at work in electronics engineering. When I was a sprat, job shoppers
got an hourly wage nearly twice that of their company peers, because they had no benefits or long-term employment. Today, job
shoppers are actually paid less than company engineers; and the companies are outsourcing ever more of their staffing to the brokers.
Without labor market frictions, the iron law of wages drives wages to starvation levels. As sophisticated uberization software
eliminates the frictions that have protected middle class wages in the recent past, we will all need to enlist unionization and
government wage standards to protect us.
ken melvin , May 31, 2020 2:29 pm
Rick
The big engineering offices of the 70s were decimated and worse by the mid-90s; mostly by the advent of computers w/ software.
One engineer could now do the work of 10 and didn't need any draftsman.
rick shapiro , May 31, 2020 2:40 pm
I was speaking of engineers with equal skill in the same office. Many at GE Avionics were laid off, and came back as lower
paid contract employees.
Trump's threat
to deploy the military here is an excessive and dangerous one. Mark Perry reports on the reaction
from military officers to the president's threat:
Senior military officer on Trump statement: "So we're going to tell our soldiers that we're
redeploying them from the Middle East to the midwest? What do we think they're going to say,
'yeah, sure, no problem?' Guess again."
Earlier in the day yesterday, audio has leaked in which the Secretary of Defense
referred to U.S. cities as the "battlespace." Separately, Sen. Tom Cotton was
making vile remarks about using the military to give "no quarter" to looters. This is the
language of militarism.
It is a consequence of decades of endless war and the government's
tendency to rely on militarized options as their answer for every problem. Endless war has had a
deeply corrosive effect on this country's political system: presidential overreach, the
normalization of illegal uses of force, a lack of legal accountability for crimes committed in
the wars, and a lack of political accountability for the leaders that continue to wage pointless
and illegal wars. Now we see new abuses committed and encouraged by a lawless president, but this
time it is Americans that are on the receiving end. Trump hasn't ended any of the foreign wars he
inherited, and now it seems that he will use the military in an llegal mission here at home.
The military is the only American institution that young people still have any real degree of
faith in, it will be interesting to see the polls when this is all over with.
"... our culture so market-driven, everybody for sale, everything for sale, you can't deliver the kind of really real nourishment for soul, for meaning, for purpose. ..."
"... The system cannot reform itself. We've tried black faces in high places ..."
"... You've got a neoliberal wing of the Democratic party that is now in the driver's seat with the collapse of brother Bernie and they really don't know what to do because all they want to do is show more black faces -- show more black faces. ..."
"... So when you talk about the masses of black people, the precious poor and working-class black people, brown, red, yellow, whatever color, they're the ones left out and they feel so thoroughly powerless, helpless, hopeless, then you get rebellion. ..."
Dr. Cornel West said on Friday we are witnessing the failed social experiment that is
the United States of America in the protests and riots that have followed the death of George
Floyd at the hands of Minneapolis police. West told CNN host Anderson Cooper that what is going
on is rebellion to a failed capitalist economy that does not protect the people. West, a
professor, denounced the neoliberal wing of the Democratic party that is all about "black faces
in high places" but not actual change. The professor remarked even those black faces often lose
legitimacy because they ingriatiate themselves into the establishment neo-liberal Democratic
party.
"I think we are witnessing America as a failed social experiment," West said. "What I mean
by that is that the history of black people for over 200 and some years in America has been
looking at America's failure, its capitalist economy could not generate and deliver in such a
way people can live lives of decency. The nation-state, it's criminal justice system, it's
legal system could not generate protection of rights and liberties."
From commentary delivered on CNN Friday night:
DR. CORNEL WEST: And now our culture so market-driven, everybody for sale, everything for
sale, you can't deliver the kind of really real nourishment for soul, for meaning, for
purpose.
So when you get this perfect storm of all these multiple failures at these different
levels of the American empire, and Martin King already told us about that...
The system cannot reform itself. We've tried black faces in high places. Too often our
black politicians, professional class, middle class become too accommodated to the capitalist
economy, too accommodated to a militarized nation-state, too accommodated to the
market-driven culture of celebrities, status, power, fame, all that superficial stuff that
means so much to so many fellow citizens.
And what happens is we have a neofascist gangster in the White House who doesn't care for
the most part. You've got a neoliberal wing of the Democratic party that is now in the
driver's seat with the collapse of brother Bernie and they really don't know what to do
because all they want to do is show more black faces -- show more black faces.
But often
times those black faces are losing legitimacy too because the Black Lives Matter movement
emerged under a black president, a black attorney general, and a black Homeland Security
[Secretary] and they couldn't deliver.
So when you talk about the masses of black people, the
precious poor and working-class black people, brown, red, yellow, whatever color, they're the
ones left out and they feel so thoroughly powerless, helpless, hopeless, then you get
rebellion.
Organized crime in the USA is not a myth and its connections to law enforcement also is not a
myth. They are ideal provocateurs for riots. Also they want their piece of action too ;-)
There is increasing evidence that certain gangs and other nefarious outside agitators are
engaged in deliberate property damage and vandalism during the recent protests against police
brutality--demonstrating that they are trying to hijack these protests and are not sincerely
concerned about the issue of racism against African Americans/minorities in the US or police
repression.
I wonder if William Barr or the American Regime will now finally declare these groups as
"terrorists"?
Police at Protests All Over the Country Caught Destroying Property
It is my informal observation that riots tend to collapse from exhaustion after about three
days. That's not happening this time, as every new day sees more and more house arrest orders
(called "curfew", a nice antiseptic term) across the country.
Current events bring to mind the 1933 failed fascist coup d'etat exposed by General
Smedley "War is a Racket" Butler. Instead of organizing half a million war veterans by the
VFW, today's "Business
Plot" organizers would have at their disposal one million already trained and equipped
paramilitary police forces.
In such a scenario there is no reason for local cops to know who is pulling strings; all
they have to do is follow orders, which they are more than willing to do, especially with
commanders giving them football-style pep talks before going out to break heads.
It's well-documented that the spooks have been trying to get rid of Trump since the
election, first with "Russia-gate", then arresting and/or driving out all his trusted staff,
then the impeachment. Why should anyone think the spooks have given up? How many times did
they try to kill Castro?
If the idea that a spook-led coup d'etat is in progress really has merit (I have "medium
confidence"), it will be enforced by the police, not the Army or even National Guard units.
So far, Guard units have not fired on protesters and many are not armed. I strongly suspect
the army is not reliable, and
commanders know it :
In Denver, Guard troops are carrying nonlethal weapons, including batons, tasers, and
pepper spray. "They were fully embedded with Denver PD," said Air Force Maj. Gen. Michael
Loh, Colorado's adjutant general. "The Denver police chief Paul Pazen said if we have to
use deadly force and I want my police officers to do it , and I want you to be in
support."
National Guard are recruited with boatloads of TV ads all promoting how Guardsmen are used
to help their neighbors during natural disasters. Those ads never feature Guardsmen facing
down or shooting angry protesters, and Guardsmen want to believe they are there "to help".
The police, however, are under no such illusions and affirm their willingness to kill
civilians every time they strap on their side-arm.
If Guardsmen get itchy trigger fingers and shoot civilians without orders, well that just
happens sometimes, not a big deal. But if commanders give the order to shoot and they don't,
that is a huge crisis which I assume commanders would want to avoid.
During this attempt [to put Floyd in the patrolcar], at 20:19, Mr Chauvin pulled Mr Floyd
out of the passenger side, causing him to fall to the ground, the report said.
He lay there, face down, still in handcuffs.
This suggests he was pulled out of the car by Chauvin for the express purpose of
killing him. His cool demeanor is striking. He knows he is openly killing Floyd while being
filmed but remains confident he is protected.
Two goons who work at a fancy nightclub (aka Mob Headquarters) and one ends up dead.
Smells like a mob hit; ordered and paid for by who is the right question.
This report, combined with the fact that Derek Chauvin knew and worked with the victim,
makes this homicide premeditated or at the very least a 2nd degree murder.
The fact that the other officers did not intervene makes them complicit in the act and
should be brought up on manslaughter charges and accessory to commit murder.
Charging the other officers will help slightly in tamping down the riots, although it may
be too late. The wheels have been placed in motion and this is morphing into something bigger
than George Floyd.
First responders immediately examine the victim for any signs of life, and they come
prepared with equipment to resuscitate the victim if possible. Not these men.
They got out of the ambulance and moved in fast, picked up his body like it was a huge
sack of potatoes, and THREW him on to the gurney. Obviously, they knew that he was dead, knew
that he was supposed to be dead.
They were NOT first responders in any sense, but openly armed and uniformed policemen.
It's True how this
analysis sees and describes what's occurring within the Outlaw US Empire, more than
validating Cornel West's assessment, except it misses the major component--Class--while
seeing lizard's list:
"As the world watches the US being confronted with massive riots, looting, chaos and
heightened violence, US officials, instead of reflecting on the systematic problems in their
society that led to such a crisis, have returned to their old 'blame game' against
left-wingers, 'fake news' media and 'external forces....'
"[O]bservers see a weak, irresponsible and incompetent leadership navigating the country
into a completely opposite direction, with all-out efforts to deflect public attention from
its own failure.
"Mass protests erupted in a growing numbers of cities in the US over the weekend, and at
least 40 cities have imposed curfews, while the National Guard has been activated in 14
states and Washington DC, according to US media reports ... [P]rotests across the country
continued into a sixth straight night.
"More Americans have slammed the US president for inciting hatred and racism, and US
officials, who turn a blind eye to the deep-seated issues in American society, including
racial injustice, economic woes and the coronavirus pandemic, began shifting the blame to the
former US president, extremists, and China for inflaming the social unrests."
Blaming Chinese, Russians and/or Martians isn't going to help Trump. Without doing a
thing, Biden has risen to a lead of 8-10% in the most recent polling. Trumps many mistakes
have dug him a hole that now seems to be collapsing in upon him. He's cursed worse than Midas
as everything he attempts turns out a big negative and only worsens the situation.
For example if you take a marxian definition of l class, it means people who don't own the
means of production, that easily means the bottom 80% of the population. However a large
part of this group is usually considered middle class, and is not really seen as
oppressed.
I don't think this is right; unlike 'exploited', Marx doesn't use the word 'oppression' in
any technical or unusual way, just in it's usual sense.
So a prosperous middle class person in a liberal democracy is not oppressed. A Marxist
would merely point out that they would be in a more capitalist society; one without a
universal franchise that requires the rich to seek political allies.
people of the working class don't feel they are working class, but rather identify as
blue collars
If you look into the actual details of vote tallies; you find more or less the precise
opposite. There are a key block of people who, objectively speaking, earn most of their
income from stocks that they own, in the form of pension funds. Up until recently, this block
was the victim of false consciousness; they identified as something like 'blue collar', based
on the jobs they used to do, and the communities they they used to belong to. As of the last
few elections, political activity by the Republicans and Tories has managed to overcome that,
so they now vote based on their objective class interests. Those who rely on a small lump of
capital have mostly the same class interests as those in possession of more; fewer
environmental regulations, lower minimum wages, and so forth.
Meanwhile, most of the current working class don't get to vote, because they lack
citizenship in the countries in question.
@mark green It is interesting how both sides think they know the other side. Liberals
think that Deplorables are redneck Nascar people with zero education. Rightists think the
left are deluded commie pinkos, radical queers and pink pussy hatted idiots.
To help with your education I have protested the death of George Floyd in Cincinnati for
two days. The protests were mostly young persons and half were white. About two thousand were
in our park yesterday to hear speeches. The speeches were about systemic social change. An
end to vulture capitalism which has caused most of the problems associated with extreme
income inequity.
Also, an end to the endless insane wars fought for profit and American hegemony in places
we do not belong. No one is horrified at the violence, we are surprised it did not begin
sooner. Desperate people act in desperate ways. The system needs to change.
"... It's also true that the oligarchy will continue to preserve the system it's created in the U.S. through all available means, using its militarized police forces as its loyal street level enforcers. Change would happen very quickly if enough police turned and join with the "mobs". ..."
I think this relevant to how fractured the discourse is. it's a repost from my litter
watering hole.
I know it's going to be difficult to accept what I'm about to say because people get very
invested in their chosen narratives, but it's important that you at least be exposed to the
notion that it's all true.
It's true that people engaged in peaceful protests.
It's true that people engaged in lawless looting.
It's true that provocateurs have committed acts of vandalism and sometimes carry
umbrellas.
It's true that Antifa exists and that they don't advocate gently placing flowers in the
gaping hole of a long gun.
It's true that some very messed up militia minded people call themselves Boogaloo Bois, wear
Hawaiian shirts, and are showing up to add their brand of crazy to the mix.
It's true looters come in all shades and sizes.
It's true some desperate people are taking things they need.
It's true some opportunistic people are taking things they want.
It's true opportunistic government thugs suddenly shifted the Covid-19 rationale for using
contract tracing to a catch-them-rioters rationale for using contract tracing.
It's true the policy infrastructure for enacting martial law has been a long-term,
bi-partisan project.
It's true that now is the time to realize what's at stake, but instead of acting
collectively for our mutual benefit, the cognitive challenge of accepting that all these things
can be true at the same time will keep us tied to one of these things to the exclusion of all
the others.
It's hard work, I know. But I have faith in you.
Posted by b on June 1, 2020 at 16:08 UTC | Permalink
this analysis sees and
describes what's occurring within the Outlaw US Empire, more than validating Cornel West's assessment, except it misses
the major component--Class--while seeing lizard's list:
"As the world watches the US being confronted with massive
riots, looting, chaos and heightened violence, US officials, instead of reflecting on the systematic problems in their
society that led to such a crisis, have returned to their old 'blame game' against left-wingers, 'fake news' media and
'external forces....'
"[O]bservers see a weak, irresponsible and incompetent leadership navigating the country into a completely opposite
direction, with all-out efforts to deflect public attention from its own failure.
"Mass protests erupted in a growing numbers of cities in the US over the weekend, and at least 40 cities have imposed
curfews, while the National Guard has been activated in 14 states and Washington DC, according to US media reports ... [P]rotests
across the country continued into a sixth straight night.
"More Americans have slammed the US president for inciting hatred and racism, and US officials, who turn a blind eye
to the deep-seated issues in American society, including racial injustice, economic woes and the coronavirus pandemic,
began shifting the blame to the former US president, extremists, and China for inflaming the social unrests."
Blaming Chinese, Russians and/or Martians isn't going to help Trump. Without doing a thing, Biden has risen to a lead
of 8-10% in the most recent polling. Trumps many mistakes have dug him a hole that now seems to be collapsing in upon
him. He's cursed worse than Midas as everything he attempts turns out a big negative and only worsens the situation.
It's also true that the oligarchy will continue to preserve the system it's created in the U.S. through all
available means, using its militarized police forces as its loyal street level enforcers. Change would happen very
quickly if enough police turned and join with the "mobs". Otherwise any positive change in the prevailing structure
will be extremely incremental if at all, and will be resisted at every level until it collapses because there is nothing
left worth to exploit.
Imho the present protests, social 'unrest,' in the USA will just die out as usual, nothing will be accomplished -
what are the politcal demands? zero.. - on to the next chapter of misery and oppression.
Posted by: Noirette | Jun 1 2020 17:26 utc | 19
Indeed, and there was no other goal by stirring up these protest to the public murder of Floyd in plain daylight,
after decades of deideologization of the US masses by brainwashing through US education system, TV, Hollywood, and so
on.
Provocate the poor masses to find no way than to emotionally revolt through a brute action broadcasted to the four
corners of the US through the media, to then show the rightful protesters as disorganized anarchist riotters without any
vison or idea ( with unestimable help by white supremacists and cops infiltrated, and even by rich blonde boys stealing
surf boards as if there was no tomorrow...)so as to show the middle and upper classes that this will be the aspect of
the country in case socialist policies would be put in practice. This is to appeal once again, and possibly the last
one, to the greedy individualist allegevd "winner" to once more vote against its own interest, as after the elections
all what would not be looted by the poor would be looted by the state. Then it will come the gnashing of teeth and
regrets on not having suppoorted those poor people when they were being murdered in the streets.
But, may be, some would even be grateful of being quirurgically robed by the state ( thorugh their bank accounts and
propieties value going down the hole...) instead of by these obviously majority of needed people....needed at least of
respect....
"Antifa" only shows up and exists when it is needed, then magically disappears; same as Ali Queada and ISIS ...
This!
<> <> <> <> <>
Reposting my earlier comment on the Open Thread:
ZH reports that 6 people have died in the protests. Dozens of protesters and police have been injured. Tens of
millions of dollars in property damage, police overtime, and cost of the likely spread of coronavirus ('second wave' now
being blamed on the protesters).
All because the authorities will not appropriately charge the killers of George Floyd.
Instead, Trump and MSM turn the focus to "antifa". How convenient. MSM says nothing of the killing of 26-year old
Ahmaud Arbery in Georgia weeks before and the attempted cover-up of his killing.
How many more have to die before the authorities act appropriately? How much more destruction and silent spread of
coronavirus?
<> <> <> <> <>
The protesters say that a manslaughter charge against Chauvin is an injustice. Chauvin was a veteran officer who KNEW
WHAT HE WAS DOING when he remained on Floyd for more than 3 minutes after he had become non-responsive.
The protesters say that the other officers are accessories to murder because they did nothing to stop it.
Every reasonable person understands that the protesters have valid points. I would say that there's a consensus
that Chauvin should be charged with Second-degree murder and the other officers charged as accessories. But the
authorities drag their feet - while America burns.
a)refrain from looting and that specifically the the small properties is a stupidity that will backfire
quickly!
b) the demonstrations leaders must organize their own security
squads to prevent provocateurs from outside.
Fm these tasks the 1st one is rather difficult to reach, yes.The second one is much easier.
It's not a civil war until the *other* civilians start shooting at the rioters. At this point, it's just the usual police repression.
Now given that thousands of people who previously never owned a firearm have now acquired them - although it is unclear how
many of them will be concealed carriers, given the variance in state laws - it's only a matter of time before some people start
shooting. Like the Korean shop owners in LA notably did during the Rodney King riots IIRC.
But it won't be a civil war until a significant number of people on both sides are actually shooting.
There's a guy named Selco Begovic who survived the civil war in Bosnia. He writes articles for prepper Web sites and he has
book out. He has vividly
described conditions of life in a civil war. Most people in the US are not going to handle that sort of thing well. Try this one
as it pertains to b's post.
The true enemies of humanity are corporations, so the violence is not a "civil war", but revolt. Along those lines, it's not "looting"
but sabotage. And the "police" are not peace-keepers but militarized enforcers.
It's a complete waste of time engaging in electoral "politics." Politicians are corporate whores doing their master's bidding,
as are the "police."
Just finished listening to the latest interview
given by Michael Hudson , "Defining a Tyrant," whose focus is on the necessity of applying debt forgiveness to those residing
within the Outlaw US Empire as the economic affects of COVID-19 will be much worse than we've already seen. Those who want to
get to the current moment can begin listening at the 40 minute mark (yes, it's just audio). You'll need to note that the unemployment
numbers as I've been writing for awhile now are greatly understated, although the host Gary Null does allude to that reality as
NYC itself is emptying out--imagine Wall Street sitting in the middle of a ghost metropolis. As you'll learn, Trump's MAGA Mantra
is 100% hollow without enacting a wide ranging debt write-off--even if factories could be put back into business, the Outlaw US
Empire's economy would still remain very uncompetitive because of the issue of debt service and privatized health care--issues
I've written about before.
And so the main topic: Civil War. Or, is it? Reality demands it be named Class War, for that's what it is in reality. Hudson
maps out how its done and by whom while naming the abettors. The Popular Forces number 280 million, not including those too young/old/infirm
to bear arms. The Forces of Reaction minus the paid forces of coercion number well under 100,000. Even adding in police and military,
it's still 280 million to perhaps 10 million. And even if only half of the 280 million stand up, that's 140 million. The rallying
cry ought to be It's better to die standing up for your rights versus groveling on your knees. Too bad all of the above's too
large for one Tweet.
The way they provoked the violence on smashing shop windows with forehammer is exactly what was witnessed inParis when apparent
"black block" types did the same and then got back in their policevan.
I note that in France Riot police is clad in robocop armour and that this armour is a weapon in itself,it deshumanizes the man
inside to himself,and to others.A strike of his arm is much more powerful than if he were dressed as your american cop on patrol,probably
they give them steroid or something to be able to move rapidly with all the weight.They must feel like the Hulk!
Now it would be a sign of peaceful government if just any political party would make a ban on those outfits.
So the medical examiner concluded that there was no evidence of choking or suffocation, and instead was the result of his "restraint"
exacerbating underlying conditions, and suggesting there was the possibility of intoxication or drugs, which is the basis for
the pre-determination that Chauvin will only be charged with 3rd degree murder, which of course they'll try to whittle down to
manslaughter (the coincidental charge.)
Let me see if I've got this straight: a man that is being restrained by the neck, who eventually dies from no other action,
who repeatedly pleads that "I can't breath," who onlookers see and record that the man can not in fact breath, and the medical
examiner finds no evidence of choking or strangulation.
Further, Officer Chauvin, in close physical contact with the eventual corpse of his victim, must surely have felt the life
ebbing from George Floyd. No way no how this mother fucker gets charged with anything other than 1st degree murder. His accomplices
get charged with accessory to 1st degree murder.
"War is a Racket" -Smedley Butler 1933
"Beyond Vietnam - Time to Break the Silence" -MLK 1967
"Art Truth and Politics" -Harold Pinter 2005
What has changed in 100 yrs of uSSa Empire? Foreign policy? Domestic policy?
Economic policy? All have become worse.
The u$$a Regime lies, cheats, steals, rapes, murders, tortures, overthrows, bombs,
invades, destroys, and loots with impunity Global wide.
How a citizen of this Rogue nation can feel good about that is beyond hypocrisy.
This Regime and the humans behind this sickening system must be replaced.
The Military Surveilance Police state must end. The Humans behind this system must be replaced
by any means necessary. Both the safety of the world and domestically rely on their removal.
When finished "Entertaining Ourselves to Death" and coming to terms with the truly Evil nature of the human beings operating
and supporting this system- perhaps you will becomea full human being. Get Up Stand Up.
The difference between ignorance and delusions are substantial.
Ignorance being the lack of knowledge. Delusion being the presence of false
knowledge. Where do you stand?
I don't need protection from the police.
But We ALL need protection FROM the police state.
Will you fight to defend yourself, your family, your neighbor or fellow human being
against a cruel vile corrupt system? Selfishness and greed are no excuse for complacency.
What is worth defending- your property or your virtues?
I have long been disgusted by the u$$a regimes domestic and foreign policies. Which means I have long been disgusted by my
fellow citizens (human beings) which support and operate this vile system.
Revolution-
Complacency and passive complicit citizens Or values, humaneness and justice?
Where do you stand? When do you stand for a meaningful life of society?
The white working and lower middle classes will not support violent rioting by blacks over a black issue. This is not a way to
start a revolution.
What's more, the latest reporting I read in the Washington Post is that Floyd initially resisted arrest. The early reporting
that he did not resist arrest was apparently incorrect.
Moreover, the medical evidence suggests that he died not from asphyxiation or a broken neck, but because of comorbidities.
Floyd had a lengthy criminal record.
If you want a revolution in the U.S., wait a month or two until there are mass evictions.
This is a warning to anybody who would dare to revolt against the coming misery conditions of life while the oligarchs continue
enriching themselves and looting every penny available.
This is a secondary gain from the pandemic, as we were accustomed to multiple declared state of alarm throughout the world,
they thinks that going a step further would not cause any shock....
There have been equally violent revolts in France and Chile continuously during the past year, and in France again in the banlieus,
and then curfew was not declared...
This is the land of the free....There you have your fascist state turning on yourselves...
When they came for the Venezuelans, seized their assets and embassies, I did nothing; when they came for the Iranians and murdered
Soleimani, I said nothing; when they came for the communists in the Odessa House of Unions, I did not move a finger; when they
slaughtered people at the four cardinal points of the world, I did continue living my "American Dream" as if the thing would not
go with me...until I did awaken to find myself in the same nightmare....
I've suggested in the past that civil war was unlikely in the US because that would requires a significant percentage of the electorate
to actually take sides and shoot someone - and most of the population is so anti-gun these days that such a scenario was unlikely,
especially over political issues that aren't usually considered as *directly* adversely affecting most of the population, at least
in their minds. It would also require some direct organization on both sides and I don't see anyone capable of that on the national
scene.
What I can easily see happening, however, is the sort of multi-city, large-scale rioting that occurred in the Sixties and in
other parts of the world, leading to a declaration of martial law in at least some, possibly many, larger cities, if not nation-wide
(a lot of rural areas would likely not be affected.) Economic issues and issues of social repression are usually the causes of
large-scale violence historically in most countries. Most "political" issues usually boil down to either ethnic or economic or
repression issues.
The US doesn't have really that much ethnic issues, except in the Southwest over Latino immigration. The US has racial, economic
and repression issues, however. Most of the time they just simmer, with local limited outbreaks of violence. But in cases of blatant
repression, or under severe economic pressure, they can explode into wider-scale violence.
And we've got both on the horizon. The impact of the pandemic (and the government's clueless response, thanks to Trump and
previous Presidents) on the economy is likely to produce extreme economic pressure, especially on the middle class and the poor.
Adding the extreme militarization of the US police over the last several decades, and this is a recipe for large-scale violence
that continues for more than a few days or a week. Once police over-reaction and the appearance of the National Guard to control
rioting results in the sort of deaths like in the well-known Kent State incident, then like in Ukraine we could start to see cops
and National Guard fatalities from snipers. Next we could see things like the 1985 Philadelphia police bombing of the MOVE headquarters
and the use of armed drones (Connecticut has a law banning armed drones - but not for police.) The next step beyond that is curfew,
and the next step beyond that is martial law.
The next step beyond that is not civil war - it's explicit fascism. And that ends in revolution - which then usually recycles
into either more fascism or "modified: fascism (see France in the 1800's.)
Bottom line: It's not going to get better. One of the many things preppers have been warning against is national repression.
They warned against natural disasters like hurricanes and no one listened until Katrina. They warned against pandemics and no
one listened - until today. They've been warning against national repression - like the Selco article I linked to. Better listen
this time.
Bolsheviks put ideology above and before the people needs; Neoliberals put capital above
people. Neoliberals are the next-worst thing after Boslheviks (although nobody can match
Bolsheviks as for excesses including Stalin terror) .
That's why both now in the USA and in
the USSR before the dissolution we have a lot of "death of despair" That said, why would
anybody trust neolibral pols ?
Coronavirus had shown Brezhnev socialism and the US neoliberalism were never as far apart as
people imagined. Two sides of a coin. A theological dispute.
Money quote: ""Public-service workers are now subjected to a panoptical regime of monitoring
and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd." --
that's definition of a serf -- a neoliberal serf
I feel a lot of people just use the term neoliberalism as a term of a specific abuse of
labor via debt slavery. .
1. Hayek's book 'The Road to Serfdom' uses an erroneous metaphor. He argues that if we
allow gov regulation, services and spending to continue then we will end up serfs. However,
serfs are basically the indentured or slave labourers of private citizens and landowners not
of the state. Only in a system of private capital can there be serfs. Neo liberalism creates
serfs not a public system.
2. According to Hayek all regulation on business should be eliminated and only labour
should be regulated to make it cheap and contain it so that private investors can have their
returns guaranteed. Hence the purpose of the state is to pass laws to suppress workers.
These two things illustrate neo-liberalism. Deception and repression of labour.
As a matter of semantics, neo-liberalism delivered on the promise of freedom...for
capitalists to be free of ethical accountability, social responsibility, and government
regulation and taxes. And people can't understand why i'm a socialist.
From comments: "
neoliberalism to be a techno-economic order of control, requiring a state apparatus to enforce
wholly artificial directives. Also, the work of recent critics of data markets such as Shoshana
Zuboff has shown capitalism to be evolving into a totalitarian system of control through
cybernetic data aggregation."
"... By rolling back the state, neoliberalism was supposed to have allowed autonomy and
creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more
oppressive than the system it replaced. ..."
"... Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and
micromanaged. Organisations that depend on a cooperative ethic – such as schools and
hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The
introduction of private capital into public services – that would herald a glorious new age
of choice and openness – is brutally enforced. The doctrine promises diversity and freedom
but demands conformity and silence. ..."
"... Their problem is that neoliberal theology, as well as seeking to roll back the state,
insists that collective bargaining and other forms of worker power be eliminated (in the name of
freedom, of course). So the marketisation and semi-privatisation of public services became not so
much a means of pursuing efficiency as an instrument of control. ..."
"... Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The
bureaucratic quantification of public administration goes far beyond an attempt at discerning
efficacy. It has become an end in itself. ..."
Notable quotes:
"... By rolling back the state, neoliberalism was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more oppressive than the system it replaced. ..."
"... Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend on a cooperative ethic – such as schools and hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The introduction of private capital into public services – that would herald a glorious new age of choice and openness – is brutally enforced. The doctrine promises diversity and freedom but demands conformity and silence. ..."
"... Their problem is that neoliberal theology, as well as seeking to roll back the state, insists that collective bargaining and other forms of worker power be eliminated (in the name of freedom, of course). So the marketisation and semi-privatisation of public services became not so much a means of pursuing efficiency as an instrument of control. ..."
"... Public-service workers are now subjected to a panoptical regime of monitoring and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The bureaucratic quantification of public administration goes far beyond an attempt at discerning efficacy. It has become an end in itself. ..."
"... The other point to be made is that the return of fundamentalist nationalism is arguably a radicalized form of neoliberalism. ..."
"... Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian orientations, previously effaced beneath discourses of egalitarian free-enterprise, become overt. ..."
"... The market is no longer an enabler of private enterprise, but something more like a medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs collectivise into a 'people' serving a market which has become synonymous with nationhood. ..."
Thousands of people march through London to protest against underfunding and privatisation
of the NHS. Photograph: Wiktor Szymanowicz/Barcroft Images M y life was saved last year by the
Churchill Hospital in Oxford, through a skilful procedure
to remove a cancer from my body . Now I will need another operation, to remove my jaw from
the floor. I've just learned what was happening at the hospital while I was being treated. On
the surface, it ran smoothly. Underneath, unknown to me, was fury and tumult. Many of the staff
had objected to a decision by the National Health Service
to privatise the hospital's cancer scanning . They complained that the scanners the private
company was offering were less sensitive than the hospital's own machines. Privatisation, they
said, would put patients at risk. In response,
as the Guardian revealed last week , NHS England threatened to sue the hospital for libel
if its staff continued to criticise the decision.
The dominant system of political thought in this country, which produced both the creeping
privatisation of public health services and this astonishing attempt to stifle free speech,
promised to save us from dehumanising bureaucracy. By rolling back the state, neoliberalism
was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a
semi-privatised authoritarianism more oppressive than the system it replaced.
Workers find themselves enmeshed in a
Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend
on a cooperative ethic – such as schools and hospitals – are stripped down,
hectored and forced to conform to suffocating diktats. The introduction of private capital into
public services – that would herald a glorious new age of choice and openness – is
brutally enforced. The doctrine promises diversity and freedom but demands conformity and
silence.
Much of the theory behind these transformations arises from the work of Ludwig von Mises. In
his book Bureaucracy , published in 1944, he
argued that there could be no accommodation between capitalism and socialism. The creation of
the National Health Service in the UK, the New Deal in the US and other experiments in social
democracy would lead inexorably to the bureaucratic totalitarianism of the Soviet Union and
Nazi Germany.
He recognised that some state bureaucracy was inevitable; there were certain functions that
could not be discharged without it. But unless the role of the state is minimised –
confined to defence, security, taxation, customs and not much else – workers would be
reduced to cogs "in a vast bureaucratic machine", deprived of initiative and free will.
By contrast, those who labour within an "unhampered capitalist system" are "free men", whose
liberty is guaranteed by "an economic democracy in which every penny gives a right to vote". He
forgot to add that some people, in his capitalist utopia, have more votes than others. And
those votes become a source of power.
His ideas, alongside the writings of
Friedrich Hayek , Milton Friedman and other neoliberal thinkers, have been applied in this
country by Margaret Thatcher, David Cameron, Theresa May and, to an alarming extent, Tony
Blair. All of those have attempted to privatise or marketise public services in the name of
freedom and efficiency, but they keep hitting the same snag: democracy. People want essential
services to remain public, and they are right to do so.
If you hand public services to private companies, either you create a private monopoly,
which can use its dominance to extract wealth and shape the system to serve its own needs
– or you introduce competition, creating an incoherent, fragmented service characterised
by the institutional failure you can see every day on our railways. We're not idiots, even if
we are treated as such. We know what the profit motive does to public services.
So successive governments decided that if they could not privatise our core services
outright, they would subject them to "market discipline". Von Mises repeatedly warned against
this approach. "No reform could transform a public office into a sort of private enterprise,"
he cautioned. The value of public administration "cannot be expressed in terms of money".
"Government efficiency and industrial efficiency are entirely different things."
"Intellectual work cannot be measured and valued by mechanical devices." "You cannot
'measure' a doctor according to the time he employs in examining one case." They ignored his
warnings.
Their problem is that neoliberal theology, as well as seeking to roll back the state,
insists that collective bargaining and other forms of worker power be eliminated (in the name
of freedom, of course). So the marketisation and semi-privatisation of public services became
not so much a means of pursuing efficiency as an instrument of control.
Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The
bureaucratic quantification of public administration goes far beyond an attempt at discerning
efficacy. It has become an end in itself.
Its perversities afflict all public services. Schools teach to the test , depriving
children of a rounded and useful education. Hospitals manipulate waiting times, shuffling
patients from one list to another. Police forces ignore some crimes, reclassify others, and
persuade suspects to admit to extra offences to improve their statistics . Universities urge their
researchers to
write quick and superficial papers , instead of deep monographs, to maximise their scores
under the research excellence framework.
As a result, public services become highly inefficient for an obvious reason: the
destruction of staff morale. Skilled people, including surgeons whose training costs hundreds
of thousands of pounds, resign or retire early because of the stress and misery the system
causes. The leakage of talent is a far greater waste than any inefficiencies this quantomania
claims to address.
New extremes in the surveillance and control of workers are not, of course, confined to the
public sector. Amazon has patented
a wristband that can track workers' movements and detect the slightest deviation from
protocol. Technologies are used to monitor peoples' keystrokes, language, moods and tone of
voice. Some companies have begun to experiment with the
micro-chipping of their staff . As the philosopher Byung-Chul
Han points out , neoliberal work practices, epitomised by the gig economy, that
reclassifies workers as independent contractors, internalise exploitation. "Everyone is a
self-exploiting worker in their own enterprise."
The freedom we were promised turns out to be
freedom for capital , gained at the expense of human liberty. The system neoliberalism has
created is a bureaucracy that tends towards absolutism, produced in the public services by
managers mimicking corporate executives, imposing inappropriate and self-defeating efficiency
measures, and in the private sector by subjection to faceless technologies that can brook no
argument or complaint.
Attempts to resist are met by ever more extreme methods, such as the threatened lawsuit at
the Churchill Hospital. Such instruments of control crush autonomy and creativity. It is true
that the Soviet bureaucracy von Mises rightly denounced reduced its workers to subjugated
drones. But the system his disciples have created is heading the same way.
The other point to be made is that the return of fundamentalist nationalism is arguably a
radicalized form of neoliberalism. If 'free markets' of enterprising individuals have
been tested to destruction, then capitalism is unable to articulate an ideology with which to
legitimise itself.
Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist
ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian
orientations, previously effaced beneath discourses of egalitarian free-enterprise, become
overt.
The market is no longer an enabler of private enterprise, but something more like a
medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs
collectivise into a 'people' serving a market which has become synonymous with
nationhood.
A corporate state emerges, free of the regulatory fetters of democracy. The final
restriction on the market - democracy itself - is removed. There then is no separate market
and state, just a totalitarian market state.
This is the best piece of writing on neoliberalism I have ever seen. Look, 'what is in
general good and probably most importantly what is in the future good'. Why are we
collectively not viewing everything that way? Surely those thoughts should drive us all?
Pinkie123: So good to read your understandings of neoliberalism. The political project is the
imposition of the all seeing all knowing 'market' on all aspects of human life. This version
of the market is an 'information processor'. Speaking of the different idea of the
laissez-faire version of market/non market areas and the function of the night watchman state
are you aware there are different neoliberalisms? The EU for example runs on the version
called 'ordoliberalism'. I understand that this still sees some areas of society as separate
from 'the market'?
ADamnSmith: Philip Mirowski has discussed this 'under the radar' aspect of neoliberalism. How
to impose 'the market' on human affairs - best not to be to explicit about what you are
doing. Only recently has some knowledge about the actual neoliberal project been appearing.
Most people think of neoliberalism as 'making the rich richer' - just a ramped up version of
capitalism. That's how the left has thought of it and they have been ineffective in stopping
its implementation.
Finally. A writer who can talk about neoliberalism as NOT being a retro version of classical
laissez faire liberalism. It is about imposing "The Market" as the sole arbiter of Truth on
us all.
Only the 'Market' knows what is true in life - no need for 'democracy' or 'education'.
Neoliberals believe - unlike classical liberals with their view of people as rational
individuals acting in their own self-interest - people are inherently 'unreliable', stupid.
Only entrepreneurs - those close to the market - can know 'the truth' about anything. To
succeed we all need to take our cues in life from what the market tells us. Neoliberalism is
not about a 'small state'. The state is repurposed to impose the 'all knowing' market on
everyone and everything. That is neoliberalism's political project. It is ultimately not
about 'economics'.
The left have been entirely wrong to believe that neoliberalism is a mobilisation of
anarchic, 'free' markets. It never was so. Only a few more acute thinkers on the left
(Jacques Ranciere, Foucault, Deleuze and, more recently, Mark Fisher, Wendy Brown, Will
Davies and David Graeber) have understood neoliberalism to be a techno-economic order of
control, requiring a state apparatus to enforce wholly artificial directives. Also, the work
of recent critics of data markets such as Shoshana Zuboff has shown capitalism to be evolving
into a totalitarian system of control through cybernetic data aggregation.
Only in theory is neoliberalism a form of laissez-faire. Neoliberalism is not a case of the
state saying, as it were: 'OK everyone, we'll impose some very broad legal parameters, so
we'll make sure the police will turn up if someone breaks into your house; but otherwise
we'll hang back and let you do what you want'. Hayek is perfectly clear that a strong state
is required to force people to act according to market logic. If left to their own devices,
they might collectivise, think up dangerous utopian ideologies, and the next thing you know
there would be socialism. This the paradox of neoliberalism as an intellectual critique of
government: a socialist state can only be prohibited with an equally strong state. That is,
neoliberals are not opposed to a state as such, but to a specifically centrally-planned state
based on principles of social justice - a state which, to Hayek's mind, could only end in t
totalitarianism. Because concepts of social justice are expressed in language, neoliberals
are suspicious of linguistic concepts, regarding them as politically dangerous. Their
preference has always been for numbers. Hence, market bureaucracy aims for the quantification
of all values - translating the entirety of social reality into metrics, data, objectively
measurable price signals. Numbers are safe. The laws of numbers never change. Numbers do not
lead to revolutions. Hence, all the audit, performance review and tick-boxing that has been
enforced into public institutions serves to render them forever subservient to numerical
(market) logic. However, because social institutions are not measurable, attempts to make
them so become increasingly mystical and absurd. Administrators manage data that has no
relation to reality. Quantitatively unmeasurable things - like happiness or success - are
measured, with absurd results.
It should be understood (and I speak above all as a critic of neoliberalism) that
neoliberal ideology is not merely a system of class power, but an entire metaphysic, a way of
understanding the world that has an emotional hold over people. For any ideology to
universalize itself, it must be based on some very powerful ideas. Hayek and Von Mises were
Jewish fugitives of Nazism, living through the worst horrors of twentieth-century
totalitarianism. There are passages of Hayek's that describe a world operating according to
the rules of a benign abstract system that make it sound rather lovely. To understand
neoliberalism, we must see that it has an appeal.
However, there is no perfect order of price signals. People do not simply act according to
economic self-interest. Therefore, neoliberalism is a utopian political project like any
other, requiring the brute power of the state to enforce ideological tenets. With tragic
irony, the neoliberal order eventually becomes not dissimilar to the totalitarian regimes
that Hayek railed against.
Nationalised rail in the UK was under-funded and 'set up to fail' in its latter phase to make
privatisation seem like an attractive prospect. I have travelled by train under both
nationalisation and privatisation and the latter has been an unmitigated disaster in my
experience. Under privatisation, public services are run for the benefit of shareholders and
CEO's, rather than customers and citizens and under the opaque shroud of undemocratic
'commercial confidentiality'.
What has been very noticeable about the development of bureaucracy in the public and private
spheres over the last 40 years (since Thatcher govt of 79) has been the way systems are
designed now to place responsibility and culpability on the workers delivering the services -
Teachers, Nurses, social workers, etc. While those making the policies, passing the laws,
overseeing the regulations- viz. the people 'at the top', now no longer take the rap when
something goes wrong- they may be the Captain of their particular ship, but the
responsibility now rests with the man sweeping the decks. Instead they are covered by tying
up in knots those teachers etc. having to fill in endless check lists and reports, which have
as much use as clicking 'yes' one has understood those long legal terms provided by software
companies.... yet are legally binding. So how the hell do we get out of this mess? By us as
individuals uniting through unions or whatever and saying NO. No to your dumb educational
directives, No to your cruel welfare policies, No to your stupid NHS mismanagement.... there
would be a lot of No's but eventually we could say collectively 'Yes I did the right thing'.
'The left wing dialogue about neoliberalism used to be that it was the Wild West and that
anything goes. Now apparently it's a machine of mass control.'
It is the Wild West and anything goes for the corporate entities, and a machine of control
of the masses. Hence the wish of neoliberals to remove legislation that protects workers and
consumers.
"... After claiming that "economists have argued for centuries that trade is good for the economy as a whole", Goldberg has also noted that "trade generates winners and losers", with many losing out, and urges acknowledging "the evidence rather than trying to discredit it, as some do." Following Samuelson and others, she recommends compensating those negatively effected by trade liberalization, claiming "sufficient gains generated by open trade that the winners can compensate the losers and still be better off" without indicating how this is to be done fairly. ..."
"... "Free" trade means removing regulations and tariffs. As Michael Hudson reminds us, in Classical economics, it used to mean free of the unproductive burdens of the rentiers. ..."
"... There's a growing realisation on our continent that outsiders aren't going to lead us to the promised land. ..."
"... This redistribution never happens, the rich get richer in a role reversal of "I'll gladly pay you Tuesday for a hamburger today". Any attempt to have the rich share the hamburger is greeted with a "not now!" and a assurance that if the rich stop continuously getting richer at this particular point in time then everything will collapse. ..."
"... The best understanding of what is going on in Africa I got from Jared Diamond – book, "Collapse: How Societies Choose to Fail or Succeed". And for background – "Guns, Germs, and Steel". Global climate heating is going to destroy Africa, already is. The usual story, no water, no forests, too much heat and humidity. It's a terrible reckoning. And largely not of their making. ..."
By Jomo Kwame Sundaram, a former economics professor, who was Assistant Director-General for
Economic and Social Development, Food and Agriculture Organization, and who received the Wassily Leontief Prize
for Advancing the Frontiers of Economic Thought in 2007. Originally published by
Inter Press Service
Economic growth is supposed to be the tide that lifts all boats.
According to the conventional wisdom until recently, growth in China, India and East Asian countries took off
thanks to opening up to international trade and investment.
Such growth is said to have greatly reduced poverty despite growing inequality in both sub-continental
economies and many other countries. Other developing countries have been urged to do the same, i.e., liberalize
trade and attract foreign investments.
Doha Round 'Dead in Water'
However, multilateral trade negotiations under World Trade Organization (WTO) auspices have gone nowhere
since the late 1990s, even with the so-called Doha Development Round begun in 2001 as developing countries
rallied to support the US after 9/11.
After the North continued to push their interests despite their ostensible commitment to a developmental
outcome, the Obama administration was never interested in completing the Round, and undermined the WTO's
functioning, e.g., its dispute settlement arrangements, even before Trump was elected.
To be sure, the
Doha
Round proposals were hardly 'developmental'
by any standards, with most developing countries barely
benefitting, if not actually worse off following the measures envisaged, even according to World Bank and other
studies.
GVC miracle?
According to the World Bank's annual flagship
World Development Report (WDR) 2020 on Trading for
Development in the Age of Global Value Chains
, GVCs have been mainly responsible for the growth of
international trade for two decades from the 1990s.
GVCs now account for almost half of all cross-border commerce due to 'multiple counting', as products cross
more borders than ever. Firms' creative book-keeping may also overstate actual value added in some tax
jurisdictions to minimize overall tax liability.
WDR 2020
claims that GVCs have thus accelerated economic development and even convergence between
North and South as fast-growing poor countries have grown more rapidly, closing the economic gap with rich
countries.
WDR 2020
presumes trends that no longer exist. Trade expansion has been sluggish for more than a
decade, at least since the 2008 global financial crisis when the G20 of the world's largest economies and
others adopted protective measures in response.
GVC growth has slowed since, as economies of the North insisted on trade liberalization for the South, while
abandoning their own earlier commitments as the varied consequences of economic globalization fostered
reactionary jingoist populist backlashes.
Nonetheless,
WDR 2020
urges developing countries to bank on GVCs for growth and better jobs.
Success of this strategy depends crucially on developed countries encouraging 'offshoring', a policy hardly
evident for well over a decade!
As the last
World
Bank chief economist
, albeit for barely 15 months, Yale Professor Pinelopi Koujianou Goldberg recently
agreed
,
"the world is retreating from globalization". "Protectionism is on the rise -- industrialized countries are
less open to imports from developing countries. In addition, there is by now a lot of competition".
The Covid-19 crisis has further encouraged 'on-shoring' and 'chain shortening', especially for food, medical
products and energy. Although the Japanese and other governments have announced such policies, ostensibly for
'national security' and other such reasons, Goldberg has nonetheless
reiterated
the case for GVCs in Covid-19's wake
.
Trade Does Not Lift All Boats
After claiming that "economists have argued for centuries that trade is good for the economy as a whole",
Goldberg has also
noted
that
"trade generates winners and losers", with many losing out, and urges acknowledging "the evidence rather than
trying to discredit it, as some do."
Following Samuelson and others, she recommends compensating those negatively effected by trade
liberalization, claiming "sufficient gains generated by open trade that the winners can compensate the losers
and still be better off" without indicating how this is to be done fairly.
Compensation and redistribution require transfers which are typically difficult to negotiate and deliver at
low cost. Tellingly, like others, she makes no mention of international transfers, especially for fairly
redistributing the unequal gains from trade among trading partners.
Interestingly, she also observes, "There are plenty of examples, especially in African countries, where
wealth is concentrated in the hands of a few even when the tide rises, only very few boats rise. Growth
doesn't trickle down and doesn't improve the lot of the poor."
Unlikely Pan-Africanist
After decades of World Bank promotion of the 'East Asian miracle' for emulation by other developing
countries, especially in Africa, Greek-born American Goldberg insists that what worked for growth and poverty
reduction in China will not work in Africa today.
Echoing long time Bank critics, she argues, "If trade with rich countries is no longer the engine of growth,
it will be more important than ever to rely on domestic resources to generate growth that does trickle down and
translates to poverty reduction."
Instead, as if supporting some contemporary pan-Africanists, she argues, "Africa needs to rely on itself
more than ever. The idea that export-led industrialization as it happened in China or East Asia is going to
lead growth in Africa becomes less and less plausible".
She argues that "the African market is a very large market with incredible potential. It has not been
developed yet. So, regional integration might be one path forward. Rather than opting for global integration,
which may be very hard to achieve these days when countries are retreating from multilateralism, it might be
more feasible to push for regional trade agreements and create bigger regional markets for countries' goods and
services".
Acknowledging "We are still a very long way from there because most countries are averse to this idea -- they
see their neighbors as competitors rather than countries they can cooperate with", not seeming to recognize the
historical role of the Bank and mainstream trade economists in promoting the 'free trade illusion' and
discrediting pan-Africanism.
hear him, and hear him
Econospeak at its best. Filled with cliches and "on the one hand(s)." This articles perfectly describes
why social distancing can ultimately be a boon to mankind. This fellow Sundaram can self isolate at home
and still get a paycheck. He can begin puttering about in his garden and start growing his own food.
Eventually, he will find this activity to be far more rewarding than cogitating on the various cost and
benefits of the international value chains, and will be spending more and more time in his garden. UBI
will kick in. He will decide to disengage from "globalization" and being a public nuisance and adopt this
new, socially beneficial lifestyle permanently. By doing "piecework at home" he will add to real gross
domestic product, and he, the economy and the rest of the planet will be immeasurably improved.
Good analysis. But part of my confusion with this article started with the headline: "Covid-19 Straw
Breaks Free Trade Camel's Back"
What free trade? Nothing in the article discusses free trade and I doubt that there has ever been free
trade for a very long time. Is this more Econospeak?
I do agree with the author that the way trading is done now, however he defines it, has not risen all
boats.
Regarding the existence of "Free Trade"
I watched this in real time when Nafta passed(i was agin it, and voted for Perot accordingly, both times)
I knew a middle class mexican american guy father of a friend of mine. His business, pre-Nafta, was going
to his extended familia's ranch/farm(100 acres) in Tamaulipas, and returning with fruits and veggies and
vanilla and a whole bunch of "junk" like that metal yard art and terra cotta birdbaths and such.
had a dually pickup and a 20 foot trailer.
Post Nafta, this was suddenly illegal he wasn't part of the Club, and went to work as a cook along side
me and his son.
since that time, I've heard essentially the same story from numerous mexican american folks who used to
do similar stuff.
nafta killed that small time cross border trade and the only "Freedom" involved was for the
Maquiladora-owners, US Welfare Corn Corporations and the Cartels.
anecdata, of course, but still
if "they" were really for "free trade", they'd allow me to legally sell a frelling egg or tomato or grow
some weed, for that matter(high demand, low quality unstable supply).
I voted for ross perot too. I even went across the street and talked to my neighbors – the last
time I did that – as they always say, it's like staring into the eyes of a chicken – oh so "liberal"
at the time – To them Ross Perot was just an insufferable hick. But I loved the guy. And he was right.
I think he lived in the same neighborhood as little George in Dallas – but Ross didn't want us to
spread our resources too thin whereas little George saw MidEast oil as our best security. So now that
that has blown up, it's regionalism v. globalism. It's a brake on turbo trade. It's not a fix. We
don't want to be lulled into thinking we've achieved something like a trade balance and an
environmental balance – that will take a century – and only if we stop fibbing to ourselves.
I worked for Ross, for a while post GM (1987). I liked him very much, although we fought quite a
bit. Mostly, I agreed with his public policy outlook, when I didn't and it came up I told him. He
didn't surround himself with the wights that the Orange Menace does. Striking -he was very loyal to
people in his orbit. NAFTA had protections for labor, unions, & the environment they just never
were enforced. There must be some 'law' that says anything neoliberal turns into a racket over
time, so it was with NAFTA.
The NAFTA protections for workers were just hand waves. Lance Compa, who is at Cornell, ran
the US office trying to get the labor provisions (weak as they were) enforced. As I recall, they
were never able to bring even a single case forward.
"Free" trade means removing regulations and tariffs. As Michael Hudson reminds us, in Classical
economics, it used to mean free of the unproductive burdens of the rentiers.
As for NAFTA, one might figure shipping a bunch of subsidized Iowa corn down to Mexico would impair
the income of Mexican farmers.. The NAFTA treaty compensates the big ones.
Corn is only arguably the most important food crop in the world. The little (uncompensated by
NAFTA) Mexican farmers were only keeping the disease resistance and diversity of the corn genome alive
with the varieties they grew .But they weren't making any money for Monsanto So they were hung out to
dry and migration to "Gringolandia" increased dramatically not all of it "legal."
In the wake of NAFTA, not only did Mexico experience capital flight (remember the Clinton
administration's $20 billion bank bailout?), Mexico's real median income declined 34%. (Source: Ravi
Batra's
Greenspan's Fraud
).
One has to go back to the Great Depression to find that kind of decline in the U.S. Of course that
provoked no great migration Oh wait! The Okies!
Imagine the Okies exiting the dust bowl to go to California where they would be caged, separated
from their families, and ultimately shipped back to Oklahoma, where they would either be very
miserable or even starve. That's what we've been doing to the Mexican refugees U.S. actions
created never mind the fact that U.S. military and political attacks on its southern neighbors have
been going on for literally centuries. (Between 1798 and 1994, the U.S. is responsible for 41 changes
of government south of its borders).
Incidentally, the Harvard-educated neoliberal, Carlos Salinas Gotari, the Mexican president who
signed NAFTA, was so despised he had to spend at least the initial years of his retirement in Ireland.
It's not for nothing that the guys who stand up to the Yanquis (Castro!) are heroes in the South.
It's amazing how economists can focus solely on economic activity, and the thought that something like
climate change or politics might make their pronouncements useless isn't even rebutted.
Has that one of the Covid-19 lockdown effects has been a fall in expected incremental CO2 added to the
atmosphere in 2020 relative to 2019:
"Forecasters expect emissions to fall more than 5% in 2020, the greatest annual reduction on record. But
it's still short of the 7.6% decline that scientists say is needed every year over the next decade to stop
global temperatures from rising more than 1.5 degrees Celsius.*.
Yes, the earth's climate is one of the uncompensated losers of the world's current system of economic
growth.
Economists seem to be forever optimizing for the GDP measure, while giving lip service to "uncompensated
losers" such as workers and the earth's climate.
Me, being a cynic and all – I thought the way trade worked in the real world (not the one described by well
paid economists) was a multi step process
1) target developing country by undermining their core farming, self sustaining activity and export industries
through cheap importation of grains and crops and other goods – thus making it impossible for locals to survive
through their own industry
2) simultaneous loans (investment) to the country (economic aid) and corruption of political leaders designed
to enable step three
3) Whence said country is indebted – force country to export whatever (mineral) wealth onto a glutted market to
pay back its debts – this is easily done as the labor component is ripe for the picking/ fleecing
4) crush the country into economic austerity for as long as it takes to enslave its citizens and grab
everything of value from the country
5) pretend that the IMF etc did such a great job – but the countries people (victims) or government did not do
enough and must take care of themselves better
I think that you covered the Standard Operation Procedure here in better detail than I could. I would
only add to point 2) that the bankers will go to these local leaders and show them how to hide their money
and help them set up accounts in a place like the Caymans as part of the service.
And if that economist wants to find where all of Africa's wealth is going, he might want to start in the
City of London and New York first.
I share the general sense of confusion. I'm not quite sure what the point of this essay is. It's full of
wild generalisations like:
"According to the conventional wisdom until recently, growth in China, India and East Asian countries took off
thanks to opening up to international trade and investment."
I don't think that's ever been conventional wisdom for Japan, Korea and China, for example, whose economies
were (and in part still are) highly protected. Industrialisation in those countries was not "export-led".
It also confuses "trade" in the old sense, of countries importing things they couldn't produce and exporting
what they could, with "trade" in the new sense of moving stuff around the world largely for financial reasons.
Trade in the classic sense may have benefited the country as a whole (though this is debatable) but trade in
the current sense was never intended to. Likewise I hadn't heard that globalisation had fostered a "jingoist
backlash" – jingoism after all means aggressive calls for war. But then the whole article is clumsily written
and badly constructed.
And the idea that Africa should rely on itself is fair enough, but runs counter to every piece of advice given
to Africa since independence: remember, the World Bank master plan was for African countries to grow cash-crops
for export to generate cash for industrial development? We know how that worked out. And yes the African market
has enormous potential but it's desperately lacking in infrastructure, which makes trade between eve adjacent
nations desperately difficult. You need to fix that first.
There's a growing realisation on our continent that outsiders aren't going to lead us to the promised
land. The obstacles to effective intra-african trade that you identify will have to be cleared before
Africa's potential can be realised, and as an African I have to believe they will be, challenging as that
will be.
The overthrow of Omar Al Bashir in Sudan has shown that people in Africa are agitating for real,
lasting changing, liberation from the rule of corrupt leaders and true, not pseudo independence from the
West and increasingly China as well.
Other leaders have taken notice of this, as have ordinary citizens
across the continent. It will take time, ther'll probably be a few false starts, we'll wobble a bit but in
the end I believe we'll get there.
"trade generates winners and losers", with many losing out, and urges acknowledging "the evidence rather
than trying to discredit it, as some do."
I don't known who "discredits" it.
What I see is that everybody important acknowledges it, but does squat about it. This redistribution never
happens, the rich get richer in a role reversal of "I'll gladly pay you Tuesday for a hamburger today". Any
attempt to have the rich share the hamburger is greeted with a "not now!" and a assurance that if the rich stop
continuously getting richer at
this
particular point in time then everything will collapse.
The poor, of course, ain't got until this mythical "Tuesday".
Indeed! Very few Africans have IoT sous-vide sticks yet, or Smart doorbells. I'll bet they are way behind
on fast fashion, too. Vast market to sell them things no-one needs and that wreck the earth
on credit
.
Just gotta get those roads built so Jeff can deliver stuff to them in 2 days.
The best understanding of what is going on in Africa I got from Jared Diamond – book, "Collapse: How
Societies Choose to Fail or Succeed". And for background – "Guns, Germs, and Steel". Global climate
heating is going to destroy Africa, already is. The usual story, no water, no forests, too much heat and
humidity. It's a terrible reckoning. And largely not of their making.
Me, being a cynic and all – I thought the way trade worked in the real world (not
the one described by well paid economists) was a multi step process
1) target developing country by undermining their core farming, self sustaining activity
and export industries through cheap importation of grains and crops and other goods –
thus making it impossible for locals to survive through their own industry
2) simultaneous loans (investment) to the country (economic aid) and corruption of
political leaders designed to enable step three
3) Whence said country is indebted – force country to export whatever (mineral)
wealth onto a glutted market to pay back its debts – this is easily done as the labor
component is ripe for the picking/ fleecing
4) crush the country into economic austerity for as long as it takes to enslave its
citizens and grab everything of value from the country
5) pretend that the IMF etc did such a great job – but the countries people
(victims) or government did not do enough and must take care of themselves better
I think that you covered the Standard Operation Procedure here in better detail than I
could. I would only add to point 2) that the bankers will go to these local leaders and show
them how to hide their money and help them set up accounts in a place like the Caymans as part
of the service.
And if that economist wants to find where all of Africa's wealth is going, he might want to
start in the City of London and New York first.
There is a cost and "True cost". The latter is often hidden and might higher the the
cost.
Notable quotes:
"... The Price Mechanism Theory only works well when there is honest and accurate information to understand the true costs, but our leadership is corrupt and has not been honest with us. In order to protect both American interests and American citizens, it is important to develop mechanisms to fully understand the consequences of many of our policies and who is making them. Who ..."
Our elites have been responding to incentives which are beneficial to their institutions,
and China, but detrimental to America.
A shell of a piano in the lobby of the Lee Plaza Hotel. The decades-long decline of the U.S.
automobile industry is acutely reflected in the urban decay of Detroit, the city lovingly
referred to as Motor City. (Photo by Timothy Fadek/Corbis via Getty Images)
George D. O'Neill Jr. We have come to a point in our nation's public discourse where there is a widespread
realization that many of the economic policies pursued and promoted by our political, business
and media elites have failed us in multiple ways. We have heard our trade policies called "Free
Trade" and "Free Market", but those statements were often dishonest.
When crafting these agreements, our elites have been responding to incentives which are
beneficial to their institutions but detrimental to the well-being of American citizens.
... ... ...
The same is true for manufacturing businesses. The closing of a factory has huge costs for a
neighborhood: unemployed people. Not just those from the factory, but the people who work at
companies which supply goods and services to that factory. The consequences of a factory
closing cascades through the economy. The tax base for that neighborhood is also eroded, which
reduces the community's ability to maintain and deliver essential services and support civic
institutions.
We cannot just turn off a factory like a light switch and turn it back on at will when the
Chinese decide to raise their prices at a later date.
None of this takes into account the quality of the goods that we receive. We have just
become aware that more than 90% of our pharmaceutical antibiotics are manufactured in China.
When you hear of the big drug recalls, keep in mind many of them are from China, which is
famous for ubiquitous and flagrant corruption as well as a disregard for quality control. Do we
really know if our antibiotics are safe?
Now, back to our leadership, which we have relied on to guide our nation. Their incentives
often lead them to make choices which do not benefit the American people. The Chinese have
famously made generous
deals with a sitting vice-president's son and a Secretary of State's stepson that likely
insured high level government silence about their predatory practices. The Chinese have
purchased important media assets, such as the largest film distribution company in America and
inked lucrative media deals with huge media companies to purchase silence about their predatory
behavior. The same is true with many other industries.
... ... ...
The Price Mechanism Theory only works well when there is honest and accurate information
to understand the true costs, but our leadership is corrupt and has not been honest with us. In
order to protect both American interests and American citizens, it is important to develop
mechanisms to fully understand the consequences of many of our policies and who is making them.
Who is making the decisions is often just as important as what is being
decided.
George D. O'Neill, Jr., an artist, is the founder of The Committee for Responsible
Foreign Policy and a board member of The American Ideas Institute, the parent of The American
Conservative. Mr. O'Neill has been in the mining industry for more than four decades. He and
his wife reside in Florida.
Correct. The so called "free markets & trade" worked in conditions after WWII, when US
goverment used it's military and political influence to set up favorable economic &
trade conditions for US. It's an utopian vision, that has nothing to do with real world.
It's important to recognize that it's not realistic to do all manufacturing in America, at
least in the short term. We consume too much. Before the virus, we were already running on
all cylinders as employment was concerned and have been for a few years.
There is a significant difference however in our trade dependencies being on China,
versus Japan, Mexico, Vietnam, or India. The former is a geopolitical rival, the latter are
not. In fact, laying groundwork to move more of our trade to the latter builds up China's
regional rivals at the expense of China, and at comparatively less expense to us.
It's not healthy for a future multipolar world for such a capable power projector as
China to be so disproportionately profiting from declining hegemon America.
If you think the hallowing of the US economy with it increasing wage inequalities, outsized
wealth allocation to financial sectors, increasingly political divisions, etc. is because
CHINA BAD, then you are no different than the other corporate profiteers who dug us in this
hole in the first place. This is how the corporatists are trying to avoid blame for their
fundamentalist policies over the past four decades. They lash out, "It's only the BAD
Chinese, everything will be better if we just move it to Vietnam/Bangladesh/Ethiopia."
You ascribe things to me that have nothing to do with what I said. The Chinese are not bad,
just a competitor, and China is not responsible for America's own choices.
You're just replacing one utopian thinking about free trade, with another about economic
protectionism. The world doesn't fit neatly around ideological dogma.
Until you square America's overconsumption you have to tolerate trade deficits. You can
make strategic choices about where they come from at least. Free traders were not honest
about impacts on domestic industry. Domestic protectionism is not being honest about the
fact that for it to succeed, consumption of imported goods, and some domestic, to free up
capacity to import substitute, has to tank, without the prospect of enough domestic
production happening to replace them, and certainly not at anything like the price levels
that exist currently.
In the long run overconsumption should be attacked. Strategic, mutually beneficial trade
relationships will still exist. In the short run we should be more careful about the source
of trade deficits. Overconsumption will not be solved overnight. But that's not a neat
campaign slogan.
I don't disagree with the problems of an over-consumption reliant economy, which prefers we
purchase new TVs every 3 years, smartphones every 2 years, and 3 new winter coats every
season. But it's a huge fallacy to imagine that reallocating production to Vietnam or
Bangladesh will reduce China's power. Who will be creating those factories? Sorry, Chinese
investment. Where will the logistics chain need to connect? Sorry, all roads will lead to
China - both for its 1.4 billion consumer and their ability to control the higher end of
the manufacturing. When will they demand China's inclusion in a grouping like TPP? Sorry,
within 1-2 years of signing that supposed "Keep China Out" agreement. Guess whose economies
will be even more reliant on China? You guessed it, all those supposed U.S. allies who want
no part in global decoupling.
It was ok to let low margin manufacturing move offshore because Americans were going to
move up the value chain. These other countries, like China, would develop their economy,
lift a few billion people out of poverty, and transform themselves into beacons of freedom
and democracy across the developing world. The globalists told us this over and over again.
China (and India) would make our plastic junk and we would sell them financial products and
services like credit default swaps and make a killing!
And that's how it worked out. The bankers made out. No one cared about the displaced
factory workers because it was their own fault they weren't smart enough to become Wall
Street masters of the universe. Buying American, we were told way back in the 80s by Saint
Ronald Reagan was a scam to support corrupt unions and lazy management. How dare they
demand, for example, that Japanese car makers locate here in the US. We should just let
them import what they want and let Ford go bankrupt. Union busting was more important than
anything else.
What you want with trade is to keep it somewhat balanced, and watch employment. To continue
the example Japan exports roughly twice to us what we export to them. Ideally that'd be
more even, but who is going to make more products to export to Japan, or produce Japanese
products here? You'll have to fight for workers already being employed elsewhere. And many
on the right probably would not like the idea of more immigrants to help staff production,
or to free up Americans to staff it.
America does suck up too many talented people into well paid jobs that do little to
advance us, but certainly not enough to correct the trade imbalances of every country we
trade with. Probably not even Japan whose imbalance is a tiny fraction of China's.
America's trade imbalances are a collaboration between foreign producers seeing
opportunities, domestic elites seeing major profit, but most importantly Americans
themselves whose consumption impulses are so, so lucrative. Americans cannot make all the
stuff that Americans want right now. Enter immigrants. Enter outsourcing. Enter major trade
deficits. People profit on the exchange, but this is a setup that America collectively has
voted for with its wallet, over and over again.
Also America makes/made products that other people don't want. From 2 by 4 lumber in inches
and feet, when the rest of the world is in metric system, to oversize fridges and pick-up
trucks that do not fit in the European or Japanese size houses and roads.
"Deliver a good product at a price and quality acceptable to the customer."
LOL. Obviously a failed businessman. The purpose is to put your customer's money in your
pocket. If your customer is making a profit off of your product, raise the price. If the
customer balks and buys from a different vendor, buy all the vendors. Create a monopoly.
Once you have a monopoly, stop paying whiney American workers who expect decent pay and
respect, and have Chinese slaves make your product. The purpose of the "Free Market" is not
about price. It's about maximizing shareholder value. It's not about creating good jobs,
America or any of that other nostalgia from the pre-Free Market days.
It's about liberty. The liberty of the property and capital owning class to keep their
wealth (their wealth is the same thing as your labor), in their hands and away from you and
your stupid government's grubby, unwashed hands.
The ideal market conditions result in happy customers and profitable businesses. Its true
that ideal market conditions often don't prevail when a monopoly is created. But what makes
it even worse is when government enables those conglomerates to become even larger by
making it impossible for small businesses to compete due to onerous regulations and
gobbletygook tax loopholes gained by conglomerate lobbyists.
I believe the economic policies based on the dominant economic theory in Germany is the
best approach for a solid, competitive economy. That theory is Ordo-liberalism, which
allows government to make sure a proper legal environment for the economy exists to
maintain a healthy level of competition through measures that adhere to market
principles.
The Ordo-liberalists believe if the state does not take active measures to foster
competition, firms with monopoly power will emerge, which will not only subvert the
advantages offered by the market economy, but also possibly undermine good government,
since strong economic power can be transformed into political power. We have seen this
happen in the US and it is BIPARTISAN. In fact some of the worst examples of unholy
alliances between corporations and government come from the Dem side of the aisle.
The open markets, open borders policy has been good for the elite but detrimental for the
US. Millions of immigrants were let in as the jobs they could perform were outsourced to
China and Asia in general. Consumer electronics,textiles,steel, appliances, automotive and
manufacturing of all sorts were allowed to leave. Not everyone can be a coder, work on Wall
Street, for the Government or Academia. This same elite is aghast at the rise of Trump,
what else could anyone have reasonably expected?
The problem is Milton Friedman was wrong about central planning. Adam Smith's Wealth of
Nations was written when communication systems were poor, so localized information was
better. With modern data collection, "big data" analysis, AI and other such tools central
planning exists and works. We call the winners in that planning world companies like
Walmart and Amazon. We also know that central planning in the US worked with less than
perfect data. The War Production Board in the US in WWII did allocate production of all
those things necessary to manufacture Milton Friedman's needle (or more likely a cotter
pin). There were imperfections but we let those run over into the consumer segment of
goods. Flash forward to today, the "free market" is the myth used to convince average
American to allow hedge funds, private equity, and companies like Bain Captial ship their
jobs overseas. Especially as we move to robots, there is no reason to import any
manufactured goods. Likewise, those pesky environmental rules we have? There is no reason
we don't apply those rules to things people seek to sell in the US market--meaning we could
make an importer prove goods were manufactured according to US standards. Health and safety
standards are not sources of "comparative advantage" in free market theories.
And this is why the Chinese, Russians, Indians, Iranians, Japanese, Europeans, Koreans,
don't want their economies run from Wall Street and carefully control the shares owned by
outsiders.
I think on the topic of "planning" its important to clarify. Some call any government
intervention an example of "central planning" while others apply that term only to
Soviet-style Gosplan. Either way the "Knowledge Problem", while true to an extent, is
incomplete. The fact of the matter is we don't need to know everything about the market to
make correct decisions regarding what economic goals we want to set, and there is a scale,
a difference, between something like the American System and Gosplan. Julius Krein's
article in the American Compass was excellent, I'll link it below. One need only look to
the success of the East Asian Tigers or to the US from 1791-1965 (dates vary) to see the
success of a healthy sort of developmentalist "planning". Not all planning has to be
adverse to private business, the most successful types are done in conjunction with it.
There will be imperfections whether the government is involved or not, the fact that
imperfections will exist or that mistakes might be made is no excuse for inaction,
especially when that inaction leads to the situation we're currently in regarding
pharmaceuticals.
Yes, interesting article. I liked how quickly in the article it started talking about risk
and the important role government has in mitigating that risk.
What is also missing from this entire discussion about free markets, which is essential
and it is eschewed or pooh-pooed or entirely not acknowledged by libertarians and
conservatives alike (not that progressive / liberals talk about it), is what is the role of
representative democracy in steering how economy (which is a means to an end, not an end to
itself) should work, what is the role of government, and who's really the sovereign (We the
People of the United States, in Order to form a more perfect Union, establish Justice,
insure domestic Tranquility, provide for the common defence, promote the general Welfare,
and secure the Blessings of Liberty to ourselves and our Posterity.....).
Is the government by the people and for the people or it isn't? Are there proper
mechanisms in place to oversee how well operations are conducted by government, according
to approved budgets? Is government supposed to do forecasting and crystal balling solely by
using think tank reports or should have internal professional and knowledgeable analysts
doing this work (I swear on the constitution of the US to serve, etc., etc, etc.).
All this rabbit hole over which libertarians and conservatives starting with Reagan have
been pooping on. Nixon nowadays, or Eisenhower wouldn't be accepted by Republicans, nor FDR
by Democrats... And talking about free markets and democracy, it is puzzling to have just a
duopoly entrenched in the marketplace of political ideas in the US. Everything else is
literally killed.
It's too easy to just blame corrupt elites and therefore let the system itself completely
off the hook. Any system that allows for a small number of private entities to twist
everything to their personal advantage is a system with major structural flaws. The
essential core of the problem is that any system pursued too rigidly and ideologically will
lead to short-sighted decisions that ultimately lead to perverse and absurd
outcomes.Offshoring most of our manufacturing wasn't a corrupt decision made by a small
cabal of villains. It was a logical, yet ultimately destructive, result of blind and
unthinking pursuit of pure "free trade."
Imagine a society (like the U.S.) to be like an organism with a heart, lungs, brain,
limbs, etc. Now imagine that each part of the body is told to maximize its own benefit
without any concern for the organism as a whole.
Those in charge of the brain say "We function better with more blood flow, so let's
block off blood flow to the arms and legs so that we get more. Great idea!" Now the
organism's brain is doing great, but its arms and legs wither and die.
"We are benefiting from the increased blood flow too," says the lungs, "but the heart
just isn't producing enough for us to really flourish." What if we outsource blood pumping
to an external entity that promises us more volume? So now the heart dies and what is left
of the organism is now hooked to an external machine to keep it alive.
"Why do we have to rely on an inefficient mouth and teeth to give us our source
material?" chimes the stomach. "How about a feeding tube to give us cheaper and faster raw
materials?" Etc etc etc.
On and on it goes with some parts doing great from their perspective, but with the
overall organism being hollowed out and weakened.
The best type of economic system in a country is a mixed one that blends together
capitalism with some degree of central thinking and planning (egads, heresy!) about how
decisions could adversely affect the long term health of the country as a whole.
Nice comparison. Are you letting us think and believe that one part of the body ends up
thinking that is in fact totally independent and can leave all the rest wither and die?
With deep psychopathic tendencies, that filters all the stimuli and the information
received from the body, except its own?
The communists had said that capitalism would sell the seeds of its own destruction. Our
elites came up with free trade but chose to ignore that free trade was merely a facade to
export jobs and import goods with them skimming the profit. They chose to ignore all the
financial (and political) machinations like currency rigging, state subsidies, forced state
sharing or ownership of technology when off shored to China, they choise to ignore prison
labor and others. This isnt about free trade or free markets because there is no such
thing. Every nation has a different social welfare system, medical system, tax system,
copyright and patent system, system of legal bribery and payoff, etc and each is meant to
tip the scales of free markets and free trade to their advantage (and in the case of China
a technological and monopolistic and militaristic advantage). We are now at a point where
the game and the cards have been revealed though the Democrats have been profiting for so
long that they want to keep the game going with the Chinese and other foreign nations (its
easy money to line their pockets and their campaign funds since they dont have to listen to
their constituents diverse views...they just need to manage them and listen to Chinese
demands). Id say the american citizenry is boiling mad and arent far away from boiling over
but we shall see where it goes or if it goes anywhere. To date Trumps restrictions on
immigration and his trade deals are better than the nonexistent policies of the democrats
but they are will woefully catering to the elites and lacking in spine and substance to do
as Trump promised.
I think prison labour is more relevant and widespread in the US rather than China. China
has all the political interest to provide work for all the free multitudes teaming in their
cities and countryside, why to give that to prisoners?
Same as the story with the Uighur camps. Just seen recently a Reuters article on the
Russian vessel arriving in Germany to finish laying down the NS2 pipeline, with satellite
pictures, etc. Just a ship. However, there was no picture provided to the world to show the
massive developments required to house 1 million people, not one, and I looked.
Sorry, just a pet peeve of mine to see statements that don't stand close scrutiny.
The Price Mechanism Theory only works well when there is honest and accurate information
to understand the true costs [ ]
You're conflating the economic with the political. There is nothing wrong with Mises'
work on prices and how they coordinate an advanced, widely distributed, division-of-labor
economy. It works in the "macro" as well as the "micro" -- because that is an artificial
distinction (something Mises could tell you about, too).
The fallacy is imagining that economic theory is the be-all-end-all. When people think
that, they ignore political considerations and consequences, to the detriment of society at
large. The bottom line is there is nothing wrong with free trade among free countries in a
peaceful world. The political situation of the present world, however, demands a somewhat
more modified approach. If these are the "true costs" you're talking about, fine. But
you've expressed it in such a way as to muddy the waters of what is an honest and accurate
economic theory.
That is because he doesn't understand what really happened in China. If you read this
thread you also see many theories. They are all based on preconceptions and not actually
reading about what happened China after the gang of four were ousted. They understand the
consequences and they theorize about the cause. But they don't have to theorize. There is
an actual history.
China was not selling cheap products to the United States until about three decades
after the job transfers started and it was almost already done by then. The truth is, China
had nothing to export but its labor. It did that by letting American and other companies
set up in China for exploitative wages and protected them by denying its people any rights.
They then built products under American management and training. The products were then
shipped back to the US as "Chinese" products. But they really were American products made
in China. The companies here were not protecting China. They were protecting themselves
directly. The jobs transfer was not an unfortunate side effect. It was the whole point.
China had nothing to trade. Mao had destroyed the economy.
I recall a long time ago when there was a documentary on this topic and one of the workers
from a electric appliance manufacturing facility was interviewed. They were complaining
about the Chinese manufactures taking over their product line with cheaper products and
causing layoffs at the plant. The moderator asked them where they shopped, they replied
"Walmart". When the moderator pointed out that Walmart was the leader in offshoring to get
cheaper products, like the appliances they made, they just stared.
You are going to somehow have to make Americans pay more for the same thing they can get
cheaper from China. Who is going to do that? Not going to be those workers you are trying
to protect, they don't have the money to do that. Price is king to them, it is only those
snobby liberal types that can afford to do that.
Lets say you manage to get our factory worker to buy 1 expensive American shirt instead
of 3 cheap Chinese shirts for the same price. They are not going to get 3 times the life
out of that shirt so they are in the hole for that purchase.
Lets say you are really persuasive and the workers really do change, what about all the
rest of the people that were employed in the retail and supply chain? What are they going
to do? You just put them out of business. You are just deciding to move around who is
unemployed.
What about the exporters? Do you really think that China is going to buy American
products if you don't buy theirs? How did Trumps trade war work out? Have we won yet? As I
recall it cost the average consumer between 500 and 1000 dollars by the time all the
tariffs were applied and the farmers and ranchers in the Midwest that exported there are
now on government welfare because they could not sell their products. His new "deal" was
panned by economists as being nothing more than a minor cosmetic change, the same as the
updated NAFTA deal that really changed little.
It is fun to blame the elites but it is a bit simplistic as the american workers have
not had a problem sacrificing a few other workers to save some of their own money. If you
want to change that you are going to have to start at the bottom and work up.
It should be mentioned that the cheap clothing we buy is rarely made in China. China has
leveled up and no longer makes the general crap people buy. The shirt cheap t-shirt I'm
wearing was made in Vietnam.
A free market with foreign governments is an impossibility. We would have to know every
single that is happening within their government and that will never happen. Indeed our
internal free market is fading away due to cronyism and secrecy within our own governments.
Tax breaks to lure businesses to your state are anti-free market (not to mention the taxes
still have to be paid, by the people who are already there). Tax breaks and subsidies to
companies already in your state (like windmills and solar panels) are anti-free market. So
the conclusion that I draw is the Democrat and Republican parties are imbeciles and crooks
and both parties must be destroyed.
If you believe economic efficiency is the primary value, you would say, "if the Chinese
are stupid enough to sell us products below their costs, we should be happy to take
advantage of their stupidity." True enough .
But it is not true that is what is happening. It never happened. Chinese invited
American companies to manufacture in China. China was selling labor. Not products. It had
no products to sell. But when the American companies in China use Chinese labor to
manufacture American products the products come to America marked "made in China". But
all that the Chinese really sold was cheap labor without rights .
The second thing to know is that the Chinese forbid American companies to use their own
brand names in China. They had to create Chinese companies that are 51% Chinese owned but
wholly American managed with Chinese management in training. The Americans operated as if
they were at home. The only difference is that they had Chinese under studies and the line
workers were Chinese. The American companies didn't care because they were making money
hand over foot. So when they spoke of "free trade" we were selling out America workers and
bringing home cheap goods that our public loved. This was called globalism. That was phase
one.
In the second stage, the Chinese quietly reminded the Americans that these were Chinese
companies and it was time to begin to promote their Chinese understudies. The Americans
didn't care because they still maintained control from America. And they could always find
spots for the management back home. But from the Chinese point of view, they now had
American technology in Chinese companies, run by Chinese. The technology was now
theirs.
They felt free to grow their businesses with wholly owned and controlled subsidiaries
since they now owned the technology. This was when the American companies began to scream
about intellectual property. They cared because the interests of the rich were now being
hurt. When they were stealing American jobs, that was Ok. Only then did our government see
a problem. Shipping American jobs overseas is globalism, but shipping patents and
copyrights is not. Globalism was always a con. It never existed. It was simply a
smokescreen to exploit cheap, unprotected labor in the developing world. They knew from the
start that it was not good for America. It was not a discovery. They didn't care because it
made them rich.
Though I largely agree with the premise of this article the assumptions latent in mr.
O'Neill's thinking specifically the US government has to do anything in reflection to the
Chinese Communist politburo misses the point of freedom and property rights, in an economy
free of the regulatory burden that the oligarchs in pose on the market through their
governmental collusion not to mention the tax burden that helps to maintain the shipping
lanes to China the American manufacturer will be fine. It should also be said for me
environmental point of view free of state protection the perpetrators of mountaintop
removal coal mining,glyphosate manufacture etc. Would find themselves much more vulnerable
to civil lawsuit/tort law.
"Libertarians
who are extraordinarily sensitive to the least legal limitation on negative freedom are usually
completely immune to the idea that structural features of capitalist society are coercive and
freedom-limiting. "
I think you will discover that those who coined the term libertarian (libertarie) which the
propertarians knowning stole in the 1950s are well aware of those structural features -- as
Proudhon argued, property is both theft and despotism.:
@onebornfree
Anti what freedom exactly? Freedom to be replaced by a machine, without any forward thinking
plan by society? Freedom to be hungry? Freedom to rampage and kill others?
This American freedom is an ideology on par with the nihilistic ideology of ISIS. It is an
embrace of materialism through Epicurianism. Why exactly is this freedom to crave endlessly,
superior to the freedom the CCP aims for its people – freedom from destitution?
You say they are enslaved, but they would say you are enslaved. You say that society
enslave their individuality, they would say your individualism enslaved your society.
Any chance of finding a balanced middle ground? Cause the Chinese are closer to it
atm.
Well, you were indeed right. And your reporting better than most if not all MSM articles
written by other laymen. And all without any professional experience. Just by trusting in
scientific methods, data and knowledge, instead of making a conspiracy out of thin air.
In those times, that is an amazing achievement.
But when i hear how few people are tested, when i hear of multiple deaths in my circle of
people, and see the society unable to unite against such a threat, i dont have much hope for
how this will go on.
The last 4 sentences say everything about our western societies, including us Germans.
The only profiteers are the rich, toilet paper and noodle merchants, and politicians (who now
race each other in opening up BEER GARDENS and CONCERTS with 100 people).
Many people today willingly prefer to go to concerts and beer gardens than to deny themselves
those small joys in favor of their compatriots.
Our society is doom. The neoliberal dogma of "Freedom for the nihilistic narcissistic ego
individual over everything else" destroyed what was left of it.
"..At one New York City nursing home, the Isabella Geriatric Center in Manhattan's
Washington Heights, nearly 100 of its 705 residents have died..."
"..In Medfield, Massachusetts, north of Boston, COVID-19 has killed 54 residents over the
past four weeks at the Courtyard Nursing Care Center. An additional 117 residents and 42
employees have tested positive for the virus..."
" A shocking 84 residents have died at the facility since the virus outbreak. Eighty-one
employees have tested positive for the coronavirus.
"... deaths at the Soldiers' Home were initially hidden from both the mayor of Holyoke and
local health officials, who only became aware of the developing situation when employees at
the facility reached out to them. Staff said management at the facility refused to provide
them with PPE and instructed them to crowd patients together from multiple wards into a
single ward as a solution to staffing shortages due to infections..."
"..A particularly gruesome discovery took place in mid-April when police found 17 corpses
piled up at the Subacute and Rehabilitation Center in Andover, New Jersey. The bodies were
stacked in a small morgue designed to hold a maximum of four bodies. The more than 2,000
deaths of staff and residents in New Jersey's long-term facilities account for about 40
percent of the state's coronavirus-related deaths."
There's more much more. And not just from the United States either.
Markets are created and managed by government, Mr. Gruff. Governments are developed to
establish justice, ensure tranquility, provide for the common defense, and promote the
general welfare. Without these no market is possible. There is no "free market" without
government.
Pleonexia is a
concept I introduced into a discussion of a similar topic about 2 or so years ago on this
board as being at the root for the decline and fall of the Outlaw US Empire. Here's what Wiki
says about it at the link:
"Pleonexia, sometimes called pleonexy, originating from the Greek
πλεονεξία, is a philosophical concept
which roughly corresponds to greed, covetousness, or avarice, and is strictly defined as '
the insatiable desire to have what rightfully belongs to others ', suggesting what
Ritenbaugh describes as ' ruthless self-seeking and an arrogant assumption that others and
things exist for one's own benefit '" [My Emphasis]
That trait's shared by all Imperialist nations all of which arose based on the same
Greco-Roman foundations or learned those traits from them as in the case of the Japanese.
Indeed, that such traits aren't recognized speaks to the illiteracy of those rising to or
placed in leadership positions as they seem to be totally unaware of the numerous lessons
within Greek and Roman literature/culture--lessons known by the Founders and others 250 years
ago when to be considered educated you had to know Greek, Latin, and their classical
literature. As Walter says, it's a Greek Tragedy; but the play began in the last quarter of
the 19th Century as has also been written about.
Those running the Outlaw US Empire seem oblivious to the wall they're about to run the
nation into, or we might say it's a cliff that will take the nation into the abyss. The G-20
determined last year that a new global currency to conduct commerce was required to replace
the dollar. A short discussion and linking of articles occurred on that topic yesterday
between me and Likklemore. Bevin insisted we discuss the failure of Capitalism and what needs
to come next as its replacement. I've advocated the need for a steady-state socialist system
as the new global political-economy. As I reported, a prominent Singaporean in promoting his
newest book wrote in The Economist that the advent of the pandemic marks the start of
the Asian Century thanks to the gross Moral Failure of the West and the Outlaw US Empire as
its lead nation.
How does a group of people get cured of Pleonexia? It's likely way too late for the
current crop of oligarchs; but what of their heirs who were presumably schooled in similar
fashion to their elders, and their progeny? I'm with Hudson in that their wealth must be
written down close to zero, and the new system emplaced will not allow a repetition.
Meanwhile, someone needs to get busy writing about the current Tragedy such that future
generations can learn its lessons so they're not repeated.
"... Countries that have allowed their domestic industry to decay have found they cannot now produce the crucial equipment they need, from respirators to gas masks. Countries with strong manufacturing bases like China, or with a prudent nationalist sense of preparing ahead for emergencies like Russia, have done far better. The shortage of respirators in Britain has become more than a national scandal: It is a national shame. That is another inexorable consequence of the pernicious doctrine of Free Trade. ..."
"... While half the counties in the United States remain so far virtually free of the virus, infections have soared in most major metropolitan areas, especially in so-called Sanctuary cities. Invariably these centers are ruled by liberal Democrats where illegal immigrants congregate. ..."
"... the ruling elites of the West have mindlessly embraced Open Borders and Free Trade ..."
"... Russia suffered the full horrors of the merciless laissez-faire, unregulated Free Market policies of the liberal West in the 1990s. Boris Yeltsin never woke up to the catastrophe that Bill Clinton and Larry Summers were inflicting on his country. ..."
"... National social responsibility has succeeded where the crazed, simplistic theories of Adam Smith, David Ricardo and Ayn Rand all palpably failed. ..."
"... The ravages of Liberalism – its Open Borders and Free Markets – have already stripped the West of all its defenses, social, demographic, industrial and economic. ..."
"... open border free trade globalism was an EPIC scam foisted on us ..."
"... Liberals have been selling out American workers for decades, and getting personally wealthy the whole time. Bill, Hillary, Barack, now Joe. ..."
"... This is not a coincidence. The worst part is how they profess to care so much about the underprivileged, unless that person is a worker put out of a job by imports. What a bunch of sleaze balls. ..."
"... NWO Billionaire Globalists have imposed this nightmare on the USA and other citizens of the Western world. ..."
Open Borders and Free Trade induce national suicide slowly and gradually, without the
victims waking up to what is going on until it is too late. But the coronavirus has brought
home with global clarity that human societies need governments and regulated borders for their
own survival.
The bottom line is clear, societies that have had open borders to previous major centers of
infection and transmission, like Iran and Italy which kept open strong flows of people to and
from China in the early stages of pandemic, suffered exceptionally badly.
Countries obsessed with maintaining liberal values and open borders like France, Germany,
the United Kingdom and the U.S. also suffered disproportionately.
Countries that have allowed their domestic industry to decay have found they cannot now
produce the crucial equipment they need, from respirators to gas masks. Countries with strong
manufacturing bases like China, or with a prudent nationalist sense of preparing ahead for
emergencies like Russia, have done far better. The shortage of respirators in Britain has
become more than a national scandal: It is a national shame. That is another inexorable
consequence of the pernicious doctrine of Free Trade.
There, I showed how even the French Revolution of 1789 was in fact triggered by the
catastrophic Free Trade Treaty that hapless King Louis XVI approved with England only three
years before. It led immediately to the worst economic depression in French history which
triggered revolution. In three years, liberal Free Trade succeeded in destroying a society that
had flourished for a thousand years and the most powerful state Europe had known since the fall
of the Roman Empire.
In his classic television series and accompanying book "How the Universe Changed", the great
British broadcaster and historian James Burke showed how the discipline of statistics was
responsible for discovering the way the cholera bacteria spread through contaminated water in
19th Century London, then the largest urban area ever experienced.
Today, we see a similar pattern in the spread of the coronavirus: While half the counties in
the United States remain so far virtually free of the virus, infections have soared in most
major metropolitan areas, especially in so-called Sanctuary cities. Invariably these centers
are ruled by liberal Democrats where illegal immigrants congregate. They are the places where
the values and consequences of Free Trade and Open Borders most clearly flourish. And they ar
ealso the places where the terrifying costs of those policies are most evident as well. The
chickens have come home to roost.
Countries like Russia and China itself, which have reacted most quickly and decisively to
shut down international and domestic travel, have been able to keep their numbers of infections
and rates of spread down.
In Europe, by contrast, the impact of the virus has been appalling, The European Union has
been as useless as New York City Mayor Bill de Blasio,. Pro-EU liberal national leaders like
President Emmanuel Macron in France and the venerable Chancellor Angela Merkel in Germany
(Berlin's version of Nancy Pelosi) just sat back in bemused silence till it was too late. In
Italy and Spain, the political splintering of societies has woefully added to the chaos.
This is in fact a very old lesson indeed: The ruling elites of the world should not have had
to relearn it.
But for more than 225 years, the ruling elites of the West have mindlessly embraced Open
Borders and Free Trade. Yet these have always been mere assertions of prejudice and mindless
faith: They have never been proven to be true in any scientific manner.
Instead, when we look at the factual evidence of economic history over the past two
centuries, it has always been the case that developing industrial societies which protect their
manufactures behind strong tariff barriers flourish with enormous foreign trade and balance of
payments surpluses. Then the living standards of their people soar.
In contrast, free market societies too powerless, or just too plain dumb to protect their
economic borders get swamped by cheap manufactures and their domestic industries get decimated.
This was the case with liberal free market Britain caught between the rising Protectionist
powers of the United States, Japan and Germany for the next century.
It has been true for the decline of American industry since the 1950s, the more the United
States embraced global free trade, the more its own domestic manufactures and their dependent
populations suffered. This never bothered the liberal intellectual elites of the East and West
Coast at all. It still doesn't. Having inflicted lasting ruin and despair on hundreds of
millions of people for generations, they despise their victims as "deplorables" for crying out
in pain and seeking to end the disastrous policies.
Russia suffered the full horrors of the merciless laissez-faire, unregulated Free Market
policies of the liberal West in the 1990s. Boris Yeltsin never woke up to the catastrophe that
Bill Clinton and Larry Summers were inflicting on his country. Over the past two decades,
Russia's recovery from that Abyss under President Vladimir Putin has been miraculous. National
social responsibility has succeeded where the crazed, simplistic theories of Adam Smith, David
Ricardo and Ayn Rand all palpably failed.
The coronavirus pandemic therefore should serve as a wake up call to the peoples of the
West, what Thomas Jefferson memorably called "A Fire Bell in the Night." They need to start
following Russia's examples of self reliance, prudent preparation and maintaining strong
borders.
The ravages of Liberalism – its Open Borders and Free Markets – have already
stripped the West of all its defenses, social, demographic, industrial and economic.
The West is out of time: The Audit of Pandemic has been taken, and the reckoning is now
due.
xxx
best thing that trump ever did was to hire navarro to shape the nationalist econ
policies
open border free trade globalism was an EPIC scam foisted on us
they are doing the same to the kids right now with their globalist warming claptrap
xxx
Liberals have been selling out American workers for decades, and getting personally
wealthy the whole time. Bill, Hillary, Barack, now Joe.
This is not a coincidence. The worst
part is how they profess to care so much about the underprivileged, unless that person is a
worker put out of a job by imports. What a bunch of sleaze balls.
xxx
There is nothing "compassionate" about open borders. It is a total myth / scam. Stealing a
country's right to free association and control of its own borders is the ULTIMATE betrayal.
NWO Billionaire Globalists have imposed this nightmare on the USA and other citizens of the
Western world. No different then the kings & dictators of the past these tyrants control
our lives like we are slaves. True compassion would entail (among other things) exporting
commerce, jobs & freedom to every corner of the globe. It's becoming more obvious
everyday why this is never even discussed. Globalism is about spreading tyranny & poverty
not freedom & wealth. Open borders is a one way ticket to Hell. 💀 Time to rise up
and stop this national suicide.
xxx
Liberals will still be only concerned with racism and global rights instead of border
security. Nothing trumps that for them. Not even death. How it's possible for us to be racist
again 1.5B Chinese when we are the vast minority compared to them is something that liberals
have yet to explain to me.
Personal freedom is largely illusory. One spends most of ones life under the control of
others, parents, teachers, bosses, officers, cops, judges, jailers, or sleeping. I wonder if
it's a "right" at all.
However, it seems to me that one has a contractual right to expect good parents, good
teachers, good bosses and so forth. That's a legalistic constitutional right to exchange the
individual's right to violence in exchange for protection. A contact. Individuals sometimes
retain a fraction...the right to self-defense...but this is very limited, and dicey too.
And - especially - one, everyone, does have a natural right to demand Justice, fairness,
and to be left alone. This is a Natural Right. It comes from the outside, from God, if you
like. Dogs and horses, for example express themselves, and kick and bite and krap on your
desk, if they're seriously mislead, (mistreated) Man also has the natural right.
So, Personal freedom seems to be an imprecise term, and seems to have at least two,
probably several, manifestations.
Personal freedom is not an unlimited right. Diana Johnstone has given a convincing
argument for its limits. One's freedom and rights end where they infringe on the freedom
and rights of others:
[V]irtually all key aspects of any civilized society go contrary to the absolutism of
individual rights. Every civilized society has some sort of legal system, some basic rules
that everyone is expected to follow. Most civilized societies have a public education and
(except for the United States) a public health insurance system designed to benefit the whole
population. These elements of civilization include constraints on individual freedom.
The benefits to each individual of living in a civilized society make these constraints
acceptable to just about everybody. The health of the individual depends on the health of the
community, which is why everyone in most Western countries accepts a single payer health
insurance system. The only exception is the United States, where the egocentricities of Ayn
Rand are widely read as serious thought.
It is without doubt that masks are helpful to limit the spreading of the epidemic. An
infected person begins to spread viruses by breathing, talking, singing or coughing on day 2
after the infection. Only on day 5 or 6 will the symptoms of the disease set in. Some people
will never feel symptoms but can still infect others usually up to day 10 after the
infection.
Masks stop the viruses one sheds from reaching other persons. They do this effectively.
Posted by b on April 14, 2020 at 18:12 UTC | Permalink
Let's say Bob can make 10 high-quality wigets per hour, while Jim can make 8 medium-quality wigets per hour. Bob gets paid
100$, while Jim gets paid 50$. Bob is more efficient and productive worker. But he will be fired and replaced by Jim, because
Jim's cost of labor is lower. In this case market will eliminate the more productive worker in favor of a less productive one.
Now, within one nation this difference in wages will be very unlikely and quickly adjusted by the market. But between nations,
Jim could be living in a poor country, where he can afford to survive on 50$, while Bob lives in a rich country with high rents
and high product costs, so he'd barely get by on 100$.
So, how much of the global trade is increasing overall value due to local advantages and how much is just shifting value from
some people in favor of others? And shouldn't we favor the first and minimize the second?
Warnings like this have been happening over the past decade, and there are books (Poorly made in China) showing each part of
the threat.
Each time, it was "Interview with a Zombie" with someone from NR, or Cato, or Mises, or even here, gurgling "Freeeeee Traaaade;
Laaaazeeeee Faaaaire".
Trade has frictional costs. The shipping between the Ricardian tautological countries is not free. If it costs $10,000 to send
the products to the destination, there is no comparitive advantage. Nature provides barriers.
But even worse, there is NO free trade, just regulatory arbitrage. Lets say you need to open a factory. You can:
1. Open it here and wait for the swarms of agents from OSHA, EEOC, EPA, IRS, etc. to harrass you and eat out your substance,
and your workers to be treated like people, and have to get loans from an often hostile banking system that prefers wall street
ETFs. An implacable bunch of socialists and SJWs that think Capitilists are evil and capitalism must be destroyed or just people
on power trips will constantly try to close you down and bankrupt you personally and throw you in prison.
2. Open it in China where they will kick farmers off the land and build it for you, and staff it with disposable workers and
you can just dump pollution into the local stream. There will be the customary cultural cronyism and corruption, but that's what
a consultant is for (Poorly made in china, whats wrong with China). But it is the symbiont that wants to keep the host healthy
so there will be the most blood to skim.
3. Open it in Mexico where it also has different customs than China, but the crony corruption is still far easier to deal with
and less expensive than the Destroyer Obamabots.
Capitalism is really good at optimizing for lowest cost, it is really bad at dealing with "externalities" like a once in a hundred
year global pandemic. Governments should take the "long view" well at least 4-5 years at a time. Corporations look at things more
quarter to quarter.
As Nassim Taleb in his book Antifragile, the two authors are making a straw men argument with regard to David Ricardo.
I don't blame them. They are repeating what is written in most economics textbooks about the theory of comparative advantage.
How they should know that this textbook theory is based on a misinterpretation of Ricardo's famous numerical example. (See here:
https://dx.doi.org/10.2139/...
Ricardo did not assume that prices would remain stable, nor did he recommended that a nation should specialise in one major
industry or that no two agents should specialise in the same industry. Depending on a single supplier is indeed a risky bet, but
that is not what their original case for free trade recommended. On the contrary, it was meant to be a remedy against national
and foreign monopolies.
Many lessons can be learned from the present crisis. To make countries less vulnerable or fragile to pandemics like COVID-19,
we need robust public health care systems that covers all its residents. The health care system needs to have excess capacities
(hospital beds, medical personal, ) and sufficient stocks (masks, ventilators, ) to handle the significant increase in the number
of patients during pandemics. We need more international cooperation, coordination and solidarity, not less. So the exact opposite
of protectionism and national solo efforts.
"Contrary to free-market catechism, the pursuit of profit frequently runs contrary to the
public's well-being. This is especially true in an industry devoted to inventing and
manufacturing health-giving and life-saving drugs."
More activity on the dark, unethical side of capitalism. There's an entire history of it,
opium wars, Atlantic slave trade, pornography, control of political agents through
pedophilia. The list does go on and strangely enough it's usually the same actors.
If you'd ever tried to set up a business here in the UK, you'd realise pretty quickly that
you are under complete and utter control of the government in every aspect and they own your
business by dint of the taxes and the loans you have to take out from their banker friends,
we have soft communism because the government owns you but pretends not to. Magna Carta is
dead and it's only possible resuscitation would be a Runnymede 2 Electric Boogaloo.
"... 1) Pompeo and Grenell reportedly arguing that coronavirus has created window of opportunity for a direct strike on a weak and divided Iran. ..."
"... Deputy Health Minister Alireza Raisian has criticized the #UK for not delivering millions of masks #Iran bought in preparations ahead of #Covid19 outbreak. The London govt. refused to deliver them citing US sanctions! Note that Germany took supplies meant for Switzerland, The US via the Italian Mafia (I suppose) gets masks from Bergamo. etc. ..."
I just think that the US "Intelligence" and most of the US Administration just haven't got it. I suppose when you are waiting
for the "rapture" anything that can add to the chaos is to be included.
1) Pompeo and Grenell reportedly arguing that coronavirus has created window of opportunity for a direct strike on a weak
and divided Iran. They were arguing about the severity of the strike.
2) Deputy Health Minister Alireza Raisian has criticized the #UK for not delivering millions of masks #Iran bought in preparations
ahead of #Covid19 outbreak. The London govt. refused to deliver them citing US sanctions! Note that Germany took supplies
meant for Switzerland, The US via the Italian Mafia (I suppose) gets masks from Bergamo. etc. Wonderful show of
world-wide solidarity.
Pompeo should hold his "rapture" in his hot little hand and .....
"... "Congress/staff who dumped stocks after private briefings on impending coronavirus epidemic should be investigated and prosecuted for insider trading," ..."
"... "Members of Congress should not be allowed to own stocks." ..."
"... "stomach churning," ..."
"... "For a public servant it's pretty hard to imagine many things more immoral than doing this," ..."
"... "Richard Burr had critical information that might have helped the people he is sworn to protect. But he hid that information and helped only himself." ..."
"... "If you find out about a nation-threatening pandemic and your first move is to adjust your stock portfolio you should probably not be in a job that serves the public interest," ..."
"... "calling for immediate investigations" ..."
"... "for possible violations of the STOCK Act and insider trading laws." ..."
"... Think your friends would be interested? Share this story! ..."
In a rare moment of bipartisanship, commenters from all sides have demanded swift punishment for US
senators who dumped stock after classified Covid-19 briefings. Hawaii Rep. Tulsi Gabbard has called
for criminal prosecution.
As chairman of the Senate Intelligence Committee, Richard Burr (R-North Carolina) has received daily
briefings on the threat posed by Covid-19 since January. Burr insisted to the public that America was
ready to handle the virus, but sold up to $1.5 million in stocks on February 13, less than a week
before the stock market nosedived, according to Senate
filings
. Immediately before the sale, Burr wrote an
op-ed
assuring Americans that their government is
"better prepared than ever
" to handle
the virus.
After the sale, NPR
reported
that he told a closed-door meeting of North Carolina business leaders that the virus
actually posed a threat
"akin to the 1918 pandemic."
Burr does not dispute the NPR report.
In a tweet on Saturday, former 2020 presidential candidate and Hawaii Rep. Tulsi Gabbard called for
criminal investigations.
"Congress/staff who dumped stocks after private briefings on impending
coronavirus epidemic should be investigated and prosecuted for insider trading,"
she wrote.
"Members of Congress should not be allowed to own stocks."
Congress/staff who dumped stocks after private briefings on impending
coronavirus epidemic should be investigated & prosecuted for insider trading (the STOCK Act). It
is illegal & abuse of power. Members of Congress should not be allowed to own stocks.
https://t.co/rbVfJxrk3r
Burr was not the only lawmaker on Capitol Hill to take precautions, it was reported. Fellow
Intelligence Committee member Dianne Feinstein (D-California) and her husband sold off more than a
million dollars of shares in a biotech company five days later, while Oklahoma's Jim Inhofe (R) made a
smaller sale around the same time. Both say their sales were routine.
Sen. Kelly Loeffler (R-Georgia) attended a Senate Health Committee briefing on the outbreak on
January 24. The very same day, she began offloading stock, dropping between $1.2 and $3.1 million in
shares over the following weeks. The companies whose stock she sold included airlines, retail outlets,
and Chinese tech firm Tencent.
She did, however, invest in cloud technology company Oracle, and Citrix, a teleworking company
whose value has increased by nearly a third last week, as social distancing measures forced more and
more Americans to work from home. All of Loeffler's transactions were made with her husband, Jeff
Sprecher, CEO of the New York Stock Exchange.
Meanwhile, Alexandria Ocasio-Cortez (New York) and Ilhan Omar (Minnesota) have joined the clamor of
voices demanding punishment. Ocasio-Cortez
described
the sales as
"stomach churning,"
while Omar reached across the aisle to side
with Fox News' Tucker Carlson in calling for Burr's resignation.
"For a public servant it's pretty hard to imagine many things more immoral than doing this,"
Carlson said during a Friday night monolog.
"Richard Burr had critical information that might have
helped the people he is sworn to protect. But he hid that information and helped only himself."
As of Saturday, there are nearly 25,000 cases of Covid-19 in the US, with the death toll heading
towards 300. Now both sides of the political aisle seem united in disgust at the apparent profiteering
of Burr, Loeffler, and Feinstein.
Right-wing news outlet Breitbart
savaged
Burr for voting against the STOCK Act in 2012, a piece of legislation that would have
barred members of Congress from using non-public information to profit on the stock market. At the
same time, a host of Democratic figures - including former presidential candidates
Andrew Yang
and
Kirsten Gillibrand
- weighed in with their own criticism too.
"If you find out about a nation-threatening pandemic and your first move is to adjust your
stock portfolio you should probably not be in a job that serves the public interest,"
Yang
tweeted on Friday.
If you find out about a nation-threatening pandemic and your first move
is to adjust your stock portfolio you should probably not be in a job that serves the public
interest.
Watchdog group Common Cause has filed complaints with the Justice Department, the Securities and
Exchange Commission and the Senate Ethics Committee
"calling for immediate investigations"
of
Burr, Loeffler, Feinstein and Inhofe
"for possible violations of the STOCK Act and insider trading
laws."
Think your friends would be interested? Share this story!
who make profits as well. I cannot remember exactly when insider trading for
them became legal but it should be no surprise to anyone paying the slightest bit of attention
that they're ALL doing it. That is one reason, at least in my semi-educated opinion, they did
not go after Trump for emoluments during Shampeachment, because THEY ALL DO IT.
That goes all the way to the White House, no doubt.
It may one day be said that the coronavirus delivered the death blow to the New World Order,
to a half-century of globalization, and to the era of interdependence of the world's great
nations.
Tourism, air travel, vacation cruises, international gatherings, and festivals are already
shutting down. Travel bans between countries and continents are being imposed. Conventions,
concerts, and sporting events are being canceled. Will the Tokyo Olympics go forward? If they
do, will all the anticipated visitors from abroad come to Japan to enjoy the games?
Trump has issued a one-month travel ban on Europe.
As for the "open borders" crowd, do Democrats still believe that breaking into our country
should no longer be a crime, and that immigrants arriving illegally should be given free health
care, a proposition to which all the Democratic debaters raised their hands?
The ideological roots of our free trade era can be traced to the mid-19th century, when its
great evangelist, Richard Cobden, rose at Free Trade Hall in Manchester on January 15, 1846,
and rhapsodized: "I see in the Free Trade principle that which shall act on the moral world as
the principle of gravitation in the universe -- drawing men together, thrusting aside the
antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace."
In the pre-Trump era, Republicans held hands with liberal Democrats in embracing NAFTA,
GATT, the WTO, and most favored nation trade privileges for China.
In retrospect, was it wise to have relied on China to produce essential parts for the supply
chains of goods vital to our national security? Does it appear wise to have moved the
production of pharmaceuticals and lifesaving drugs for heart disease, strokes, and diabetes to
China? Does it appear wise to have allowed China to develop a virtual monopoly on rare earth
minerals crucial to the development of weapons for our defense?
In this coronavirus pandemic, people now seem to be looking for authoritative leaders and
nations seem to be looking out for their own peoples first. Would Merkel today invite a million
Syrian refugees into Germany no matter the conditions under which they were living?
Is not the case now conclusive that we made a historic mistake when we outsourced our
economic independence to rely for vital necessities upon nations that have never had America's
best interests at heart?
Which rings truer today? We are all part of mankind, all citizens of the world. Or that it's
time to put America and Americans first!
Patrick J. Buchanan is the author of Nixon's White House Wars: The Battles That Made
and Broke a President and Divided America Forever. To find out more about Patrick Buchanan and
read features by other Creators writers and cartoonists, visit the Creators website at
www.creators.com.
Which leaders have been speaking of ways to reverse the ways of globalism and how close are
they to obtaining power? This is going to require a changing of the elites fro mthe ones
who are and will continue to push this form of globalism to the ones that are willing to
switch to a new system.
(there will always be an elite. It's just a question of which ones you let wield power
as not all of them are the type that we carry.)
Unfortunately a ton of people are still espousing open borders globalism. This includes a
large number of visible elites, the vast majority, in fact.
The best thing that could happen is that those who espouse such dangerous ideas are held to
account by nature. Let them get sick with the Wu flu, let them be unable to attain
medication because China has restricted exports to us. Let's see what they think after they
have finally begun to experience the ramifications of their ideological thinking.
The elites will ALWAYS have access to medication they need. Most of them will NEVER
"experience ramifications" in any way more than minor inconveniences.
Considering that you can get from New York City to Tokyo in under 24 hours, and that there
are no major city on the Planet that cannot be reached from the lower forty-eight in under
48 hours, how do you intend to reverse globalism? Ban airplanes, telephones and the
internet-based communications?
Under neoliberalism inequality is recast as virtuous. The market ensures that everyone gets what they deserve: Neoliberalism sees competition as the defining characteristic of
human relations and redefines citizens as consumers
Notable quotes:
"... Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you'll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is? ..."
"... Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness , the collapse of ecosystems, the rise of Donald Trump . ..."
"... Inequality is recast as virtuous. The market ensures that everyone gets what they deserve. ..."
"... Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning. ..."
"... We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances. ..."
"... Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers. ..."
"... Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. ..."
"... It may seem strange that a doctrine promising choice should have been promoted with the slogan 'there is no alternative' ..."
"... Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating " investor-state dispute settlement ": offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes , protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre. ..."
"... Neoliberalism was not conceived as a self-serving racket, but it rapidly became one ..."
"... Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one. ..."
"... When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel . ..."
"... Those who own and run the UK's privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world's richest man. ..."
"... Financialisation, as Andrew Sayer notes in Why We Can't Afford the Rich , has had a similar impact. "Like rent," he argues, "interest is ... unearned income that accrues without any effort". ..."
"... Chris Hedges remarks that "fascist movements build their base not from the politically active but the politically inactive, the 'losers' who feel, often correctly, they have no voice or role to play in the political establishment". When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation . To the admirers of Trump, for example, facts and arguments appear irrelevant. ..."
"... Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities. ..."
"... The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch , two of the richest men in the world, founded the institute that set up the Tea Party movement . We find that Charles Koch, in establishing one of his thinktanks, noted that "in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised". ..."
"... The anonymity of neoliberalism is fiercely guarded. ..."
"... Neoliberalism's triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was ... nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years. ..."
"... What the history of both Keynesianism and neoliberalism show is that it's not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century. ..."
Financial meltdown, environmental disaster and even the rise of Donald Trump –
neoliberalism has played its part in them all. Why has the left failed to come up with an
alternative? @GeorgeMonbiot
Imagine if the people of the Soviet Union had never heard of communism. The ideology
that dominates our lives has, for most of us, no name. Mention it in conversation and you'll be
rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to
define it. Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. It has
played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8,
the offshoring of wealth and power, of which the Panama Papers offer us merely a
glimpse, the slow collapse of public health and education, resurgent child poverty, the
epidemic of loneliness , the collapse of ecosystems, the rise of Donald Trump . But we respond to these
crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had
– a name. What greater power can there be than to operate namelessly?
Inequality is recast as virtuous. The market ensures that
everyone gets what they deserve.
So pervasive has neoliberalism become that we seldom even
recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian
faith describes a neutral force; a kind of biological law, like Darwin's theory of evolution.
But the philosophy arose as a conscious attempt to reshape human life and shift the locus of
power.
Neoliberalism sees competition as the defining characteristic of
human relations. It redefines citizens as consumers, whose democratic choices are best
exercised by buying and selling, a process that rewards merit and punishes inefficiency. It
maintains that "the market" delivers benefits that could never be achieved by
planning.
Attempts to limit competition are treated as inimical to liberty.
Tax and regulation should be minimised, public services should be privatised. The organisation
of labour and collective bargaining by trade unions are portrayed as market
distortions that impede the formation of a natural hierarchy of winners and losers. Inequality
is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to
enrich everyone. Efforts to create a more equal society are both counterproductive and morally
corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich
persuade themselves that they acquired their wealth through merit, ignoring the advantages
– such as education, inheritance and class – that may have helped to secure it. The
poor begin to blame themselves for their failures, even when they can do little to change their
circumstances.
Never mind structural unemployment: if you don't have a job it's
because you are unenterprising. Never mind the impossible costs of housing: if your credit card
is maxed out, you're feckless and improvident. Never mind that your children no longer have a
school playing field: if they get fat, it's your fault. In a world governed by competition,
those who fall behind become defined and self-defined as losers.
Among the results, as Paul Verhaeghe documents in his book What
About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance
anxiety and social phobia. Perhaps it's unsurprising that Britain, in which neoliberal ideology
has been most rigorously applied, is
the loneliness capital of Europe . We are all neoliberals now.
***
The term neoliberalism was coined at a meeting in Paris in 1938.
Among the delegates were two men who came to define the ideology, Ludwig von Mises and
Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin
Roosevelt's New Deal and the gradual development of Britain's welfare state, as manifestations
of a collectivism that occupied the same spectrum as nazism and communism.
In The Road to Serfdom , published in 1944, Hayek argued
that government planning, by crushing individualism, would lead inexorably to totalitarian
control. Like Mises's book Bureaucracy , The Road to Serfdom was widely read. It
came to the attention of some very wealthy people, who saw in the philosophy an opportunity to
free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation
that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by
millionaires and their foundations.
As it evolved, neoliberalism became more strident. Hayek's view
that governments should regulate competition to prevent monopolies from forming gave way
– among American apostles such as Milton Friedman
– to the belief that monopoly power could be seen as a reward for efficiency.
Something else happened during this transition: the movement lost
its name. In 1951, Friedman was happy to describe
himself as a neoliberal . But soon after that, the term began to disappear. Stranger still,
even as the ideology became crisper and the movement more coherent, the lost name was not
replaced by any common alternative.
At first, despite its lavish funding, neoliberalism remained at
the margins. The postwar consensus was almost universal: John Maynard Keynes 's economic
prescriptions were widely applied, full employment and the relief of poverty were common goals
in the US and much of western Europe, top rates of tax were high and governments sought social
outcomes without embarrassment, developing new public services and safety nets.
But in the 1970s, when Keynesian policies began to fall apart and
economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the
mainstream. As Friedman remarked, "when the time came that you had to change ... there was an
alternative ready there to be picked up". With the help of sympathetic journalists and
political advisers, elements of neoliberalism, especially its prescriptions for monetary
policy, were adopted by Jimmy Carter's administration in the US and Jim Callaghan's government
in Britain.
It may seem strange that a doctrine promising choice should have
been promoted with the slogan 'there is no alternative'
After Margaret Thatcher and Ronald Reagan took power, the rest of
the package soon followed: massive tax cuts for the rich, the crushing of trade unions,
deregulation, privatisation, outsourcing and competition in public services. Through the IMF,
the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies
were imposed – often without democratic consent – on much of the world. Most
remarkable was its adoption among parties that once belonged to the left: Labour and the
Democrats, for example. As Stedman Jones notes, "it is hard to think of another utopia to have
been as fully realised."
***
It may seem strange that a doctrine promising choice and freedom
should have been promoted with the slogan "there is no alternative". But, as Hayek remarked on a
visit to Pinochet's Chile – one of the first nations in which the programme was
comprehensively applied – "my personal preference leans toward a liberal dictatorship
rather than toward a democratic government devoid of liberalism". The freedom that
neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to
mean freedom for the pike, not for the minnows.
Freedom from trade unions and collective bargaining means the
freedom to suppress wages. Freedom from regulation means the
freedom to poison rivers , endanger workers, charge iniquitous rates of interest and design
exotic financial instruments. Freedom from tax means freedom from the distribution of wealth
that lifts people out of poverty.
Facebook
Twitter Pinterest Naomi Klein documented that neoliberals advocated the use of crises to
impose unpopular policies while people were distracted. Photograph: Anya Chibis/The
Guardian
As Naomi Klein documents in The Shock Doctrine ,
neoliberal theorists advocated the use of crises to impose unpopular policies while people were
distracted: for example, in the aftermath of Pinochet's coup, the Iraq war and Hurricane
Katrina, which Friedman described as "an opportunity to radically reform the educational
system" in New Orleans
.
Where neoliberal policies cannot be imposed domestically, they are
imposed internationally, through trade treaties incorporating "
investor-state dispute settlement ": offshore tribunals in which corporations can press for
the removal of social and environmental protections. When parliaments have voted to restrict
sales of cigarettes ,
protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical
firms from ripping off the state, corporations have sued, often successfully. Democracy is
reduced to theatre.
Neoliberalism was not conceived as a self-serving racket, but it
rapidly became one
Another paradox of neoliberalism is that universal competition
relies upon universal quantification and comparison. The result is that workers, job-seekers
and public services of every kind are subject to a pettifogging, stifling regime of assessment
and monitoring, designed to identify the winners and punish the losers. The doctrine that Von
Mises proposed would free us from the bureaucratic nightmare of central planning has instead
created one.
Neoliberalism was not conceived as a self-serving racket, but it
rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980
in Britain and the US) than it was in the preceding decades; but not for the very rich.
Inequality in the distribution of both income and wealth, after 60 years of decline, rose
rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents,
privatisation and deregulation.
The privatisation or marketisation of public services such as
energy, water, trains, health, education, roads and prisons has enabled corporations to set up
tollbooths in front of essential assets and charge rent, either to citizens or to government,
for their use. Rent is another term for unearned income. When you pay an inflated price for a
train ticket, only part of the fare compensates the operators for the money they spend on fuel,
wages, rolling stock and other outlays. The rest reflects the fact that
they have you over a barrel .
In Mexico, Carlos Slim was granted control of almost all phone services
and soon became the world's richest man. Photograph: Henry Romero/Reuters
Those who own and run the UK's privatised or semi-privatised
services make stupendous fortunes by investing little and charging much. In Russia and India,
oligarchs acquired state assets through firesales. In Mexico,
Carlos Slim was granted control of almost all landline and mobile phone services and soon
became the world's richest man.
Financialisation, as Andrew Sayer notes in Why We Can't Afford the
Rich , has had a similar impact. "Like rent," he argues, "interest is ... unearned
income that accrues without any effort". As the poor become poorer and the rich become richer,
the rich acquire increasing control over another crucial asset: money. Interest payments,
overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the
withdrawal of state funding load people with debt (think of the switch from student grants to
student loans), the banks and their executives clean up.
Sayer argues that the past four decades have been characterised by
a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy:
from those who make their money by producing new goods or services to those who make their
money by controlling existing assets and harvesting rent, interest or capital gains. Earned
income has been supplanted by unearned income.
Neoliberal policies are everywhere beset by market failures. Not
only are the banks too big to fail, but so are the corporations now charged with delivering
public services. As Tony Judt pointed out in Ill Fares the
Land , Hayek forgot that vital national services cannot be allowed to collapse, which
means that competition cannot run its course. Business takes the profits, the state keeps the
risk.
The greater the failure, the more extreme the ideology becomes.
Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise
remaining public services, rip holes in the social safety net, deregulate corporations and
re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public
sector.
Perhaps the most dangerous impact of neoliberalism is not the
economic crises it has caused, but the political crisis. As the domain of the state is reduced,
our ability to change the course of our lives through voting also contracts. Instead,
neoliberal theory asserts, people can exercise choice through spending. But some have more to
spend than others: in the great consumer or shareholder democracy, votes are not equally
distributed. The result is a disempowerment of the poor and middle. As parties of the right and
former left adopt
similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of
people have been shed from politics.
Chris Hedges
remarks that "fascist movements build their base not from the politically active but the
politically inactive, the 'losers' who feel, often correctly, they have no voice or role to
play in the political establishment". When political debate no longer speaks to us, people
become responsive instead
to slogans, symbols and sensation . To the admirers of Trump, for example, facts and
arguments appear irrelevant.
Judt explained that when the thick mesh of interactions between
people and the state has been reduced to nothing but authority and obedience, the only
remaining force that binds us is state power. The totalitarianism Hayek feared is more likely
to emerge when governments, having lost the moral authority that arises from the delivery of
public services, are reduced to "cajoling, threatening and ultimately coercing people to obey
them".
***
Like communism, neoliberalism is the God that failed. But the
zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of
anonymities.
The invisible doctrine of the invisible hand is promoted by
invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them.
We find that the Institute of Economic Affairs, which has argued forcefully in the media
against the further regulation of the tobacco industry,
has been secretly funded by British American Tobacco since 1963. We discover that
Charles and David
Koch , two of the richest men in the world, founded the institute that set up the
Tea
Party movement . We find that Charles Koch, in establishing one of his thinktanks,
noted that "in order
to avoid undesirable criticism, how the organisation is controlled and directed should not be
widely advertised".
The nouveau riche were once disparaged by those who had
inherited their money. Today, the relationship has been reversed
The words used by neoliberalism often conceal more than they
elucidate. "The market" sounds like a natural system that might bear upon us equally, like
gravity or atmospheric pressure. But it is fraught with power relations. What "the market
wants" tends to mean what corporations and their bosses want. "Investment", as Sayer notes,
means two quite different things. One is the funding of productive and socially useful
activities, the other is the purchase of existing assets to milk them for rent, interest,
dividends and capital gains. Using the same word for different activities "camouflages the
sources of wealth", leading us to confuse wealth extraction with wealth creation.
A century ago, the nouveau riche were disparaged by those who had
inherited their money. Entrepreneurs sought social acceptance by passing themselves off as
rentiers. Today, the relationship has been reversed: the rentiers and inheritors style
themselves entre preneurs. They claim to have earned their unearned income.
These anonymities and confusions mesh with the namelessness and
placelessness of modern capitalism: the franchise model which ensures that workers do not know for
whom they toil ; the companies registered through a network of offshore secrecy regimes so
complex that even the
police cannot discover the beneficial owners ; the tax arrangements that bamboozle
governments; the financial products no one understands.
The anonymity of neoliberalism is fiercely guarded. Those who are
influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some
justice – that it is used today only pejoratively . But they
offer us no substitute. Some describe themselves as classical liberals or libertarians, but
these descriptions are both misleading and curiously self-effacing, as they suggest that there
is nothing novel about The Road to Serfdom , Bureaucracy or Friedman's classic
work, Capitalism and Freedom .
***
For all that, there is something admirable about the neoliberal
project, at least in its early stages. It was a distinctive, innovative philosophy promoted by
a coherent network of thinkers and activists with a clear plan of action. It was patient and
persistent. The Road to Serfdom became the path to power.
Neoliberalism, Locke and the Green party |
Letters Read more
Neoliberalism's triumph also reflects the failure of the left.
When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive
economic theory to replace it. When Keynesian demand management hit the buffers in the 70s,
there was an alternative ready. But when neoliberalism fell apart in 2008 there was ...
nothing. This is why the zombie walks. The left and centre have produced no new general
framework of economic thought for 80 years.
Every invocation of Lord Keynes is an admission of failure. To
propose Keynesian solutions to the crises of the 21st century is to ignore three obvious
problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not
gone away; and, most importantly, they have nothing to say about our gravest predicament: the
environmental crisis. Keynesianism works by stimulating consumer demand to promote economic
growth. Consumer demand and economic growth are the motors of environmental
destruction.
What the history of both Keynesianism and neoliberalism show is
that it's not enough to oppose a broken system. A coherent alternative has to be proposed. For
Labour, the Democrats and the wider left, the central task should be to develop an economic
Apollo programme, a conscious attempt to design a new system, tailored to the demands of the
21st century.
George Monbiot's How Did We Get into This Mess? is
published this month by Verso. To order a copy for £12.99 (RRP £16.99) ) go to
bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online
orders only. Phone orders min p&p of £1.99.
At international arrivals in Atlanta, the overwhelmingly black TSA staff are not taking
temps by infrared or taking any pro active measures. If they are, it was hidden from me. It
seems- obtuse- to constantly harp on the catastrophe that is AA hires- but there it is.
Its the busiest airport in the world, BTW.
A sinister side note; Delta offered me an $83 upgrade for first class when I went in to
delay another trip. It's a $6000 ticket to fly first class. My total would have been a little
over $500. Dangling the carrot as everyone cancels.
One day, Americans will fully understand , with horrible consequences, that not every
single human transaction must revolve around making a few people obscenely rich.
re ... Your house foreclosed upon by shady bank: naked capitalism, .0001% paid on interest
savings: naked capitalism, poor wages: naked capitalism, dangerous workplace: naked
capitalism, etc. ...
"naked capitalism" is not a clear description. Consider using "predatory capitalism",
which clearly describes what it is.
Here's the Wiki dictionary definition:
Predatory--
1. relating to or denoting an animal or animals preying naturally on others.
synonyms: predacious, carnivorous, hunting, raptorial, ravening;
Example: "predatory birds".
2. seeking to exploit or oppress others.
synonyms: exploitative, wolfish, rapacious, greedy, acquisitive, avaricious
Example: "I could see a predatory gleam in his eyes"
Note where the word comes from:
The Latin "praedator", in English meaning "plunderer".
And "plunderer" helps the reader understand and perhaps recognize what is happening.
In "One-Dimensional Man , " Marcuse revealed the fundamental truth of modern Western
capitalism: "Under the rule of a repressive whole, liberty can be made into a powerful
instrument of domination . Free election of masters does not abolish the masters or the slaves.
Free choice among a wide variety of goods and services does not signify freedom if these goods
and services sustain social controls over a life of toil and fear -- that is, if they sustain
alienation." It does not matter at all whether millions of people recognize their alienation,
often blissfully unaware that their "needs" are not their own but merely produced through their
superficially pleasant submission. The corporate state continues largely unchallenged.
This was an outright declaration of "class war" against working-class voters by a
"university-credentialed overclass" -- "managerial elite" which changed sides and allied with
financial oligrchy. See "The New Class War: Saving Democracy from the Managerial Elite" by
Michael Lind
Notable quotes:
"... By canceling the class compromise that governed the capitalist societies after World War II, the neoliberal elite saws the seed of the current populist backlash. The "soft neoliberal" backbone of the Democratic Party (Clinton wing) were incapable of coming to terms with Hillary Clinton's defeat -- the rejection of the establishment candidate by the US population and first of all by the working class. The result has been the neo-McCarthyism campaign and the attempt to derail Trump via color revolution spearheaded by Brennan-Obama factions in CIA and FBI. ..."
It looks like Bloomberg is finished. He just committed political suicide with his comments
about farmers and metal workers.
BTW Bloomberg's plan is highly hypocritical -- like is Bloomberg himself.
During the stagflation crisis of the 1970s, a "neoliberal revolution from above" was
staged in the USA by "managerial elite" which like Soviet nomenklatura (which also staged a
neoliberal coup d'état) changed sides and betrayed the working class.
So those neoliberal scoundrels reversed the class compromise embodied in the New Deal.
The most powerful weapon in the arsenal of the neoliberal managerial class and financial
oligarchy who got to power via the "Quiet Coup" was the global labor arbitrage in which
production is outsourced to countries with lower wage levels and laxer regulations.
So all those "improving education" plans are, to a large extent, the smoke screen over the
fact that the US workers now need to compete against highly qualified and lower cost
immigrants and outsourced workforce.
The fact is that it is very difficult to find for US graduates in STEM disciplines a
decent job, and this is by design.
Also, after the "Reagan neoliberal revolution" ( actually a coup d'état ), profits
were maximized by putting downward pressure on domestic wages through the introduction of the
immigrant workforce (the collapse of the USSR helped greatly ). They push down wages and
compete for jobs with their domestic counterparts, including the recent graduates. So the
situation since 1991 was never too bright for STEM graduates.
By canceling the class compromise that governed the capitalist societies after World War
II, the neoliberal elite saws the seed of the current populist backlash. The "soft
neoliberal" backbone of the Democratic Party (Clinton wing) were incapable of coming to terms
with Hillary Clinton's defeat -- the rejection of the establishment candidate by the US
population and first of all by the working class. The result has been the neo-McCarthyism
campaign and the attempt to derail Trump via color revolution spearheaded by Brennan-Obama
factions in CIA and FBI.
See also recently published "The New Class War: Saving Democracy from the Managerial
Elite" by Michael Lind.
One of his quotes:
The American oligarchy spares no pains in promoting the belief that it does not exist,
but the success of its disappearing act depends on equally strenuous efforts on the part of
an American public anxious to believe in egalitarian fictions and unwilling to see what is
hidden in plain sight.
"... To writer Michael Lind, Trump's victory, along with Brexit and other populist stirrings in Europe, was an outright declaration of "class war" by alienated working-class voters against what he calls a "university-credentialed overclass" of managerial elites. ..."
"... Lind cautions against a turn to populism, which he believes to be too personality-centered and intellectually incoherent -- not to mention, too demagogic -- to help solve the terminal crisis of "technocratic neoliberalism" with its rule by self-righteous and democratically unaccountable "experts" with hyperactive Twitter handles. Only a return to what Lind calls "democratic pluralism" will help stem the tide of the populist revolt. ..."
"... Many on the left have been incapable of coming to terms with Hillary Clinton's defeat. The result has been the stifling climate of a neo-McCarthyism, in which the only explanation for Trump's success was an unholy alliance of "Putin stooges" and unrepentant "white supremacists." ..."
"... To Lind, the case is much more straightforward: while the vast majority of Americans supports Social Security spending and containing unskilled immigration, the elites of the bipartisan swamp favor libertarian free trade policies combined with the steady influx of unskilled migrants to help suppress wage levels in the United States. Trump had outflanked his opponents in the Republican primaries and Clinton in the general election by tacking left on the economy (he refused to lay hands on Social Security) and right on immigration. ..."
"... Then, in the 1930s, while the world was writhing from the consequences of the Great Depression, a series of fascist parties took the reigns in countries from Germany to Spain. To spare the United States a similar descent into barbarism, President Franklin D. Roosevelt implemented the New Deal, in which the working class would find a seat at the bargaining table under a government-supervised tripartite system where business and organized labor met seemingly as equals and in which collective bargaining would help the working class set sector-wide wages. ..."
"... This class compromise ruled unquestioned for the first decades of the postwar era. It was made possible thanks to the system of democratic pluralism, which allowed working-class and rural constituencies to actively partake in mass-membership organizations like unions as well as civic and religious institutions that would empower these communities to shape society from the ground up. ..."
"... But then, amid the stagflation crisis of the 1970s, a "neoliberal revolution from above" set in that sought to reverse the class compromise. The most powerful weapon in the arsenal of the newly emboldened managerial class was "global labor arbitrage" in which production is outsourced to countries with lower wage levels and laxer regulations; alternatively, profits can be maximized by putting downward pressure on domestic wages through the introduction of an unskilled, non-unionized immigrant workforce that competes for jobs with its unionized domestic counterparts. By one-sidedly canceling the class compromise that governed the capitalist societies after World War II, Lind concludes, the managerial elite had brought the recent populist backlash on itself. ..."
"... American parties are not organized parties built around active members and policy platforms; they are shifting coalitions of entrepreneurial candidate campaign organizations. Hence, the Democratic and Republican Parties are not only capitalist ideologically; they are capitalistically run enterprises. ..."
"... In the epigraph to the book, Lind cites approvingly the 1949 treatise The Vital Center by historian Arthur Schlesinger Jr. who wrote that "class conflict, pursued to excess, may well destroy the underlying fabric of common principle which sustains free society." Schlesinger was just one among many voices who believed that Western societies after World War II were experiencing the "end of ideology." From now on, the reasoning went, the ideological battles of yesteryear were settled in favor of a more disinterested capitalist (albeit New Deal–inflected) governance. This, in turn, gave rise to the managerial forces in government, the military, and business whose unchecked hold on power Lind laments. The midcentury social-democratic thinker Michael Harrington had it right when he wrote that "[t]he end of ideology is a shorthand way of saying the end of socialism." ..."
"... A cursory glance at the recent impeachment hearings bears witness to this, as career bureaucrats complained that President Trump unjustifiably sought to change the course of an American foreign policy that had been nobly steered by them since the onset of the Cold War. In their eyes, Trump, like the Brexiteers or the French yellow vest protesters, are vulgar usurpers who threaten the stability of the vital center from polar extremes. ..."
A FEW DAYS AFTER Donald Trump's electoral upset in 2016, Club for Growth co-founder Stephen
Moore told an
audience of Republican House members that the GOP was "now officially a Trump working class
party." No longer the party of traditional Reaganite conservatism, the GOP had been converted
instead "into a populist America First party." As he uttered these words, Moore says, "the
shock was palpable" in the room.
The Club for Growth had long dominated Republican orthodoxy by promoting low tax rates and
limited government. Any conservative candidate for political office wanting to reap the
benefits of the Club's massive fundraising arm had to pay homage to this doctrine. For one of
its formerly leading voices to pronounce the transformation of this orthodoxy toward a more
populist nationalism showed just how much the ground had shifted on election night.
To writer Michael Lind, Trump's victory, along with Brexit and other populist stirrings
in Europe, was an outright declaration of "class war" by alienated working-class voters against
what he calls a "university-credentialed overclass" of managerial elites. The title of
Lind's new book, The New Class War: Saving Democracy from the Managerial Elite ,
leaves no doubt as to where his sympathies lie, though he's adamant that he's not some sort of
guru for a " smarter
Trumpism ," as some have labeled him.
Lind cautions against a turn to populism, which he believes to be too
personality-centered and intellectually incoherent -- not to mention, too demagogic -- to help
solve the terminal crisis of "technocratic neoliberalism" with its rule by self-righteous and
democratically unaccountable "experts" with hyperactive Twitter handles. Only a return to what
Lind calls "democratic pluralism" will help stem the tide of the populist revolt.
The New Class War is a breath of fresh air. Many on the left have been incapable of
coming to terms with Hillary Clinton's defeat. The result has been the stifling climate of a
neo-McCarthyism, in which the only explanation for Trump's success was an unholy alliance of
"Putin stooges" and unrepentant "white supremacists."
To Lind, the case is much more
straightforward: while the vast majority of Americans supports Social Security spending and
containing unskilled immigration, the elites of the bipartisan swamp favor libertarian free
trade policies combined with the steady influx of unskilled migrants to help suppress wage
levels in the United States. Trump had outflanked his opponents in the Republican primaries and
Clinton in the general election by tacking left on the economy (he refused to lay hands on
Social Security) and right on immigration.
The strategy has since been successfully repeated in the United Kingdom by Boris Johnson,
and it looks, for now, like a foolproof way for conservative parties in the West to capture or
defend their majorities against center-left parties that are too beholden to wealthy,
metropolitan interests to seriously attract working-class support. Berating the latter as
irredeemably racist certainly doesn't help either.
What happened in the preceding decades to produce this divide in Western democracies? Lind's
narrative begins with the New Deal, which had brought to an end what he calls "the first class
war" in favor of a class compromise between management and labor. This first class war is the
one we are the most familiar with: originating in the Industrial Revolution, which had produced
the wretchedly poor proletariat, it soon led to the rise of competing parties of organized
workers on the one hand and the liberal bourgeoisie on the other, a clash that came to a head
in the Bolshevik Revolution of 1917. Then, in the 1930s, while the world was writhing from the
consequences of the Great Depression, a series of fascist parties took the reigns in countries
from Germany to Spain. To spare the United States a similar descent into barbarism, President
Franklin D. Roosevelt implemented the New Deal, in which the working class would find a seat at
the bargaining table under a government-supervised tripartite system where business and
organized labor met seemingly as equals and in which collective bargaining would help the
working class set sector-wide wages.
This class compromise ruled unquestioned for the first decades of the postwar era. It was
made possible thanks to the system of democratic pluralism, which allowed working-class and
rural constituencies to actively partake in mass-membership organizations like unions as well
as civic and religious institutions that would empower these communities to shape society from
the ground up.
But then, amid the stagflation crisis of the 1970s, a "neoliberal revolution from above" set
in that sought to reverse the class compromise. The most powerful weapon in the arsenal of the
newly emboldened managerial class was "global labor arbitrage" in which production is
outsourced to countries with lower wage levels and laxer regulations; alternatively, profits
can be maximized by putting downward pressure on domestic wages through the introduction of an
unskilled, non-unionized immigrant workforce that competes for jobs with its unionized domestic
counterparts. By one-sidedly canceling the class compromise that governed the capitalist
societies after World War II, Lind concludes, the managerial elite had brought the recent
populist backlash on itself.
Likewise, only it can contain this backlash by returning to the bargaining table and
reestablishing the tripartite system it had walked away from. According to Lind, the new class
peace can only come about on the level of the individual nation-state because transnational
treaty organizations like the EU cannot allow the various national working classes to escape
the curse of labor arbitrage. This will mean that unskilled immigration will necessarily have
to be curbed to strengthen the bargaining power of domestic workers. The free-market orthodoxy
of the Club for Growth will also have to take a backseat, to be replaced by government-promoted
industrial strategies that invest in innovation to help modernize their national economies.
Under which circumstances would the managerial elites ever return to the bargaining table?
"The answer is fear," Lind suggests -- fear of working-class resentment of hyper-woke,
authoritarian elites. Ironically, this leaves all the agency with the ruling class, who first
acceded to the class compromise, then canceled it, and is now called on to forge a new one lest
its underlings revolt.
Lind rightly complains all throughout the book that the old mass-membership based
organizations of the 20th century have collapsed. He's coy, however, about who would
reconstitute them and how. At best, Lind argues for a return to the old system where party
bosses and ward captains served their local constituencies through patronage, but once more
this leaves the agency with entities like the Republicans and Democrats who have a combined
zero members. As the third-party activist Howie Hawkins remarked cunningly elsewhere ,
American parties are not organized parties built around active members and policy platforms;
they are shifting coalitions of entrepreneurial candidate campaign organizations. Hence, the
Democratic and Republican Parties are not only capitalist ideologically; they are
capitalistically run enterprises.
Thus, they would hardly be the first options one would think of to reinvigorate the forces
of civil society toward self-rule from the bottom up.
The key to Lind's fraught logic lies hidden in plain sight -- in the book's title. Lind does
not speak of "class struggle ," the heroic Marxist narrative in which an organized
proletariat strove for global power; no, "class war " smacks of a gloomy, Hobbesian
war of all against all in which no side truly stands to win.
In the epigraph to the book, Lind cites approvingly the 1949 treatise The Vital
Center by historian Arthur Schlesinger Jr. who wrote that "class conflict, pursued to
excess, may well destroy the underlying fabric of common principle which sustains free
society." Schlesinger was just one among many voices who believed that Western societies after
World War II were experiencing the "end of ideology." From now on, the reasoning went, the
ideological battles of yesteryear were settled in favor of a more disinterested capitalist
(albeit New Deal–inflected) governance. This, in turn, gave rise to the managerial forces
in government, the military, and business whose unchecked hold on power Lind laments. The
midcentury social-democratic thinker Michael Harrington had it right when he wrote that "[t]he
end of ideology is a shorthand way of saying the end of socialism."
Looked at from this perspective, the break between the postwar Fordist regime and
technocratic neoliberalism isn't as massive as one would suppose. The overclass antagonists of The New Class War believe that they derive their power from the same "liberal order"
of the first-class peace that Lind upholds as a positive utopia. A cursory glance at the recent
impeachment hearings bears witness to this, as career bureaucrats complained that President
Trump unjustifiably sought to change the course of an American foreign policy that had been
nobly steered by them since the onset of the Cold War. In their eyes, Trump, like the Brexiteers or the French yellow vest protesters, are vulgar usurpers who threaten the stability
of the vital center from polar extremes.
A more honest account of capitalism would also acknowledge its natural tendencies to
persistently contract and to disrupt the social fabric. There is thus no reason to believe why
some future class compromise would once and for all quell these tendencies -- and why
nationalistically operating capitalist states would not be inclined to confront each other
again in war.
Reagan was a free-trader and a union buster. Lind's people jumped the Democratic ship
to vote for Reagan in (lemming-like) droves. As Republicans consolidated power over labor
with cheap goods from China and the meth of deficit spending Democrats struggled with
being necklaced as the party of civil rights.
The idea that people who are well-informed ought not to govern is a sad and sick cover
story that the culpable are forced to chant in their caves until their days are done, the
reckoning being too great.
Freedom in the neo-liberal lexicon means freedom of the strong to predate on the weak. Free
Trade is a particular example of this. A rational person must expect the UK to be brutally
savaged in dealing with the EU, US and China.
@1, It is true that at present not having a Mediterranean coast is an advantage. But an
optimist might hope that the defeat of the US in Eurasia will bring new peace along the Belt
and Road, and Africa and the ME will see the greatest boom.
Human. Beings. Doing Earth Life. There is no separation in our species, except that, a
disconnect occurred. Who, When, What, Where, and How did the disconnect become an all
powerful power? Acting as though the species Human isn't. The tap root "dis~ease"
(disconnect) must be eradicated/ healed/ rejoining our species into oneness, again.
Top~bottom junk yard dogs is barbaric.
Posted by: charliechan | Jan 30 2020 19:36 utc | 85
An excellent question, "who benefits", clearly it's not everybody. "Profitable for whom",
"rights for whom", "safe for whom", "justice for whom". If the answer is not "everybody",
it's bullshit. What's good for corporations is not what is good for people. We are infested
with economic parasites who blather on about how they are taking "care" of us and giving us
"choices".
"... Yet it took until 1860 for the UK to fully embrace free trade, and even then the unpalatable historical record is that during this 'golden age', the British: Destroyed the Indian textile industry to benefit their own cloth manufacturers; Started the Opium Wars to balance UK-China trade by selling China addictive drugs; Ignored the Irish Potato Famine and continued to allow Irish wheat exports; Forced Siam (Thailand) to open up its economy to trade with gunboats (as the US did with Japan); and Colonized much of Africa and Asia. ..."
"... Regardless, the first flowering of free trade collapsed back into nationalism and protectionism - bloodily so in 1914. Free trade was tried again from 1919 - but burned-out even more bloodily in the 1930s and 1940s. After WW2, most developed countries had moderately free trade - but most developing countries did not. We only started to re-embrace global free trade from the 1990s onwards when the Cold War ended – and here it is under stress again. In short, only around 100 years in a total of 5,000 years of civilization has seen real global free trade, it has failed twice already, and it is once again coming under pressure. ..."
"... Of course, this doesn't mean liked-minded groups of countries with similar-enough or sympathetic-enough economies and politics should avoid free trade: clearly for some states it can work out nicely - even if within the EU one could argue there are also underlying strains. However, it is a huge stretch to assume a one-size-fits-all free trade policy will always work best for all countries, as some would have it. That is a fairy tale. History shows it wasn't the case; national security concerns show it can never always be the case; and Ricardo argues this logically won't be the case. ..."
"When I used to read fairy tales, I fancied that kind of thing never happened, and now here I am in the middle of one!" (Alice
in Wonderland, Chapter 4, The Rabbit Sends in a Little Bill)
Submitted by Michael Every of Rabobank
2020 starts with markets feeling optimistic due to a US-China trade deal and a reworked NAFTA in the form of the USMCA. However,
the tide towards protectionism may still be coming in, not going out.
The intellectual appeal of the basis for free trade, Ricardo's theory of comparative advantage, where Portugal specializes in
wine, and the UK in cloth, is still clearly there. Moreover, trade has always been a beneficial and enriching part of human culture.
Yet the fact is that for the majority of the last 5,000 years global trade has been highly-politicized and heavily-regulated . Indeed,
global free-trade only began following the abolition of the UK Corn Laws in 1846, which reduced British agricultural tariffs, brought
in European wheat and corn, and allowed the UK to maximize its comparative advantage in industry.
Yet it took until 1860 for the UK to fully embrace free trade, and even then the unpalatable historical record is that during
this 'golden age', the British:
Destroyed the Indian textile industry to benefit their own cloth manufacturers;
Started the Opium Wars to balance UK-China trade by selling China addictive drugs;
Ignored the Irish Potato Famine and continued to allow Irish wheat exports;
Forced Siam (Thailand) to open up its economy to trade with gunboats (as the US did with Japan); and
Colonized much of Africa and Asia.
As we showed back in '
Currency
and Wars ', after an initial embrace of free trade, the major European powers and Japan saw that their relative comparative advantage
meant they remained at the bottom of the development ladder as agricultural producers, an area where prices were also being depressed
by huge US output; meanwhile, the UK sold industrial goods, ran a huge trade surplus, and ruled the waves militarily. This was politically
unsustainable even though the UK vigorously backed the intellectual concept of free trade given it was such a winner from it.
Regardless, the first flowering of free trade collapsed back into nationalism and protectionism - bloodily so in 1914. Free
trade was tried again from 1919 - but burned-out even more bloodily in the 1930s and 1940s. After WW2, most developed countries had
moderately free trade - but most developing countries did not. We only started to re-embrace global free trade from the 1990s onwards
when the Cold War ended – and here it is under stress again. In short, only around 100 years in a total of 5,000 years of civilization
has seen real global free trade, it has failed twice already, and it is once again coming under pressure.
What are we getting wrong? Perhaps that Ricardo's theory has major flaws that don't get included in our textbooks, as summarized
in this overlooked quote
"It would undoubtedly be advantageous to the capitalists of England [that] the wine and cloth should both be made in Portugal
[and that] the capital and labour of England employed in making cloth should be removed to Portugal for that purpose." Which is pretty
much what happens today! However, Ricardo adds that this won't happen because "Most men of property [will be] satisfied with a low
rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations," which
is simply not true at all! In other words, his premise is flawed in that:
It is atemporal in assuming countries move to their comparative advantage painlessly and instantly;
It assumes full employment when if there is unemployment a country is better off producing at home to reduce it, regardless
of higher cost;
It assumes capital between countries is immobile , i.e., investors don't shift money and technology abroad. (Which Adam Smith's
'Wealth of Nations', Book IV, Chapter II also assumes doesn't happen, as an "invisible hand" keeps money invested in one's home
country's industry and not abroad: we don't read him correctly either.);
It assumes trade balances under free trade - but since when has this been true? Rather we see large deficits and inverse capital
flows, and so debts steadily increasing in deficit countries;
It assumes all goods are equal as in Ricardo's example, cloth produced in the UK and wine produced in Portugal are equivalent.
Yet some sectors provide well-paid and others badly-paid employment: why only produce the latter?
As Ricardo's theory requires key conditions that are not met in reality most of the time, why are we surprised that most of reality
fails to produce idealised free trade most of the time? Several past US presidents before Donald Trump made exactly that point. Munroe
(1817-25) argued: " The conditions necessary for Free Trade's success - reciprocity and international peace - have never occurred
and cannot be expected ". Grant (1869-77) noted "Within 200 years, when America has gotten out of protection all that it can offer,
it too will adopt free trade".
Yet arguably we are better, not worse, off regardless of these sentiments – so hooray! How so? Well, did you know that Adam Smith,
who we equate with free markets, and who created the term "mercantile system" to describe the national-protectionist policies opposed
to it, argued the US should remain an agricultural producer and buy its industrial goods from the UK? It was Founding Father Alexander
Hamilton who rejected this approach, and his "infant industry" policy of industrialization and infrastructure spending saw the US
emerge as the world's leading economy instead. That was the same development model that, with tweaks, was then adopted by pre-WW1
Japan, France, and Germany to successfully rival the UK; and then post-WW2 by Japan (again) and South Korea; and then more recently
by China, that key global growth driver. Would we really be better off if the US was still mainly growing cotton and wheat, China
rice and apples, and the UK was making most of the world's consumer goods? Thank the lack of free trade if you think otherwise!
Yet look at the examples above and there is a further argument for more protectionism ahead. Ricardo assumes a benign global political
environment for free trade . Yet what if the UK and Portugal are rivals or enemies? What if the choice is between steel and wine?
You can't invade neighbours armed with wine as you can with steel! A large part of the trade tension between China and the US, just
as between pre-WW1 Germany and the UK, is not about trade per se: for both sides, it is about who produces key inputs with national
security implications - and hence is about relative power . This is why we hear US hawks underlining that they don't want to export
their highest technology to China, or to specialize only in agricultural exports to it as China moves up the value-chain. It also
helps underline why for most of the past 5,000 years trade has not been free. Indeed, this argument also holds true for the other
claimed benefit of free trade: the cross-flow of ideas and technology. That is great for friends, but not for those less trusted.
Of course, this doesn't mean liked-minded groups of countries with similar-enough or sympathetic-enough economies and politics
should avoid free trade: clearly for some states it can work out nicely - even if within the EU one could argue there are also underlying
strains. However, it is a huge stretch to assume a one-size-fits-all free trade policy will always work best for all countries, as
some would have it. That is a fairy tale. History shows it wasn't the case; national security concerns show it can never always be
the case; and Ricardo argues this logically won't be the case.
Yet we need not despair. The track record also shows that global growth can continue even despite protectionism, and in some cases
can benefit from it. That being said, should the US resort to more Hamiltonian policies versus everyone, not just China, then we
are in for real financial market turbulence ahead given the role the US Dollar plays today compared to the role gold played for Smith
and Ricardo! But that is a whole different fairy tale...
Financialization killed Boeing. All those MBA's who dreamed up outsourced supply-chains
for the Dreamliner. Thought they were going to make a lot of money through savings.
Silly rabbit MBA's... if you don't spend money? You don't make money.
MBA graduates are f*cking useless retards trained in only one system: FAILURE.
What sank McDonald Douglas - bought out by Boeing? Is the same bullsh*t that is ruining
Boeing. Boeing kept a lot of board member & management failures around from McDonald
Douglas. Poisoned the Boeing culture.
How many of you remember all the McDonald Douglas passenger jet success stories? There
wasnt any - the whole mgmt of MD was to to strip out every possible cost and maximize very
profit at the expense of the end customer and the government - and these are the guys who
bought Boeing - and then made the first step of moving the headquarters to chicago. Guess
which party gave lots and lots of government boondoggles to MD?
I had a Polish executive tell me how proud they were as they were about to hire an
American executive who graduated with an MBA.
That is, until I asked him... "Have you checked what happened to the previous companies
that he worked at?"
So the Polish executive did just that. This led to a ban on hiring any American MBA. Turns
out, the American MBA worked at companies, all of which FAILED.
Though, somehow, despite a track record of working at failed companies? The American was
still quite well off.
The ******* alternative you stupid ******* americunt is already in the air. They are
labelled Airbus A220 and A230, otherwise known as Bombardier CS200 and CS300 and they are
sold out 15 years in advance.
That was part of the problem. The parts from Boeing's foreign suppliers MET
SPECIFICATIONS.
That is, until they went to assemble the Dreamliner. Where parts did not fit together.
You see, Boeing found out LONG, LONG AGO... that it was necessary to have manufacturing
close to design. That way, when parts that "met specifications" did not fit? The engineers
and machinists were there to correct deficiencies. Thus leading to reliable planes that were
fit together very well. Only THEN could Boeing could assemble parts in other locations and
mate them together.
This never happened with the Dreamliner. Quadrupled costs. The Dreamliner only exists
thanks to taxpayer subsidies through the ExIm Bank. The Dreamliner WILL NEVER BE PROFITABLE.
Accounting gimmicks make it appear as if Boeing makes money on the Dreamliner.
Amazing that in less than a generation, we go from "if it's not Boeing, I'm not going" to
wondering what the next Boeing screw-up will be and how many will be killed as a result.
The existing 777 is a fantastic plane and, other than pilot error (Asiana at SFO), a
missile attack (Malaysia 17) and some unknown (but apparently not mechanical) issue (Malaysia
370), the 777 has been the safest plane around.
American executives are incentivized to manipulate their company's stock. So they squeeze
the workforce and cut everything to the bone. That's why Boeing, GM, and other household
names are crashing.
According to economist William Lazonick, Boeing spent $43.1 billion on stock buybacks
from 2013 to 2019, raising the company's stock price to a record high just 10 days before
the second crash of its 737 MAX. Boeing CEO Muilenburg collects most of his pay through
stock or compensation based on financial metrics. Yet the company reportedly avoided
spending the estimated $7 billion it would have needed to engineer a safer plane. Less than
10 years after a public sector bailout, GM has spent $10.6 billion on stock buybacks, while
engaging in layoffs and plant closures. That amounts to $221,308 for each of the 47,897
active UAW members currently on strike at GM. Walmart spent $9.2 billion on stock buybacks
from August 2018 to July 2019, which, by my calculations, could have been used to give a
raise of roughly $5/ hour to each of its 1 million hourly workers instead.
Boeing should have been spending all its supposed profits on R&D. The other problem is
the military side of the business is grossly corrupt. Remember the blowup over Air Force
1?
This is what happens when the Federal Reserve lets the financial cat out the bag, and pump
up the stock market to the tune of 35-60 billion every 3 days, because some hedge funds
"could" fail and topple the financial system.
If multiple entities are now too important and could topple the financial system if they
failed, the Fed has massively screwed up.
In 1991 a Boeing purchaser told me that he would give us a contract if we transferred 51%
of the shares to a minority.
This is God's truth
He added that when he could not find minority businesses that would make components
according to specifications, he would buy stuff from minority owned businesses and not use it
but store it in warehouses around the country indefinitely. this in order to meet a quota of
20% purchases from minority owned businesses mandated by the Feds for all government
suppliers.
I can just imagine how bad the discrimination is now.
These are politically connected animals who feed from the trough of government pork barrel
a.k.a taxpayer money. Exactly what has Nikki Haley achieved in her life, except for being a
pathological liar?
These animals were responsible for our reckless fiscal deficits and looming debt bombs
which will soon come crashing down. Kinda good metaphor for Boeing.
All former CFOs and politicians ( civilian and military - only political types in the
military get stars ). No evidence of any engineering expertise. Sad for a once-proud global
leader.
In the "investor economy", there is no morality. EVERYTHING is "commoditized". Even you ..
your DNA. A pricetag hovers over your head like a dialog bubble. Bean counters can
incorporate your morbidity and mortality into mathematical equations showing investors why
cutting costs and saving 0.01% is worthy of investment. While 911 was the paradigm shift for
Rights ... the Lehman "crisis" was its own "911" -- the death of the labor economy ... and
rise of the "investor economy". Nobody works, trading time for dollars. They "invest" Why
work? Investors can kill without being held personally responsible. They only risk their fiat
capital. You die.
There is a lot of talk here and in comment sections at forums about how the American Empire
is going to collapse soon due to its blunders and Russia and China gaining military
superiority over it. This kind of talk is a type of magical thinking and has no basis in
reality. The United States' most potent weapon isn't military, it's economic, and through it
the US government controls the world. That weapon is the US Dollar and ever since Nixon took
it off the gold standard it has been used to further the Empire's imperial hold on the global
economy. The economist Michael Hudson in an article called A Note To China (link at
bottom) explains how this works:
The U.S. strategy is to control your economy in order to force you to sell your most
profitable industrial sectors to US investors, to force you to invest in your industry only
by borrowing from the United States.
So the question is, how do China, Russia, Iran and other countries break free of this
U.S. dollarization strategy?
There are a lot of articles on alt.media sites about how China and Russia are
de-dollarizing their economies in order to resist, and eventually end, the US domination of
the global economy that is preventing them from maintaining independent economic policies
that benefit their citizens rather than global elites and US central bankers.
Russia managed to put a stop to overt US economic imperialism after the looting spree in
the post-Soviet 1990s decimated Russia's ability to provide for its citizens and degraded the
country's ability to maintain economic independence. But it still ultimately got caught in
the neoliberal trap. Hudson again:
Yet Russia did not have enough foreign exchange to pay domestic ruble-wages or to pay for
domestic goods and services. But neoliberal advisors convinced Russia to back all Ruble
money or domestic currency credit it created by backing it with U.S. dollars. Obtaining
these dollars involved paying enormous interest to the United States for this needless
backing. There was no need for such backing. At the end of this road the United States
convinced Russia to sell off its raw materials, its nickel mines, its electric utilities,
its oil reserves, and ultimately tried to pry Crimea away from Russia.
China, Hudson argues, by accepting the advice of American and IMF/World Bank economic
"experts" and through Chinese students schooled in American universities in American
neoliberal theory is in great danger of falling into the same trap.
The U.S. has discovered that it does not have to militarily invade China. It does not have
to conquer China. It does not have to use military weapons, because it has the intellectual
weapon of financialization, convincing you that you need to do this in order to have a
balanced economy. So, when China sends its students to the United States, especially when
it sends central bankers and planners to the United States to study (and be recruited),
they are told by the U.S. "Do as we say, not as we have done."
He concludes that:
The neoliberal plan is not to make you independent, and not to help you grow except to the
extent that your growth will be paid to US investors or used to finance U.S. military
spending around the world to encircle you and trying to destabilize you in Sichuan to try
to pry China apart.
Look at what the United States has done in Russia, and at what the International
Monetary Fund in Europe has done to Greece, Latvia and the Baltic states. It is a dress
rehearsal for what U.S. diplomacy would like to do to you, if it can convince you to follow
the neoliberal US economic policy of financialization and privatization.
De-dollarization is the alternative to privatization and financialization.
Loosening the Empire's hold on economic and geopolitical affairs and moving to a
multipolar world order is a tough slog and the Empire will use everything it can to stop this
from happening. But at the moment even countries under American sanctions and surrounded by
its armies, with the possible exception of Iran, aren't really fighting back. That's a bitter
pill for many to swallow but wishful thinking isn't going to change the world. After all, the
new world has to be imagined before it can appear and right now it's still global capitalism
all the way down.
The article in full, and Hudson's work generally, is well worth reading. He is one of only
a few genuinely anti-imperialist economists and he is able to explain in layman's terms
exactly how the US-centric global economy is a massive scam designed to benefit US empire at
the rest of the world's expense.
I was thinking about
winston2's comment in the previous thread. A good way for China and Russia to respond is
to go after those in the MIC; the CEO, lobbyists, financiers, etc... If they follow the money
and take them out, I suspect we all would see a dramatic turn of events. No need to publicize
their early retirement. Make it messy and public but not to the point of taking out
innocents.
Yes, Michael Hudson is excellent, mostly because he's rare economist, that is, one who
begins from the premise that the 'economy' is a set of historically-situated and specific
modes of exchange and forms of human relations. Aristotle located what we call the economy in
ethics and politics; we follow the fairytales of neo-classical economics and global capital
by imagining that it has some scientific autonomy from human social relations. Marx was right
in following Aristotle's insight by critiquing the very idea of an autonomous economy, which
the chief ideological fiction of late capitalism. Sam Chambers and Ellen Meiksens-Wood are
also excellent critics of this obstacle to reimagining a viable alternative to the economy as
it is propagated by the US neoliberal global apparatus.
Inkan1969 , Jan 16 2020 22:34 utc |
42S , Jan 16 2020 22:37 utc |
43
@Daniel #36:
The United States' most potent weapon isn't military, it's economic, and through it the US
government controls the world. That weapon is the US Dollar and ever since Nixon took it
off the gold standard it has been used to further the Empire's imperial hold on the global
economy.
But at the moment even countries under American sanctions and surrounded by its armies,
with the possible exception of Iran, aren't really fighting back.
Exclude me from this squad. I's always from the opinion that the USA would collapse
slowly, i.e. degenerate/decay. I won't repeat my arguments again here so as to spare people
who already know me the repetition.
However, consider this: when 2008 broke out, some people thought the USA would finally
collapse. It didn't - in great part, because the USG also thought it could collapse, so it
acted quickly and decisively. But it cost a lot: the USA fell from its "sole superpower"
status, and, for the first time since 1929, the American people had to fell in the flesh the
side effects of capitalism. It marked the end of the End of History, and the realization -
mainly by Russia and China - that the Americans were not invincible and immortals. It may
have marked the beginning of the multipolar era.
--//--
The world (bar China) never recovered from 2008. Indeed, world debt has grown to another
record high:
The world governments - specially the governments from the USA, Japan and Europe -
absorbed private debt (through purchase of rotten papers and through QE) so the system could
be saved. But this debt didn't disappear, instead, it became public debt. What's worse:
private debt has already spiked up, and already is higher than pre-2008 levels. The Too Big
To Fail philosophy of the central banks only bought them time.
--//--
Extending my previous link (from the previous Open Thread) about money laundering:
The global TV subscription streaming company, Netflix made $1.2bn in profits in 2018, of
which $430m was shifted into tax havens, reports Tax Watch UK.
The estimated revenue from UK subscribers was about $860m, but most of this was booked
offshore in a tax haven Dutch subsidiary. Netflix claims its UK parent company got only
$48m in revenue. When the costs of Netflix UK productions were put against this, Netflix
was able to avoid paying any tax at all to the UK government. Indeed, it received tax
reliefs for productions in the UK from the government.
A simple question requires a simple answer. Russia's defence expenditure in PPP terms is
probably in excess of $180 billion per year which buys a shedload of "capable military
equipment".
It should be noted that the point Hudson's trying to make in his "Note to China" is to warn
China of what if faces by using historical examples. As S points out @43, Russia's Ruble is
very sound and its dollar and T-Bill holdings are extremely low. The message to China and the
entire SCO community is to cease supporting the Outlaw US Empire's military by supporting its
balance of payments by buying T-Bills. The sooner the SCO community, or just the core
nations, can produce a new currency for use in trade, the sooner a crisis can be created
within the Outlaw US Empire--essentially by turning the "intellectual weapon of
financialization" against the global rogue nation foe.
In my golden days, I did manufacturing throughput analysis, cost modeled parts, and
reviewed component and transportation distribution. I am curious. Forget all that
neoliberal stuff . . .
Ohh, those golden days
Measurement has its place and is the cornerstone of science, but it is not equal to
pattern recognition. And when applied to social phenomena with their complexity it is
more often a trap, rather then an insight.
You need to understand that.
Deification of questionable metrics is an objective phenomenon that we observe under
neoliberalism.
A classic example of deification of a questionable metric under neoliberalism is the
"cult of GDP" ("If the GDP Is Up, Why Is America Down?") See , for example
For example, many people discuss stagnation of GDP growth in Japan not understanding
here we are talking about the country with shrinking population. And adjusted for this
factor I am not sure that it not higher then in the USA (were it is grossly distorted by
the cancerous growth of FIRE sector).
So while comparing different years for a single country might make some limited sense,
those who blindly compare GDP of different countries (even with PPP adjustment) IMHO
belong to a modern category of economic charlatans. Kind of Lysenkoism, if you wish
That tells you something about primitivism and pseudo-scientific nature of neoliberal
economics.
We also need to remember the "performance reviews travesty" which is such a clear
illustration of "cult of measurement" abuses that it does not it even requires
commentary. Google has abolished numerical ratings in April 2014.
Recently I come across an interesting record of early application of it in AT&T at
Brian W Kernighan book UNIX: A History and a Memoir at late 60th, early as 70th.
"... "The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well." ..."
"... Recently I read Not Fade Away by Laurence Shames and Peter Barton. It's about Peter Barton, the founder of Liberty Media, who shares his thoughts about dying from cancer. ..."
For the longest time, I believed that there's only one purpose of life: And that is to be happy. Right? Why else go through all
the pain and hardship? It's to achieve happiness in some way. And I'm not the only person who believed that. In fact, if you look
around you, most people are pursuing happiness in their lives.
That's why we collectively buy shit we don't need, go to bed with people we don't love, and try to work hard to get approval of
people we don't like.
Why do we do these things? To be honest, I don't care what the exact reason is. I'm not a scientist. All I know is that it has
something to do with history, culture, media, economy, psychology, politics, the information era, and you name it. The list is endless.
Just a few short years ago, I did everything to chase happiness.
You buy something, and you think that makes you happy.
You hook up with people, and think that makes you happy.
You get a well-paying job you don't like, and think that makes you happy.
You go on holiday, and you think that makes you happy.
But at the end of the day, you're lying in your bed (alone or next to your spouse), and you think: "What's next in this endless
pursuit of happiness?"
Well, I can tell you what's next: You, chasing something random that you believe makes you happy.
It's all a façade. A hoax. A story that's been made up.
Did Aristotle lie to us when he said:
"Happiness is the meaning and the purpose of life, the whole aim and end of human existence."
I think we have to look at that quote from a different angle. Because when you read it, you think that happiness is the main goal.
And that's kind of what the quote says as well.
But here's the thing: How do you achieve happiness?
Happiness can't be a goal in itself. Therefore, it's not something that's achievable. I believe that happiness is merely a byproduct
of usefulness. When I talk about this concept with friends, family, and colleagues, I always find it difficult to put this into words.
But I'll give it a try here. Most things we do in life are just activities and experiences.
You go on holiday.
You go to work.
You go shopping.
You have drinks.
You have dinner.
You buy a car.
Those things should make you happy, right? But they are not useful. You're not creating anything. You're just consuming or doing
something. And that's great.
Don't get me wrong. I love to go on holiday, or go shopping sometimes. But to be honest, it's not what gives meaning to life.
What really makes me happy is when I'm useful. When I create something that others can use. Or even when I create something I
can use.
For the longest time I foud it difficult to explain the concept of usefulness and happiness. But when I recently ran into a quote
by Ralph Waldo Emerson, the dots connected.
Emerson says:
"The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some
difference that you have lived and lived well."
And I didn't get that before I became more conscious of what I'm doing with my life. And that always sounds heavy and all. But
it's actually really simple.
It comes down to this: What are you DOING that's making a difference?
Did you do useful things in your lifetime? You don't have to change the world or anything. Just make it a little bit better than
you were born.
If you don't know how, here are some ideas.
Help your boss with something that's not your responsibility.
Take your mother to a spa.
Create a collage with pictures (not a digital one) for your spouse.
Write an article about the stuff you learned in life.
Help the pregnant lady who also has a 2-year old with her stroller.
Call your friend and ask if you can help with something.
Build a standing desk.
Start a business and hire an employee and treat them well.
That's just some stuff I like to do. You can make up your own useful activities.
You see? It's not anything big. But when you do little useful things every day, it adds up to a life that is well lived. A life
that mattered.
The last thing I want is to be on my deathbed and realize there's zero evidence that I ever existed.
Recently I read
Not Fade Away by Laurence Shames and Peter Barton. It's about Peter Barton, the founder of Liberty Media, who shares his
thoughts about dying from cancer.
It's a very powerful book and it will definitely bring tears to your eyes. In the book, he writes about how he lived his life
and how he found his calling. He also went to business school, and this is what he thought of his fellow MBA candidates:
"Bottom line: they were extremely bright people who would never really anything, would never add much to society, would leave
no legacy behind. I found this terribly sad, in the way that wasted potential is always sad."
You can say that about all of us. And after he realized that in his thirties, he founded a company that turned him into a multi-millionaire.
Another person who always makes himself useful is Casey Neistat
. I've been following him for a year and a half now, and every time I watch his
YouTube show , he's doing something.
He also talks about how he always wants to do and create something. He even has a tattoo on his forearm that says "Do More."
Most people would say, "why would you work more?" And then they turn on Netflix and watch back to back episodes of Daredevil.
A different mindset.
Being useful is a mindset. And like with any mindset, it starts with a decision. One day I woke up and thought to myself: What
am I doing for this world? The answer was nothing.
And that same day I started writing. For you it can be painting, creating a product, helping elderly, or anything you feel like
doing.
Don't take it too seriously. Don't overthink it. Just DO something that's useful. Anything.
Darius Foroux writes about productivity, habits, decision making, and personal finance. His ideas and work have been featured
in TIME, NBC, Fast Company, Inc., Observer, and many more publications. Join
his free weekly newsletter.
This article was originally published on October 3, 2016, by Darius Foroux, and is republished here with permission. Darius Foroux
writes about productivity, habits, decision making, and personal finance.
@Dutch
Boy rk, employees need to make an adequate wage. Unfortunately, this premise does not
exist in today's business climate.
Henry Ford openly criticized those of the "tribe" for manipulating wall street and
banksters to their own advantage, and was roundly (and unjustly) criticized for pointing out
the TRUTH.
Catholic priest, Father Coughlin did the same thing and was punished by the Catholic
church, despite his popularity and exposing the TRUTH of the American economy and the
outsider internationalists that ran it . . . and STILL run it.
Our race to the bottom will not be without consequences. A great realignment is necessary
(and is coming) . .
This
site regularly discusses the rise of neoliberalism and its consequences, such as rising
inequality and lower labor bargaining rights. But it's also important to understand that these
changes were not organic but were the result of a well-financed campaign to change the values
of judges and society at large to be more business-friendly. But the sacrifice of fair dealing
as a bedrock business and social principle has had large costs.
We've pointed out how lower trust has increased contracting costs: things that use to be
done on a handshake or a simple letter agreement are now elaborately papered up. The fact that
job candidates will now engage in ghosting, simply stopping to communicate with a recruiter
rather than giving a ritually minimalistic sign off, is a testament to how impersonal hiring is
now perceived to be, as well as often-abused workers engaging in some power tit for tat when
they can.
But on a higher level, the idea of fair play was about self-regulation of conduct. Most
people want to see themselves as morally upright, even if some have to go through awfully
complicated rationalizations to believe that. But when most individuals lived in fairly stable
social and business communities, they had reason to be concerned that bad conduct might catch
up with them. It even happens to a small degree now.
Greg Lippmann, patient zero of toxic CDOs at Deutsche Bank, was unable to get his kids into
fancy Manhattan private schools because his reputation preceded him. But the case examples for
decades have gone overwhelmingly the other way. My belief is that a watershed event was the
ability of Wall Street renegade, and later convicted felon Mike Milken, to rehabilitate himself
spoke volumes as to the new normal of money trumping propriety.
Another aspect of the decline in the importance of fair dealing is the notion of the
obligations of power, that individuals in a position of authority have a duty to
The abandonment of lofty-sounding principles like being fair has other costs. We've
written about the concept of obliquity, how in complex systems, it's not possible to chart a
simple path though them because it's impossible to understand it well enough to begin to do so.
John Kay, who
has made a study of the issue and eventually wrote a book about it , pointed out as an
illustration that studies of similarly-sized companies in the same industry showed that ones
that adopted nobler objectives did better in financial terms than ones that focused on
maximizing shareholder value.
Our Brexit regulars wound up talking about these issues as part of a UK election post
mortem. Hoisted from e-mail. First from David:
Around the time of the cold dawn of Friday 13 December, I began to ask myself why the
whole grisly Brexit business had turned out so differently to what I, and many others, had
expected. Now it's true that politics is unpredictable, but in 2015, any satirist worthy of
their name would surely not have dared to imagine a sequence of events so bizarre as that
which actually happened. And of course we can all be wrong, but I was basing my judgements
not only on a lifetime of watching politicians at play, but also on the well-understood
general principles of how politics, and especially international politics, operates.
The conclusion I came to involves conceding that, yes, politics is unpredictable, yes we
all make wrong calls from time to time, but there's something more profound than that. Simply
put, the traditional rules and procedures of British politics have stopped applying. It's not
now possible to count on the British system for planning, forethought, rationality, strategy,
tactical sense, political sense, common sense or any other kind of sense.
Consider. Cameron's referendum promise was an error of judgement, but it could have been
handled very differently even so. I'd assumed that there would be some kind of threshold (55%
perhaps), and some provision for a later stage of reflection and time-wasting.
I assumed that the government would be wary of the possible result, and try to
de-dramatise the referendum campaign.
I assumed that Remain would do a reasonably competent job, underlining the positive
benefits of EU membership.
I assumed that the result, if it was "leave" would be the beginning of a long process of
reflection and discussion. A Royal Commission, or something, would be set up, with several
years to work out what kind of future relationship there should be with the EU. Bits of the
UK most affected (agriculture for example) would be consulted in depth. Discreet soundings
would be made throughout Europe to see what our partners might accept. Only after all this
was done would it be time to press the Art 50 button.
At that point, I assumed, the UK would be well prepared and, in the traditional manner,
have working papers and draft treaty language to propose as soon as the negotiations started.
All aspects (including NI) would have been at least thought of.
I assumed that the Cabinet would have agreed a fairly detailed set of objectives and
negotiating guidelines to give to the UK delegation, fine-tuned in the light of first
reactions from partners.
I assumed that the Cabinet would have agreed fallback positions and some idea of what the
Tories, and Parliament, would accept.
Literally none of this was true.
Now we're not talking rocket-science here. Yes, the UK system was once pretty Rolls-Royce,
but the kind of list I've given above would have seemed obvious to any middle-level
functionary of any medium-sized country. Actually achieving all of it is not necessarily
easy, but at least you can make a serious attempt: there are important stakes involved.
So what does this imply for the future?
Well, things are getting worse, not better. The Cabinet hasn't even begun to think yet
about the future relationship. Some of them probably think Brexit is all over. I don't think
there's any agreement even about the vaguest outlines of this future relationship, which
means that it could be months before any political objectives emerge, if they ever do.
Which is to say that we are in for another year of Keystone Cops diplomacy, with the
stakes if anything even greater.
From Clive:
Your thought-process sounds like my trains of thought. And when I think those sorts of
thoughts, I think that I'm a remnant or a bygone era. Which I am.
What disappeared from that world was playing fair. Everyone played fair, or, at least,
playing fair was a bedrock than you could drift away from, but, sooner or later, you fell
back on it.
There will be a lot of casualties until our societies get to the stage where they can
rediscover fairness. I bought a book from a second hand bookstore about the founding of the
EEC, from 1978 I think the copyright said it was. When I read it, it's like it was written by
some long-since vanished ancient civilisation. There were honourable intentions, strategies
to deliver them, honest evaluations of emerging problems and, above all, a shared shouldering
of responsibility to resolve them equitably. There was a sense of pride which leaps off the
pages not at what had been achieved, but at what the prevailing culture intended to achieve.
The book went on about the European ideal -- and didn't think it was in any danger of
naivety.
That world has vanished -- and it's not coming back any time soon.
Brexit was a reaction to that. We can't fix it, think a majority of the U.K. population,
and we're not even going to try. This is why Leave has progressed the way it has. The last
thing the Leave majority (or maybe the smidge over 50% who think Leave is the best option)
want to do is try to return to the failed common-cause based solutions. Johnson has no
intention whatsoever of anything other than the lightest of lightweight FTAs -- or even no
FTA. Anything more would be an anathema to the Thatcher-esque approach the Conservatives have
on remaking UK society by severing all EU ties. This isn't really Thatcherism -- a common
misconception. It's the sort of response which Thatcher would have devised, had she been
placed in the same position, so is easily confused.
So this isn't some unplanned, accidental stumbling along to an unexpected surprise
conclusion. It is, rather, a laser like focus on an intended destination.
Anyone expecting some great effort or thought-process to be applied by the U.K. to
salvaging a relationship with the EU will be disappointed. In effect, they'd be asking for
the U.K. to spend time and resources saving something that isn't, in the U.K.'s prevailing
worldview, worth saving. The EU has been nothing but a bother, so the thinking goes, what's
the point in trying to flog the dead horse that is the European ideal? What did it ever do
for us, anyway..?
Brexit is just a here's-one-we-made-earlier example of a long-term global trend. If
humanism -- or fairness as I reduced it to earlier -- makes a comeback, it might all be
fixable. In the meantime, prepare for an increasingly atomised, separatist world.
Vlade's response:
I'd like to agree with you. Except I believe you're idealising it. The world was never
playing fair – but it did cooperate more, because the US needed the Europe more in the
cold war than it does now (when it's more of a rival, definitely in Trumps' eyes). Hell, the
Soviet Block cooperated – except it didn't really, it did what the SU told it to. But
it definitely didn't play fair. It did follow the rules, because the cost of breaking them
was seen as too high (US was terrified I believe of France and Italy doing a deal with the
SU). At least to me, following the rules and playing fair are distinct.
It's possible that the western society was more fair before 90s, I can't know. But again,
I suspect that a lot of it was almost a self-protection against the SU and "communism", which
disappeared in the 80s., but possibly started disappearing even in 70s (when you live with
some danger for a while, you get oblivious to it).
I do think that the Brexit was a reaction to the word that was. But I disagree that it was
really the EU specific reaction, as in "the EU is the source of all this". It played the
part, but the underlying reasons were IMO much more varied than the EU – where I have
doubts many of the people there really understood in any way, except as an externality you
can rail against.
You get the crawing for the world-that-was in the US, and it doesn't have any EU. You get
it in Russia, and it has the EU and the US, or, if you want, "the West" which puts
conveniently both of them together.
The world as most people knew it is coming apart, and chances are it will get worse (and
who knows it it ever gets better). In times like those, people want the world-that-was.
Sometimes it can actually be a force for good, like after WW2 in "the west". Except even
there it wasn't the world-that-was, but more of the world-we-want (on both sides of the iron
curtain, there was a reason why the communist regimes were, at least initially, strongly
supported by the populace). But wanting the world-that-was was also what brought Nazis and
Fascist into the power.
And PlutoniumKun's:
A key casualty of neoliberalism was corporatism in its more benign form. It used to be
that policy was made in the early hours in those proverbial smoke filled rooms where
different groups at least made some type of attempt at compromise. This is still a feature of
many countries and sectors, but I think its significant that the rot is most advanced in the
neolib early adopters. It's not just the formal art of making compromises, it's the simple
force of human contact when people in the same room together. It's unfortunate I think that
the UK joined the EU just as it lost interest in being run by civil servants having endless
meetings with sectoral interest groups. This is a core reason I think why the UK never really
engaged with the EU, even if in the short term its engagement was quite effective
(essentially bullying other countries into getting its way on issues like agriculture and
competition policy).
But as we've discussed before, the long term destruction of the British civil service has
in many ways been just as stupid, and just as damaging, as the long term destruction of
Britain's manufacturing base. In both cases, the reasons have been ideological, not
pragmatic.
Outsiders I think see it more clearly. I was travelling in Asia for a while and I was
really surprised at how casually people would discuss what they see as the once admired
anglosphere fall apart. Most Asians in my experience viewed Britain with a mixture of
distrust and some awe and admiration. Now the commonest response seems to be a shrug of the
shoulder or just plain schadenfreude.
This bodes particularly badly for the UK's trade negotiators when they start face to face
meetings. They will be a little like late 19th Century Russia or Turkey -seen as a country
who's only right to be at the top table is due to history, not present circumstances. The
gradual retreat of the US from the eastern Pacific is pretty much seen as a done deal,
everyone is frantically scrambling to ensure they are not caught on the hop. I'm a great
believer that the true indicator of what a country sees as its future can be seen in what it
spends its military budget on. Every major Asian country is spending serious cash on
domestically sourced air superiority, long distance strike capability, in addition to A2AD
for its brown water coasts.
There are many parts of the world where the 'old ways' are still pretty much intact
– much of Europe still likes the EU and the way it works and vaguely corporatist/social
democratic ways of doing things. Its easy to get carried away with stories of austerity and
decay, but when I travel in Europe much of it (including countries like Spain and Portugal)
look pretty good and no more or less full of discontent than they ever were. Much of northern
Europe and individual countries like Portugal are doing very well indeed, and France has been
defying the naysayers for as long as I've been reading English language economics papers and
magazines. Its not clear to me that the foment in those countries – even in France
– is much worse than its been in any given post war decade. There are cycles within
cycles for these things. Ireland is, all things considered, booming economically and
culturally content, austerity a long forgotten problem for most people.
What we are seeing is the postponed breakdown of the traditional centre left and rights.
The wipeout of traditional left wing parties has been much commented upon, but less obvious
is the breakdown of the old Christian Democrat/centre right tradition in much of Europe and
other parts of the world in favour of a more libertarian/populist/nationalist form. It's just
that the change has tended to be more within parties, while the left is always more
fissiparous.
I think the left is slowly, very slowly, reformulating along lines closer to the older
anarchy tradition, as seen by the rise of Green Parties – but it will take time before
a more grassroots, collaborationist form of left wing politics really starts to make a
difference. I think the libertarian/neolib wing of the right is being well and truly wiped
out by the more ruthless nationalistic (I hate to use the F word) tradition. The
transformation of the Tory party into an English nationalist party with a focus on serving
its new working class/lower middle class base has been carried out with quite remarkable
speed. The Tory business class will come to deeply regret its silence over the internal
revolution that took place post the Brexit vote.
All this of course is within the context of slowing growth and a rapid climate
deterioration. All bets are off in significant parts of the world as the fires rage. The only
certainty about climate change is that there will be completely unforeseen negative
impacts.
Sorry, I forgot to say that this was one of these think-provoking posts that I like so
much.
In a loosing fairness world, what is the proper personal conduct one must follow? Go with the
trend, or try to keep the old-style way as much as you can?
I would expect the whole spectrum of answers to this question. Fortunately, there will
always be some people that put fairness forefront.
" Fortunately, there will always be some people that put fairness forefront "
Yes Ignacio but I do hope youngsters don't become embittered by a world that is certainly
a lot harsher for them than it was for me 40 odd years ago.
After a year of fighting to get money from those who have plenty of it, am now working on
a transatlantic commission for a wealthy guy from Colorado, who has actually shocked me with
his fairness – particularly as I was worried about the possible downsides of getting
into such a far flung relationship.
He has actually kept my head above water while am waiting for a large long overdue payment
from a public institution that I almost wish privatisation on for their lack of effort in
addressing the situation.
I had a great Christmas trying to play Santa without the suit, with the best bit being the
giant full facial smile received from one of those likely old beyond her years Roma women
selling " The Big Issue " as she sat as if clinging to the wall in the pouring rain.
I hope everyone at NC is having a fine Holiday can anyone post the link to some of the
videos explaining neoliberalism posted at NC a short while ago? Can't seem to find them.
Thanks
I've just tried, for the second time, to watch that video. For me, it is too quickly paced
to be effective, or even informative -- and mind you, like other NC regulars, I KNOW this
stuff. IMO, Nancy MacLean's "Democracy in Chains" does a much better job. Yes, it takes more
than 26 minutes to read -- but I think understanding what has happened to the world over the
last 75 to 80 years SHOULD take more than 26 minutes.
Yes, it is quick paced. I had to do the pause-rewind-replay this or that bit,
pause-rewind-replay steps several times to get what was being said. Too much condensed info
for me to take in all at once.
Thank you, Yves. This post is about exactly the sort of thing that keeps me up at night.
Frankly I spend a lot of time mourning for what our society used to be, and the notion that
nobody has the backbone to do the right thing regardless.
I spend my share of time in conversation with many people in the upper/middle class,
business leaders and Conservatives in particular. The entire thinking is, "Losers cry about
being fair, winners go home and bang the Prom Queen". [paraphrased]
I always ask them if this is the kind of society they want to live in, and raise their
kids in. It is lizard brain, writ large.
Anyway, I just want to say "thank you" for all your efforts as a beacon in the darkness.
It is comforting to know that someone else also can see.
They dont have the backbone as we are deep into the "time of the end" where the love of
the greater number will cool off, they will be lovers of money and themselves, and the list
goes on. This system of things is all Satans and its on the verge of being extinguished
forever.
What disappeared from that world was playing fair. Everyone played fair, or, at least,
playing fair was a bedrock than you could drift away from, but, sooner or later, you fell
back on it.
Was it "fair" or was it Because the Soviet Block offered an alternative, purportedly
Communism but what appears to me as totalitarianism. The alternative to the Communist block
had to appear more appealing for the players to gain advantage in the great game.
With the Communist block gone, do we now just see the reality, and whatever accommodation
was made to have the Western/US based system more appealing has now changed. How is the US'
system viewed in Latin America? As "fair?"
When the British Empire controlled much of the world, was it "fair"? I was a part of that,
and I could not describe it as "fair".
In the British Empire's demolition the US played a good part of being "fair," but it was
"fair" only if it advanced the US' interests. An example of this is the forgiveness of War
Loans. Germany, on the Soviet systems' door step had war debts forgiven. The UK, which paid a
huge penalty for fighting the wars received no such favor for its "special relationship" with
the US, coupled with a not-so-polite demand to dismantle the British Empire (aka Self
Determination).
I perceive the world's governing system not in terms of left and right, but as the surface
of a sphere, with the the horizontal axis being changing from "free" to "totalitarian" which
can be approached from the political left or the right, and the vertical axis varying from
market based (neoliberal) to centrally controlled, and any country is always being affected
by words or threats to slide from one point on the sphere along some rhumbh line to another
point.
The idea of "fairness" is one of those things that used to be a lot more clear in the past
than it seems to be today. In general, the rules were the rules, and anyone who decided to
play accepted them. A level and "fair" playing field, with the same rules for everyone, was
what determined the "winner," and made "winning" legitimate.
But lately society has apparently decided to determine the "winners" first, and change the
rules to match the desired outcome. That approach has wreaked havoc with the concept of
"fairness."
Everybody gets a trophy for "participation." Eliminate the electoral college
because hillary didn't win it. Pretend that biological males are actually women because
that's how they "self-identify," and let them "compete" against biological women instead of
those with the same chromosomes.
You can't have "fairness" without rules, and playing fast and loose with the rules means
you can never tell who the cheaters are.
Thanks for this post. It seems like many of the economic and democratic govt and even
social rules once reliably enforced by laws and custom have become mere suggestions. The idea
of rules or fair play that existed from, say, the 1930's – 1980's, in the US now seem
entirely overtaken by a sort of modern, re-invigorated, social Darwinism, a once rightly
discredited moral theory. imo.
Everything old is new again, unfortunately. Neoliberalism is like the old social Darwinism
dressed up in newer, erudite, clothes. Substitute today's words 'the market' for yesterday's
words 'the strongest and fittest' and you have a pretty close 1:1 match. Misapplying Darwin's
studies in biology to sociology.
The following text was written for school kids' history class. It's a quick read.
And way before Darwinianism, at the dawn of capitalism, we had the Puritans.
According to their doctrine, if you were wealthy it was because you were favoured by God.
If you weren't wealthy, God didn't intend you to be. In every era, the selfish and the greedy
have a justification.
Nothing to do with the fact that you stitched up your fellow countrymen by enclosing
common land and kicking those that had used it for generations off their means of self
subsistence.
Your comment about the courts role in eroding a sense of fairness and, by extension, trust
in the system called to mind the courts' role in maintaining the vast US prison system. The
Supreme Court was recently considering a case filed from a pro se prisoner and Justice
Sotomayor referenced a secret policy within the Fifth Circuit Court of Appeals of denying all
petitions filed by pro se prisoners for thirteen years without even so much as glancing at
the briefs. The policy only came to light when an employee of the court referenced it in
their note before committing suicide, apparently out of guilt.
The Fifth Circuit happens to include Louisiana, which has the highest incarceration rate
of any state. Eventually the policy was reversed, but in practice I'm sure most filings from
pro se petitioners in prison are met with a similar lack of interest and consideration.
Perhaps there are good reasons to dismiss some filings quickly given the large backlogs and
legal rumors and nonsense that makes it way through prisons.
However, the courts remain the last best hope for prisoners in trying to overturn wrongful
convictions or address abuse at the hands of prison officials, at least for now. If the
courts are happy to deny these people fair consideration for efficiency's sake unless they
can secure outside counsel you can bet this abuse and neglect will continue. Maybe that
sounds like a fine trade-off to those in power now, but the long-term effect is the erosion
of trust and confidence in the system beyond just those directly affected.
Another consequence of the loss of fair play is a termination of the phenomenon that many
workers, especially white collar workers, wanted to believe that their employer was
trustworthy and, as a consequence, they trusted their employer at a higher level that is or
was warranted. This trust was mis-placed to some extent but served as a bulwark when
relationships between employee and employer became strained.
I wonder now, whether this is still the case. It seems not to be. Granted employers have
earned their employees distrust or, at a bare minimum, lack of trust that formerly was
granted (due to wishful thinking).
I know exactly what you're talking about. Before I was laid off, I watched as many
colleagues were shown the door. Oddly from a trust perspective, most of these people were
vastly more talented and experienced than the employees who continued to keep their jobs.
(Though, of course, from a strictly shareholder perspective, their high pay levels justified
their dismissal.)
So from the canned employees' point of view, after years of awards, high praise and
affirmation from management, the fact that they were being hustled out the door (sometimes
literally) amounted to a profound betrayal of trust. And you could see it in the look of
shock on many of their faces.
When my time came, I had absorbed the lesson and had completely detached my ego from my
work, no longer taking any pride in what I did for a living. And I never will again as long
as I'm working for someone else, even an employer who in the moment is kind and appreciative.
They can turn on you in a heartbeat, and for the flimsiest of reasons.
Just to add in impeachment (prexit?), it once was considered a big deal that Nixon lied
("the coverup is worse than the crime"). And lying was at the center of the Clinton
impeachment. But that's less true with the current dispute and perhaps that's because the
impeachers themselves are shamelessly lying. The truth no longer seems to matter to anyone as
long as a fairy tale "narrative" can be found to substitute. Perhaps it's not so much that
the world has become more evil or selfish but that modern society has a serious reality
problem. People still understand fairness but simply pretend they are being fair as long as
nobody is challenging their narrative (see Amazon post today). And that may be because we are
saturated with media that are all too willing to tell us what we want to hear.
Thank goodness for NC where some of us come–and for a long time–to find out
the truth. Perhaps it's not just a coincidence that many of those who hang out here seem to
be older–old enough to remember a time when truth mattered.
A little more patience, but not too much, is needed in awaiting the inevitable and
continuing sunlight disinfectant applied to so many top level employees of the FBI, DOJ,
their institutions and other malefactors in other branches. When, not if, that day arrives,
when perp walks, trials, sentencing, mea culpas and much feckless deflection and gnashing of
teeth occur, then will there be some perception of a symbolic return to the fairness that was
once felt by much of the country. The preponderance of evidence, not punditry or spin, points
to likely criminal convictions, ruined careers and discredited institutions. Repairing those
institutions, and regaining public trust will be difficult given the inertia and FUD residues
that have built up, but we do have a country at stake for all of us.
There are many other aspects of the justice system that need review and reform, as noted
by other commenters. Without some highly publicized changes to those institutions to restore
some initial and fundamental element of trust, then people both in the US and abroad will
have doubts about the Rule of Law. Most people do not want to have a country where that
statue of a blindfolded justice has to peek to see who is trying to tip the scales.
The main word used here is fairness but what we are really talking about is justice. It
does not matter what country or culture that we are talking about, we all know when we are
being treated fairly, or justly, and when we are suffering an injustice. An example? Two
people have a meal together when one reaches over and helps themselves to the food on the
other person's plate. That sort of unfairness can get you killed in some places. But likely
that feeling of unfairness or injustice is universal.
And here is the crux of neoliberalism. It picks sinners and losers – deliberately
– and abandons those they deem to be losers. But it does not do so on the basis of
worth but on what it perceives to be worth which is why a college sports coach or
administrator can earn millions while a professor earns peanuts. If anything, there is a
strong streak of Social Darwinism to this as a justification to who these "winners" are. But
most of us can think of people in business, sports, politics, etc. who in reality aren't
worth two bits based on their performance.
The result for the UK? Those designated the losers who were abandoned, policed and watched
by the winners saw their chance to strike back at them by picking Leave in the Brexit
campaign. Life was not good for them and it was not going to get any better and so they
decided to make a choice to deny the winners something that they valued – Remain. There
is not a doubt in my mind that if these people had not been abandoned but had been able to
share in the success of the country, then they too would have chosen Remain. You saw the same
with the Trump vote in 2016 in the US. And this is only the first installment.
I think the insight in your last paragraph, more than any other single factor, explains
Donald Trump's electoral success in 2016 and identifies who his "base" really are.
The court system is perhaps the best example of how Fair Play has been degraded in the
US.
For 20+ years we ran a small mom-and-pop consulting business for large companies, all
Fortune-500. We did highly technical work with such efficiency and economies of scale
providing industry standings and granular decision support, the companies themselves or
McKinsey-types could never come close to doing a similar product. At least until an industry
association, facilitated by a customer decided to steal misappropriate our
intellectual property and produce a knock-off product. This happened even though we offered
to collaborate with the industry association and had a "good" contract prohibiting
stealing misappropriation.
Let it suffice to say that a mom-and-pop consulting business is at serious disadvantage as
soon as you get a lawyer and file a lawsuit in federal court. The defense attorneys were
given a blank check by their members and spent high 7 figure sums trying to pulverize us. By
the time the thing was winding down, we were paying our attorneys our of our retirement
account. I understand that in the UK and EU things are even more stacked against
plaintiffs.
While 98% of federal civil cases and tossed out or settled, we ended up with a 3 week
trial. The defendants team had 3 partners, an IT person and paralegal from a national firm in
court at all times, plus 3 people working locally at rented office space. We had a mid-size
regional firm represent us -- it was not cheap.
What strikes us most is the defendants seemed to be on home turf from the get-go with the
court. There were YEARS of delays and all sorts of spurious filings and even a counterclaim
based on fiction. This is standard procedure. Further, it was a highly technical case and we
performed thousands of hours of work to refine the details for the lawyers and jury to
understand. The defendants had unlimited resources to obfuscate and confuse, which they did
masterfully. The majority of evidentiary ruling were in favor of the defendants. It was a
huge upward struggle.
What is even worse is there is zero incentive for defendants not to lie
mis-remember facts. Our lead attorney told us in 25 years of litigation practice he had never
seen or heard of a sanction, much less prosecution, for perjury. In fact some of these
liars were promoted and rewarded for their courtroom performance.
This whole process took 5 years. We "won"; the jury didn't buy the industry's arguments.
But our business was destroyed, we've been blacklisted and any residual value a business with
20+ years of stable income was destroyed. The industry group pays their staff handsomely (its
just added to your monthly bill) and while a few people were pushed aside, the main perps
remain and are well compensated. They plod along with a garbage imitation, but the
associations membership executives don't care -- there is no third party assessment of their
performance -- they grade their own performance now.
Needless to say, we are tired, disgusted and cynical. But glad we won and that it is over.
I would not do it again
It reminds me a bit of the Phone Hacking trial in the UK. Peter Jukes has a good book on
it – Beyond Contempt. The mismatch between the resources available to the News
International people and those available to the British Government was risible. As a result
News International was effectively in control of the proceedings almost from start to finish,
though the Crown was able to get Coulson as there was incriminating evidence against him in
writing.
Yes there may well have been perjury as well and the police seemed as I recall to have
been very slow to get to a farm where there were reports that major bundles of paper were
going on to a bonfire. Hugh Grant, when he taped a journalist, was told that 20% of
Metropolitan Police officers had been bribed by the press. Wonder if that had anything to do
with it?
And yet many Britons still think that the UK is a pretty straight place ..so much more
honest than those foreign countries.
Have recently watched series The Loudest Voice about Fox News. They make Murdoch look like
an avuncular figure in order to heighten the villainy of Ailes but of course you don't let
the organ grinder off the hook so as to blame the monkey. No Rupert no Fox News and perhaps
no current version of the NYT that acts like Fox News.
Thanks for the summary of the courts' action as a millstone around the neck of honest
commerce, and my sympathy for your loss.
It's worth remembering this kind of thing has consequences too. Fred Koch patented the
basic refining processes to turn crude oil into useful products, then the Rockefellers'
refineries essentially stole those processes (used them without paying patent royalties) in
their refineries. Koch sued .and *lost*! A few years later it came out that the Rockefellers
bribed the judge and Koch re-sued and won but at what cost? And ever after Koch and his
offspring came after the government whose courts were so corrupt.
The lament about declining standards is as old as the Pharaohs–read Howard Zinn's
People's History of the U.S. which exposes the New World's history of
venality–but recent events seem to be sounding the depths of the most profound
dishonesty. It's gotten bad enough that political economist Mark Blythe talks about the
positive impact a disaster like the Climate catastrophe would have in breaking up this cabal
of evil.
Your story reminds me of Florida inventor Steve Morton's case against copyright theft
being closed down and covered up by then-FBI Director Mueller and then-Attorney General Eric
Holder. Definitely a good example of unfairness at the top of the system.
For further information on Morton's case and story a good search engine for "Steve Morton"
, " Fincantieri ", " Mueller", " Holder" , "Comey" , ought bring up an outlet covering said
situation.
> The gradual retreat of the US from the eastern Pacific is pretty much seen as a done
deal,
> everyone is frantically scrambling to ensure they are not caught on the hop.
Not sure I understand this. Eastern Pacific? What retreat?
Wall*Street is often described as a casino, but in reality most every house of chance has
a security exchange commission of it's own, making sure that there is no cheating, and fair
play on both sides of the green felt jungle, and should a dealer in it's employ be caught in
an act of larceny, they'll be arrested toot suite.
When Wall*Street was paid off on losing wagers a dozen years ago, fair play lost it's
luster and has only become more meaningless in it's absence.
"I see in the near future a crisis approaching that unnerves me and causes me to tremble
for the safety of my country. . . . corporations have been enthroned and an era of corruption
in high places will follow, and the money power of the country will endeavor to prolong its
reign by working upon the prejudices of the people until all wealth is aggregated in a few
hands and the Republic is destroyed."
-- U.S. President Abraham Lincoln, Nov. 21, 1864
(letter to Col. William F. Elkins)
"These capitalists generally act harmoniously and in concert to fleece the people, and now
that they have got into a quarrel with themselves, we are called upon to appropriate the
people's money to settle the quarrel."
speech to Illinois legislature, Jan. 1837.
I find your Lincoln quotes curious. I thought Lincoln that after splitting wood for rail
supports Lincoln made his name and money as a lawyer arguing cases for the large rail road
corporations. If so, the quote you provided seems much like Eisenhower's speech on the
Military Industrial Complex.
"Lincoln made his name and money as a lawyer "
How better to learn about the 'real' machinations of the ruling elites? What Lincoln did with
that 'education' was what made him famous, not the education itself.
The word 'multiculturalism' has a range of meanings, both sociological and political. You
need clearly define your meaning of the word. As it is, your assertion is vague, imo.
I imagine that the operative word in his or her comment is "imposed." That implies an
'authority' that can dictate to everyone else. Such a state of affairs would be the opposite
of what I grew up imagining "progressivism" was.
What are the conditions imposed?
Because as much of a problem as people have with the idea of "cancel culture" there still is
the flip side that people aren't going to continue to let themselves be treated like
garbage.
The ultimate 'problem' in all this is the perennial one of who controls the resources, or,
as Marx and Engels put it, the means of production.
People will be "treated like garbage" for as long as 'garbage' is all that is available to
them. In an extremely unequal society, as the modern Wast has evolved into, once some
threshold of resource 'ownership' is crossed, the only feasible method of redressing the
balance seems to be outright revolt and warfare. Except for the example of Cincinnatus in the
Roman Republic period, (See: https://en.wikipedia.org/wiki/Lucius_Quinctius_Cincinnatus
) who knows of a time when concentrated power ever voluntarily gave up any significant
portion of their powers?
Inequality is inherently unfair.
With the site admin's forbearance.
We encountered the 'ground level' fruits of the loss of the ethos of fairness yesterday.
Phyl was told to see the "Pain Management Practice," an independent section of the local
medical apparat in order to 'manage' her use of the pain meds she was prescribed for her
amputation. So far, so good. The appointment is for two o'clock. Show up at one thirty
o'clock to fill out paperwork. Due to a tight schedule and other impediments, we show up at
the office at a quarter to two o'clock. The receptionist nurses, who sit at a desk behind an
armoured glass partition, tell us that we are late and must reschedule the appointment for
two weeks later. At which time, Phyllis begins to argue. This is normal behaviour with her
when confronted with 'unfair' conditions. One of the receptionists relents somewhat and goes
back into the back room and consults with someone.
She returns and declares; "No exceptions are allowed. You are late and that is that."
Phyl replies: "You can see my problem. Are you going to be rigid?"
Receptionist; "The best I can do for you is two weeks off."
Phyl; "Is there anything sooner?"
Receptionist; "Do you want the appointment or not? We have work to do here!"
Me, sotto voice to Phyl; "We will get nowhere with this bunch. Take the next appointment and
we'll see what we can do later."
Phyl; "All right."
As we left the waiting room, one of the two patients sitting there was visibly trying not to
laugh. The other patient got up and helped open the large glass door so I could maneuver the
wheelchair out into the hallway.
The point of all this, (besides an apologetically admitted venting on my part,) is that this
medical establishment has opted for a rigid and formalized rules based imposition of
authority in place of any sort of fairness or flexibility in dealing with their clients. (I
use the word client in it's original [?] Roman sense.) Speaking with several of our neighbors
yesterday I have discovered that this sort of rigidity in scheduling is becoming more common
around here.
One of the main features of fairness, at the least in medical situations is the belief that
the patients deserve some leeway in their treatment at the hands of 'officials.' This new
experience of ours highlights the emerging ethos that the system is paramount now. The
patients are now there for the convenience of the providers, and their stockholders. Fairness
has now officially been banned.
I was going to make a remark about this system change being an example of late stage
capitalism, but just realized that formalism and inflexibility are hallmarks of late stage
anything.
'Fairness,' however one defines it is a function of flexibility. 'Fairness' shows the desire
and ability to think out complex situations and move to balanced outcomes. All 'actors' in
the social situation are considered and dealt with in some semblance of a socially supportive
ethos. Communitarian at root, this has been, as is mentioned several times above, replaced by
an atomistic and minimalist pseudo philosophy. The foregoing because a strategy of adherence
to a rigid and simplistic set of rules in social situations is a rejection of thought and
reflection. "I was just following orders." Does that sound familiar?
Alas, I fear that "things" are going to get much worse in the times ahead, for everyone.
Thanks for your indulgence.
Ambrit, I am so sorry you and Phyl have to deal with humans utterly lacking in compassion
and human decency. If think if this happened to me, I would argued forcefully –
screamed- which would have probably had me removed from the office or banished from the
practice. This kind of treatment from people who are dealing with patients who need help just
makes my blood boil. Unfortunately, I think this kind of treatment towards others is a side
effect of living in an unfair/unjust society. Many people's hearts become bitter and hardened
( like I'm suffering and I don't care if you suffer too). The dark world we live in now is
cold hearted and full of tears. My heart goes out to you and Phyl and all others who are
suffering because of this.
Thanks Elizabeth. The Home Health nurse this morning didn't want to believe our tale. She
finally suggested that we complain directly to the top level of the Medical Organization that
this practice is a part of. I'm going to try that Monday. As a side note, the Physical
Therapist this afternoon mentioned that the nurses are stymied because absolutely no pain med
scrips are written on Fridays. (I found it hard to credit, but reflection seemed to prove her
correct.) This is evidently not just a function of the doctors wanting Fridays off, but a
conscious policy on the part of the local medical establishment. [Your only recourse would be
to admit yourself in to the Emergency Room I was told. Hmmm . what's the most expensive part
of a Hospital practice? You guessed it!]
My favourite aspect of the "visit" to the Pain Management Office was the presence of the
armoured glass partition between the Lobby and the receptionist's desk. This assumes that
someone in the physical office planning stage anticipated a high potential for violence in
that office. {I wonder why?}
I was tempted to let Phyl scream her head off, but remembered the presence of a uniformed
'Security Person' in the building lobby. The two behind the glass partition looked like, and
acted like the sort who would love to smack an unruly 'client' down. /Bored and smug would be
how I summed up how the two women appeared.\
Luckily, Phyl is already tapering off her drugs usage, so, there is a small cushion with
which to maneuver around this unholy edifice of Mammon.
I wonder if Phyllis's doctor could refer her to another clinic, one a little more
compassionate to people in pain? (Couldn't they let you finish the paperwork while you wait
in that little room for the always late doctor?)
This story has me enraged for Phyllis and also you. I am so sorry. Two weeks. The
audacity. Making her wait even a day! (I am almost crying in frustration. So very sorry)
While I definitely agree that ruling classes have deteriorated remarkably over the last
few decades, I don't think the old days were very fair either. Fairness is of interest -- in
fact, it's crucially important -- in a society composed of people who are more or less equal
and autonomous. It's a way to get along without a lot of conflict and risk. In an highly
unequal society, like those of the US and the UK, it's much less valuable than access to the
levers of power. You don't have to get along with those you can crush or brush aside. As the
scene here in the US continues to deteriorate, I expect concepts like fairness and justice to
seem more and more quaint to the movers and shakers and fixers, until finally the general
system breaks down completely. It's anybody's guess what will succeed that.
I think this loss of fair play is partly because many have realized that fortunes can be
made simply by gaining exceptions to established rules and laws. There have always been
exceptions, here and there, but our situation now is there are exceptions to established
rules everywhere. Companies can now simply lobby for some exclusive benefit or to ignore some
law that everyone else must follow, and then collect a risk free guaranteed profit for
essentially doing nothing.
Many large firms use these exceptions in the form of legal protections not available to
their competitors to both attain and maintain their competitive advantage. These protections
include ignoring existing laws, profiting from illegal businesses where profits exceed fines,
and profiting from exclusive U.S. government subsidies not available to competitors. The
banking and drug industry are notorious for routinely engaging in illegal practices that
generate profits which far exceed the fines that regulators impose when these firms are
caught. Preferential government subsidies that benefit a single company in an industry are
now also acceptable business strategy as companies like Amazon can obtain confidential
agreements with the U.S. Post office to ship packages for at least half of what UPS and FedEx
would charge for the same deliveries. A subsidy like this contributes to the many reasons
that its competitors are driven into bankruptcy, and probably explains why Amazon's retail
business
loses money everywhere except in the U.S.
Many small firms, especially tech unicorns in their early days, use these exceptions in
the same way. Amazon started as a small company that would sell mail-order books in a way
that allowed it to avoid sales tax. Early Uber investors were probably attracted by a belief
that government will look the other
way while it made cab rides cheaper by ignoring local taxi regulation, then transferring
all its business costs to its drivers, and then collecting a substantial fee for each of taxi
fare. AirBnB started as a small company whose rent would also ignore local hotel regulations,
zoning laws, health laws to prevent public health hazards, and fire safety codes. Small drug
companies like Turing Pharmaceuticals can simply acquire patents for drugs with no substitute
and then raise prices by 5,456%.
The problem is that too many of these risk free 'rent seeking' opportunities can overwhelm
an economy filled with corporations who are all chasing the highest risk adjusted rate of
return. When there are too many of these rent seeking opportunities in an economy then its
companies will select only these risk-less rent seeking strategies, while abandoning all
riskier but socially productive profit strategies like the pursuit of new breakthroughs,
product innovations, design quality, superior service, and product reliability. A related
negative outcome which you hint at with 'fair play' is most of these rents offer particular
exclusions from laws designed to protect society like those prohibiting consumer or investor
fraud, prohibiting worker exploitation, ensuring consumer safety, and maintaining financial
market stability.
So an economy with systemic rent seeking often incentivizes its corporations to abandon
their socially productive profit strategies, and then replace them with risk-less 'rent'
strategies where profit comes from ignoring laws that protect our society from fraud,
exploitation, and economic disruption.
Jeff Bezos was the first thing that popped into my mind. The Technocracy –with no
room for humanity, where the masses serve as hosts for 24/7 parasites – the second.
In this neck of the woods,Silicon Valley, the infestation of unfairness reflects itself
everywhere, particularly in the homelessness. Cars, the way they're driven, and how they are
judged, are also a perfect example. You can see it in very pricey new model cars with
dangerously blinding LED lights as the norm (which an insane National Highway Traffic Safety
Administration has yet to address after over a decade of complaints); so called demon
light headlight adaptations which make the car appear like a predatory night stalker in
one's rearview mirror; and disturbing personalized license plates, saw one the other day that
said MALWARE. And then there's the judgment by vehicle. After having lived where I am for
over a decade, was asked by a new neighbor, in a brand new vehicle, if I needed directions,
as if I was lost, when I stopped to speak with another neighbor in my not clunker looking,
almost 20 year old car. It cut me to the bone, as words can.
Small businesses are increasingly losing their shirts and being shut down due to amoral
commercial property owners; Amazon; Google, Facebook and Apple Campuses ™; and
corrupt mayors and city council members' neighborhood planning ™.
The Silicon Valley CalTrain commuter line just had its 16th pedestrian fatality of the
year in early December (a thirty two year old female youth therapist), and a hospitalized,
attempted 17th fatality, 9 days later; despite ever increasing rail vigilance. Meanwhile the
Local News™ keeps alluding to track improvements versus addressing the now tangible
despair. It's all gut rending and no surprise that Santa Clara County led California in
negative migration between 2018 – 2019. Unfortunately many were left with no means to
even leave, and/or couldn't leave their loved ones who needed them..
The age old term walking in another person's shoes – implying looking beyond
oneself, treating others fairly, and not taking ones luck in life as an indicator that
they're worthier people – seems utterly lost on many who are doing well and wish the
millions of 'losers' would disappear from their sight.
Who will be the new Wright Patman?
Who will be the new Sal Pecora?
Prior generations provided guidance on how to identify and call out unfairness, and get
meaningful results, for the benefit of the citizenry.
With absolutely 100% respect to the original posters and their points, I'd side w/Vlade
and argue that there are some serious rose-tinted glasses being worn.
Yes, (in my opinion) there was an era of "fair play" .but this was a flash-in-the-pan
consequence of WWII. As rightfully the bottom 95% earned their just desserts after years of
sacrifice for their country and rescuing the elites from the literal existential threat of
authoritarianism.
Now we're merely reverting to the time immemorial-style of 'every person for themselves'
social ruthlessness. sadly.
As I recall, the elites were in no danger from authoritarianism in the 1900s. Au
contraire, they profited at every turn from the acts of authoritarianism. Prescott Bush and
other business leaders (sic) did business with the Nazis and Fascists, and even with the
Japanese imperium. These days, platforms and algorithms setvup by the Elites of this time
loot and pollute and accelerate the many races to the bottom.
Good thing for that "life force" that when the last Elite human (possibly the last human
of any sort) dies, there will be other species already carving out niches of precedence and
preference It hurts, a little, to know we won't be missed
This post is a tad deceptive. It sounds like a review of neoliberalism and all that has
happened since c. 1980 when in fact it is now The Question. What is fair play/ What is/was
fair play and how do we create it going forward. Now that there can be no growth, very little
manufacturing and no labor unions as we once knew them. Automation and an elite class of
oligarchs and their functionaries are taking over. States/Nations still have their
constitutions but they are creating internal conflict as the old ways disappear back into
what Varoufakis calls a new feudalism. Like upstart above, however, I have only experienced
fair play in the courts, never in economic situations. But then I'm old, b. 1946, and female.
So I'm keeping an open mind as best I can, like the above clips from David, Clive, Vlade and
PK. One thing to add from the FR24 Debate on good regulation – it was pointed out by
one panelist that regulations are stricter in the EU for going into business, but on a
"horizontal" basis. Whereas it is easy to go into Bz in the US, all you need are vertical
connections. I took this to describe the fact that many corporations are monopolies. But
connections are few and far between. And lurking in the wings, as we all know, is climate
change. The new discussion about societal collapse has started. Now would be an excellent
time to interject the concept of fair play. I am optimistic because there is a basic, rock
solid strength in fair play that might serve to make it a survivor.
I've mentioned before that my father, an investment manager who retired around the time
Yves started, made a similar point prospectively. Background: he ran a smallish private firm
in Indiana, but it gave him rather wide exposure, including in a large industrial firm, plus
direct investments, besides the stock market.. Plus, my mother inherited a (then) good-sized
farm that was operated by a tenant.
His comment was that a culture of honesty saved a lot of money, otherwise spent on
guarding your interests, watching the watchers, hiring lawyers, etc. His firm shied away from
investing in anything with a hint of shadiness.
This is merely confirmatory of Yves' point, but from a different point of view and from
before the cultural changes (aka crapification) her post goes over.
And come to think, a younger relative who is a corporate lawyer told us, from her
contemporary experience, that handshake agreements are NOT a good idea. They tend to lead to
her getting involved, and she ain't cheap, nor are the consequences predictable.
I would add that I think human institutions, like human beings, have a life cycle, so to a
great extent the vagaries of, say, Brexit are a result of predictable senescence. Not that
you want to experience the down side, as we seem to be doing.
Your word is your bond.
Another old-fashioned saying that might yet make a comeback, starting with some undergrad
research paper on forgotten sayings of, say, the mid-20th century.
On the opening mention of recruiters and employees ghosting I'd like to add a few thoughts
of how different things are in that regard.
We're now all supposed to be part of some social network or another because we need to get
our names out there and grow our networks. Those services then turn around and pelt you with
emails and phone calls non-stop if you're whatever flavor of the moment they deem desirable.
They also don't give you the time of day if they decide you're not. And those services have
tried to evolve new tools to prevent you turning them away or ignoring them. Emails with
"decision required" and polls and notices that seem to imply if you don't respond they'll
kick you off. That's problem since any boss can fire you for any reason at any time. And they
definitely mention that you're not being polite or fair by not responding to an email
conversation you didn't initiate for a job position you didn't inquire about on a service you
didn't ask them to use.
I have a job I like so I was really annoyed that one recruiter on Indeed couldn't take no
for an answer and demanded I tell them why I wasn't going to permit them to sell my resume to
a potential job opening. I don't understand why we're supposed to be at everyone else's beck
and call and they don't have to respond to even polite overtures from us.
So it's more than just fair play seems to be missing in our society right now. It's that
whatever echoes of fairness exist are used to abuse the people who believe in them. They
steal your time, your attention, your professional connections, anything they can. Then they
complain about you not responding. That's another facet of this that I really don't like.
There is so much one can say on this topic. Unfortunately, I am increasingly pessimistic
and of the view that nothing will really change until we suffer a true calamity as was the
case in the past.
An oversimplifying example. My father was a combat veteran from the Korean War, having
been just a little young to serve in WWII. There was a clear sense of inter-relationship in
this generation. They experienced the depths of the depression and the massive loss of life
and destruction of WWII. My dad eventually became the COO of one of the most powerful
financial services firms in the US. His generation of leaders would never have considered the
(1) levels of compensation relative employees as appropriate, (2) becoming predators on their
customers, they prized their customer relationships, (3) using the firms balance sheet to
gamble at the casino in a heads they win, tails you lose game. It simply wasn't in their DNA.
They had suffered too much to jeopardize shared prosperity and general welfare.
When my father took early retirement he had a unique resume and was offered very serious
positions of prestige and power, with high levels of compensation. He turned them all down,
as did his piers, as they violated an inherent code of ethics and fairness that they didn't
need to articulate it was just their from their shared sacrifices earlier in life.
In my experiences on Wall Street, both as a banker and as a CFO of firms, this would be
anathema.
My only source of hope is that our daughter's generation, she is 27, sees this for what it
is. They fully understand that our society is failing and eschew the loss of fairness on
multiple levels. They consciously avoid politics and participation, not out of laziness, but
because they see our leaders (both political and business) as fundamentally corrupt. She and
her friends have no interest in voting for a neo-liberal (e.g., Biden, Buttagieg, etc.) who
is just better behaved than Trump. They are well educated, have gone to excellent schools,
and want something more from life than a high paying Wall Street job.
We see so much goodness in them, yet worry that it will take a global war or financial
collapse leading to depression to reset our society.
Reagan pocketed a huge, at the time, $2,000,000 speaking fee. That provided the imprimatur
that cashing in was okey-dokey. Later grifters looked on with amusement pondering the blood,
sweat, toil and tears of others that led to their own book and speaking shakedown deals with
multiples of that fee in laundered money.
Two assertions in this post caught my eye:
Firms "that adopted nobler objectives did better in financial terms than ones that focused on
maximizing shareholder value."
I believe firms that adopted nobler objectives -- may -- have done better over the
long-term than firms that focused on maximizing shareholder value but next I wonder about how
well the managers did in the short-term [perhaps even the long-term after correcting for the
differences in the qualities and abilities of the management] in each type of firm. I suppose
mediocre managers did very much better when "focused on maximizing shareholder value". Before
engaging the relatively long read of the linked post discussing details of the study which
the main post refers to -- I also wonder how the referenced study deals with immoral acts
which are not quite clearly immoral -- like outsourcing. Over the long-run outsourcing is bad
for a country, bad for the resilience of a firm, and bad for the firm over the long-run
before we are dead. However, I believe many of the firms that "adopted nobler objectives" --
and remained steadfast to them -- were driven out of business by price competition.
The second assertion:
"Another aspect of the decline in the importance of fair dealing is the notion of the
obligations of power, [w]hat individuals in a position of authority have a duty to."
In regard to this assertion, I immediately recalled Machiavelli's "the Prince". Many of
the ideas of noblesse oblige were anchored in the power and authority of the Catholic
[Universal] Church. Though in conflict with a God Chosen Monarch -- noblesse oblige operated
to attach similar moral authority to the Aristocratic Classes. In my Youth I thought of
Machiavelli as completely unmoral. Later when I learned more about his life and actions I
realized his "Prince" unveiled the unmoral reality behind the operations of monarchical and
aristocratic actions. Neoliberalism has succeeded in stripping all moral coverings from power
and through the efforts of an extremely well-funded Thought-Collective and propaganda machine
it has divorced thinking about morality from power -- except as a thin fig-leaf. Most
significantly it has exalted Power and its co-worker Wealth to positions of 'moral goodness'.
Fair dealing in the Neoliberal moral universe is a slogan without content to fool those
unaware and/or unwilling to 'see'.
I also feel much of the nostalgia for noblesse oblige and critique of the Neoliberal Age
may originate from the residual conflicts and cross-envies between 'Old'-money and
'New'-money. Old-money has already forgotten the immoral origins of its wealth.
Much of this post is related to Brexit -- something I avoided study of or comment upon and
still little understand. I excuse myself as someone squeamish about traffic accidents and
train wrecks though powerful feelings of sadness overwhelm me.
The heart of this post resides in the ancient question of the tie between morality and its
enforcement -- the question for how you would act given a "cloak of invisibility" which is a
prop for posing concrete questions about how you might act without the constraints of dealing
with any of the moral consequences or implications of your acts. I may be a fool -- but I
believe most all of Humankind believes in Justice [and acts Justly] -- the Justice which I
believe The Rev Kev equates to 'fairness' -- which is a much weaker word. But I also believe
there are a certain number of individuals who do not care about Justice and the Neoliberal
Thought Collective has somehow transformed this indifference ['disregard' -- 'disdain for']
Justice into a moral imperative and belittled Justice as a throw-back to benighted times
past.
We live in DarkTimes when the very worst among us claim the most and worse still brand
themselves as praise-worthy while using their colossally disproportionate Power and Wealth to
squelch criticism and amplify their accolades often self-accolades through their wholly owned
Media.
"... we have sent the factories to distant lands and eliminated your jobs, and all the meaning and purpose in your lives -- and cheap stuff from Asia is your consolation prize. Enjoy ..."
"... Homelessness in America runs way deeper than just the winos and drug addicts living on the big city sidewalks. ..."
All the people of America, including the flyovers, are responsible for the sad situation
we're in: this failure to reestablish a common culture of values most people can subscribe to
and use it to rebuild our towns into places worth caring about. Main Street, as it has come to
be, is the physical manifestation of that failure. The businesses that used to occupy the
storefronts are gone, except for second-hand stores. Nobody in 1952 would have believed this
could happen. And yet, there it is: the desolation is stark and heartbreaking.
Even George Bailey's "nightmare" scene in It's a Wonderful Life depicts the
supposedly evil Pottersville as a very lively place, only programmed for old-fashioned
wickedness: gin mills and streetwalkers. Watch the movie and see for yourself.
Pottersville is way more appealing than 99 percent of America's small towns today,
dead as they are.
The dynamics that led to this are not hard to understand. The concentration of retail
commerce in a very few gigantic corporations was a swindle that the public fell for.
Enthralled like little children by the dazzle and gigantism of the big boxes, and the free
parking, we allowed ourselves to be played.
The excuse was "bargain shopping," which actually meant we have sent the factories to
distant lands and eliminated your jobs, and all the meaning and purpose in your lives -- and
cheap stuff from Asia is your consolation prize. Enjoy
The "bones" of the village are still standing but the programming for the organism of a
community is all gone: gainful employment, social roles in the life of the place, confidence in
the future. For a century starting in 1850, there were at least five factories in town. They
made textiles and later on, paper products and, in the end, toilet paper, ironically enough.
Yes, really.
They also made a lot of the sod-busting steel ploughs that opened up the Midwest, and cotton
shirts, and other stuff. The people worked hard for their money, but it was pretty good money
by world standards for most of those years.
It allowed them to eat well, sleep in a warm house, and raise children, which is a good
start for any society. The village was rich with economic and social niches, and yes, it was
hierarchical, but people tended to find the niche appropriate to their abilities and
aspirations -- and, believe it or not, it is better to have a place in society than to have no
place at all, which is the sad situation for so many today.
Homelessness in America runs way deeper than just the winos and drug addicts living on
the big city sidewalks.
It seems there's a major political party exactly working against a common American
culture. They jeer at the thought of it. It seems to be the main platform, above all
else.
It is a major party alright BRH, but it is no so much political as it is economic and
socially stratified. They are opulent, self consumed and greedy as hell (literally). There
can only be so many parasites sucking the lifeblood out of any herd of servant beasts, and
they can only suck so long on their hosts before the poor beasts fall over and die. And that
is the tipping point, where we lose enough life blood that we can no longer stand upright,
but drop to the deck and are consumed. It is the classic Goose that laid the Golden Egg fairy
tale being acted out in real life and coming to a neighborhood near you soon.
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Beautiful, thoughtful post Jim, yet to be honest it fills me with a sense of anxiety, and
this is simply because the catastrophic events you forecast, although for the better in the
long run (as they will compel a return to a world made by hand, or the recovery of human
scale) will nonetheless bring much suffering to a lot of people ( including my own family). I
would personally like to believe there is another way a more sustainable civilization could
be attained than on the heels of societal collapse. I do believe the world is full of
mystery, and that life itself is a series of unfolding miracles we lack the capacity to
comprehend due to our limited perspective. Yet perhaps you are right and some type of
collapse is inevitable before a new beginning can be made. If such be the case, as
individuals we will be compelled to tap into inner potentials that will needed to meet the
approaching apocalypse, potentials which currently lie dormant and undeveloped. Maybe in the
process of doing so we will recover our wholeness as well.
The new US defense bill, agreed on by both parties, includes sanctions on executives of companies involved in the completion
of Nordstream 2. This is companies involved in laying the remaining pipe, and also companies involved in the infrastructure around
the arrival point.
This could include arrest of the executives of those companies, who might travel to the United States. One of the companies
is Royal Dutch Shell, who have 80,000 employees in the United States.
Some people believe 'the market' for crude oil is a fair and effective arbiter of the industry supply and demand.
But if we step back an inch or two, we all can see it has been a severely broken mechanism during this up phase in oil.
For example, there has been long lags between market signals of shortage or surplus.
Disruptive policies and mechanisms such as tariffs, embargo's, and sanctions, trade bloc quotas, military coups and popular revolutions,
socialist agendas, industry lobbying, multinational corporate McCarthyism, and massively obese debt financing, are all examples
of forces that have trumped an efficient and transparent oil market.
And yet, the problems with the oil market during this time of upslope will look placid in retrospect, as we enter the time beyond
peak.
I see no reason why it won't turn into a mad chaotic scramble.
We had a small hint of what this can look like in the last mid-century. The USA responded to military expansionism of Japan by
enacting an oil embargo against them. The response was Pearl Harbor. This is just one example of many.
How long before Iran lashes out in response to their restricted access to the market?
People generally don't respond very calmly to involuntary restriction on food, or energy, or access to the markets for these things.
In Uncle Sam Land, "freedom" has two meanings. Rich people are free to do as they like. The
rest of us are free to live under a bridge and starve.
We do have one right: The Right To Obey.
The whole society is organized around obedience, and the purpose of public education is to
make sure every one obeys. Modern schools are more accurately called "day prisons", with all
the cameras, metal detectors, armed police, isolation rooms, etc. I wonder how many people
realize that "lockdown" is straight out of the criminal prison system, and is now a regular
occurrence for little kids.
'Free World'? What exactly does that mean? What does 'Freedom' mean? I 'freely' admit I
simply have no idea what people mean when they urgently bleat words like that at me.
To me, freedom applies to an action. You are free to do this, or you are free to do that.
Which is, of course, actions that are constrained or allowed by various laws passed by local,
state, federal and/or international entities. I would suppose that the amount of freedom you
have depends on haw many laws have been passed in your own country to criminalize various
activities.
Has anyone done such an analysis, to define which countries have limited their citizens
behaviour? Simplistically, which countries have written the most laws?
I'll be willing to bet they are the 'democracies' that are most bellicose about protecting
'freedoms'. Let's face facts, politicians just love to keep passing laws, otherwise they have
no reason to exist. I unreasonably think there should be another superior law, that any
government should only be able to have so many laws. If they want to have yet another one,
take some other law away. Otherwise 'freedoms' are just being chipped away at,
constantly.
'Freedom', as a thing unto and onto itself, seems a completely meaningless concept. I keep
wondering why politicians aren't asked what they are talking about when they roar about
'freedom' as a general term.
"... "There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it -- there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies." ..."
"... Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and -- perhaps most of all -- its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development. ..."
"... Emphasizing to policymakers not only the importance of investment, but also the direction of that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato has influenced the way American politicians speak about the state's potential as an economic engine. In her vision, governments would do what so many traditional economists have long told them to avoid: create and shape new markets, embrace uncertainty and take big risks. ..."
Meet the Leftish Economist With a New Story About Capitalism
Mariana Mazzucato wants liberals to talk less about the redistribution of wealth and more
about its creation. Politicians around the world are listening.
By Katy Lederer
Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan,
but inside -- in a Columbia University conference space full of scientists, academics and
businesspeople advising the United Nations on sustainability -- the air conditioning was on
full blast.
For a room full of experts discussing the world's most urgent social and environmental
problems, this was not just uncomfortable but off-message. Whatever their dress -- suit,
sari, head scarf -- people looked huddled and hunkered down. At a break, Dr. Mazzucato
dispatched an assistant to get the A.C. turned off. How will we change anything, she wondered
aloud, "if we don't rebel in the everyday?"
Dr. Mazzucato, an economist based at University College London, is trying to change
something fundamental: the way society thinks about economic value. While many of her
colleagues have been scolding capitalism lately, she has been reimagining its basic premises.
Where does growth come from? What is the source of innovation? How can the state and private
sector work together to create the dynamic economies we want? She asks questions about
capitalism we long ago stopped asking. Her answers might rise to the most difficult
challenges of our time.
In two books of modern political economic theory -- "The Entrepreneurial State" (2013) and
"The Value of Everything" (2018) -- Dr. Mazzucato argues against the long-accepted binary of
an agile private sector and a lumbering, inefficient state. Citing markets and technologies
like the internet, the iPhone and clean energy -- all of which were funded at crucial stages
by public dollars -- she says the state has been an underappreciated driver of growth and
innovation. "Personally, I think the left is losing around the world," she said in an
interview, "because they focus too much on redistribution and not enough on the creation of
wealth."
Her message has appealed to an array of American politicians. Senator Elizabeth Warren,
Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's
thinking into several policy rollouts, including one that would use "federal R & D to
create domestic jobs and sustainable investments in the future" and another that would
authorize the government to receive a return on its investments in the pharmaceutical
industry. Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez,
Democrat of New York, and her team on the ways a more active industrial policy might catalyze
a Green New Deal.
Even Republicans have found something to like. In May, Senator Marco Rubio of Florida
credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his
proposal to jump-start economic growth. "We need to build an economy that can see past the
pressure to understand value-creation in narrow and short-run financial terms," he wrote in
the introduction, "and instead envision a future worth investing in for the long-term."
Formally, the United Nations event in September was a meeting of the leadership council of
the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts
who advise on topics like gender equality, poverty and global warming. Most of the attendees
had specific technical expertise -- Dr. Mazzucato greeted a contact at one point with,
"You're the ocean guy!" -- but she offers something both broad and scarce: a compelling new
story about how to create a desirable future.
'Investor of first resort'
Originally from Italy -- her family left when she was 5 -- Dr. Mazzucato is the daughter
of a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when
she moved to the United States. She got her Ph.D. in 1999 from the New School for Social
Research and began working on "The Entrepreneurial State" after the 2008 financial crisis.
Governments across Europe began to institute austerity policies in the name of fostering
innovation -- a rationale she found not only dubious but economically destructive.
"There's a whole neoliberal agenda," she said, referencing the received free-market
wisdom that cutting public budgets spurs economic growth. "And then the way that traditional
theory has fomented it or not contested it -- there's been kind of a strange symbiosis
between mainstream economic thinking and stupid policies."
Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory
taught in most academic departments: its assumption that the forces of supply and demand lead
to market equilibrium, its equation of price with value and -- perhaps most of all -- its
relegation of the state to the investor of last resort, tasked with fixing market failure.
She has originated and popularized the description of the state as an "investor of first
resort," envisioning new markets and providing long-term, or "patient," capital at early
stages of development.
In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician
as much as an economist. She has written of waging what the historian Tony Judt called a
"discursive battle," and scrutinizes descriptive terms -- words like "fix" or "spend" as
opposed to "create" and "invest" -- that have been used to undermine the state's appeal as a
dynamic economic actor. "If we continue to depict the state as only a facilitator and
administrator, and tell it to stop dreaming," she writes, "in the end that is what we
get."
As a charismatic figure in a contentious field that does not generate many stars -- she
was recently profiled in Wired magazine's United Kingdom edition -- Dr. Mazzucato has her
critics. She is a regular guest on nightly news shows in Britain, where she is pitted against
proponents of Brexit or skeptics of a market-savvy state.
Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director
general of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr.
Mazzucato for, in his view, cherry-picking her case studies, underestimating economic
trade-offs and defining industrial policy too broadly. In January, in an academic piece
written with one of his Cato colleagues, Terence Kealey, he called her "the world's greatest
exponent today of public prodigality."
Her ideas, though, are finding a receptive audience around the world. In the United
Kingdom, Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and
Theresa May, a former Prime Minister, and she has counseled the Scottish leader Nicola
Sturgeon on designing and putting in place a national investment bank. She also advises
government entities in Germany, South Africa and elsewhere. "In getting my hands dirty," she
said, "I learn and I bring it back to the theory."
The 'Mission Muse'
During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning
to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore
a brightly colored glass necklace that has become something of a trademark on the economics
circuit. Having traveled to five countries in eight days, she was fighting off a cough.
"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature
reference is to the original mission to the moon -- a state-spurred technological revolution
consisting of hundreds of individual feeder projects, many of them collaborations between the
public and private sectors. Some were successes, some failures, but the sum of them
contributed to economic growth and explosive innovation.
Dr. Mazzucato's platform is more complex -- and for some, controversial -- than simply
encouraging government investment, however. She has written that governments and state-backed
investment entities should "socialize both the risks and rewards." She has suggested the
state obtain a return on public investments through royalties or equity stakes, or by
including conditions on reinvestment -- for example, a mandate to limit share buybacks.
Emphasizing to policymakers not only the importance of investment, but also the
direction of that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato
has influenced the way American politicians speak about the state's potential as an economic
engine. In her vision, governments would do what so many traditional economists have long
told them to avoid: create and shape new markets, embrace uncertainty and take big
risks.
... ... ...
Earlier in the day, she pointed at an announcement on her laptop. She had been nominated
for the first Not the Nobel Prize, a commendation intended to promote "fresh economic
thinking." "Governments have woken up to the fact the mainstream way of thinking isn't
helping them," she said, explaining her appeal to politicians and policymakers. A few days
later, she won.
Then she would advocate free banking, like Selgin. Better more efficient banking is a huge
and profitable investment for government.
So before the leftwards jump on her idea of investment, start here and explain why
suddenly, making finance more efficient for everyone is a bad idea.
Or ask our knee jerkers, before they jump on her ideas with all their delusions, why not
invest in dumping the primary dealer system? That is obviously inefficient and generates the
ATM costs we pay. Why not remove that with a sound investment f some sort?
Everything is through the eye of the beholder, for lelftwards it is the wonder of central
planning, for the libertariaturds it is about efficiency via decentralization.
Then comes meetup, and waddya know, each side brings a 200 page insurance contract they
want guaranteed before any efficiency changes are made. The meeting selects business as
normal. We will select business as normal, our economists will approve.
I am thrilled / s at the feeling of fulfillment I, well, feel, that an academic deems the
obvious. It definitely, indicates that we are approaching, wokeness !
Economists are beginning to evolve, again, almost, but not quite capturing the curl of the
real time world.
" There's a whole neoliberal agenda," she said, referencing the received free-market wisdom
that cutting public budgets spurs economic growth. "And then the way that traditional theory
has fomented it or not contested it -- there's been kind of a strange symbiosis between
mainstream economic thinking and stupid policies."
That is a deep vision that needs to be unpacked. My impression of traditional theory is
that it discourages the neoliberal, market deism.
In 2012, when economist Thomas Philippon was looking into some data, something odd caught
his attention.
His homeland, France, was undergoing another revolution, although a much different one: a
revolution in the country's telecommunication market. A new mobile operator, Free, had
entered the market and disrupted it almost overnight. The new operator slashed prices,
offering plans that hadn't been seen before in France.
France's three legacy mobile operators were forced to react and drop their own prices. It
didn't help. In only three months, Free's market share reached 4 percent. At the end of the
following year, its market share tripled. Today, Free controls 15 to 16 percent of the
market, making it France's third largest mobile operator. (If you add the six virtual
operators to the mix -- meaning companies who lease broadband space -- you'll get a total of
10 different mobile operators in a country with a population one-fifth the size of the United
States.)
"Digging deeper into that crystallized everything for me," says Philippon. "It was an
oligopoly based on three legacy carriers that lobbied very hard to prevent anybody from
getting a fourth (mobile) license. For 10 years they were successful. But then, in 2011, the
regulator changed and gave a license [to] Free. It wasn't a technological change or a change
in consumers' taste. It was purely a regulatory decision."
For French consumers, this one decision changed everything. Instead of paying $55 for a
1-gigabyte plan, the new prices for much better plans cost half that. And prices continued to
drop. Today, a Free 60-gigabyte plan costs only $12.
But Philippon wasn't just interested in what the new competition in the French telecom
industry said about French markets. Having lived in the United States since 1999, he compared
the French telecom revolution to the American market. The numbers blew his mind. While in
France the number of mobile operators was rising, in the US the number was getting smaller
(and that number might even decline further, if the planned Sprint-T-Mobile merger goes
through).
The result was a huge price gap between the two countries.
"France went from being much more expensive to much cheaper in two years," he says. "The
change in price was drastic -- a relative price move of 50 percent. In such a big market with
gigantic firms, that's a big change. And it was not driven by technology, it was driven by
pro-competition regulation." He immediately adds, just to emphasize the irony: "It happened
in France of all places, a country that historically had a political system that made sure
there wasn't too much competition. This is not the place where we expected this kind of
outcome."
The opposite was very surprising too: The level of competition in the United States, the
role model of free-market democracy, was declining.
Philippon, an acclaimed professor of finance at the New York University Stern School of
Business, kept pulling that thread. He gathered an overwhelming amount of data on various
markets, took a few steps back to look at the big picture, and then identified a pattern. The
result is "The Great Reversal," his recent book, in which he explores and explains when, why,
and how, as his subtitle puts it, "America Gave Up on Free Markets."
The telecom story is just one of many examples Philippon provides throughout the book of
non-competitive US markets, in which most or all of the power is concentrated in the hands of
a few big companies. It's a situation that makes it almost impossible for new competitors to
enter and lower prices for consumers. The airline market is another example, as is the
pharmaceutical industry, the banking system, and the big tech companies such as Google and
Facebook, who have no real competition in the markets they operate in.
The book's main argument has a refreshing mix of both right- and left-leaning economic
thinking. It goes like this: During the last 20 years, while the European Union has become
much more competitive, the United States has become a paradise for monopolies and oligopolies
-- with a few players holding most of the market share. As US companies grew bigger, they
became politically powerful. They then used their influence over politicians and regulators,
and their vast resources, to skew regulation in their favor.
The fight over net neutrality, to name one example, demonstrates it well.
"Guess who lobbied for that? It's a simple guess -- the people who benefited from it, the
ISP's [internet service providers]. And they are already charging outrageous prices, twice as
high [as] any other developed country," Philippon says.
This growing concentration of power in the hands of a few has affected everything and
everyone. It has inflated prices because consumers have fewer options. Wages are stagnant
because less competition means firms don't have to fight over workers. Financial investment
in new machinery and technology has plummeted because when companies have fewer competitors
they lose the incentive to invest and improve. It has driven CEO compensation up, and
workers' compensation down. It has caused a spike in inequality, which in turn has ignited
social unrest.
If all of this is too much to wrap your head around, Philippon puts a price tag on it:
$5,000 per year. That's the price the median American household pays every year for the lost
competition. That's the cost of the United States becoming a Monopoly Land.
How did this happen? According to Philippon, it's a story with two threads. The European
side of this story happened almost by mistake. The American side, on the contrary, was no
coincidence.
When the European Union was formed in the early 1990s, there was a lot of suspicion
between the member states, namely France and Germany. (Two World Wars tend to have that
effect.) This mistrust birthed pan-European regulators who enjoyed an unprecedented amount of
freedom, more powerful than any of the member countries' governments.
"We did that mostly because we didn't really trust each other very much," he says. Now, 20
years later, "it turns out that this system we created is just a lot more resilient towards
lobbying and bad influences than we thought."
At the same time in the United States, the exact opposite was happening. Adopting a
free-market approach, regulators and legislators chose not to intervene. They didn't block
mergers and acquisitions, and let big companies get bigger.
This created a positive feedback loop: As companies grew stronger, the regulators got
weaker, and more dependent on the companies they are supposed to regulate. Tens of millions
of dollars were channeled into lobbying. The Supreme Court's Citizens United decision gave
corporate money even more political influence.
At some point, big companies started using regulation itself to prevent new competitors
from entering the market.
The result wasn't free markets, but "the opposite -- market capture," says Philippon,
referring to a situation in which the regulator is so weak it depends completely on the
companies it regulates to design regulation.
Philippon is not the only one who's making these claims. A group of economists from the
University of Chicago Booth School of Business holds a similar view. They are called
Neo-Brandeisian, after the late Justice Louis Brandeis, who, a century ago, fought to broaden
antitrust laws. They believe the big tech companies, for example, managed to rig the system,
and fly under current antitrust regulation. They think it is time to break them apart.
But not everyone agrees with Philippon's narrative or his conclusions. Economists like
Edward Conard, author of "The Upside of Inequality," thinks Philippon's claim that big
companies are evidence of less competition is upside down. According to his criticism, it's
exactly the opposite: These companies became big and powerful because they innovate and give
a lot of value to consumers. He also argues that the conclusion that Europe is more
competitive and innovative than the United States is preposterous, given that the biggest
tech companies are American, not European.
Philippon addresses this counterclaim in his book. The United States is one giant market
of English speakers. Theoretically, if you have a good idea for a new product and you can
finance it, you have more than 300 million potential users on day one. In the EU, on the
other hand, there are 28 countries, with residents who speak 24 different languages. It's not
as simple.
Philippon, who by the age of 40 was named one of the top 25 promising economists by the
International Monetary Fund, also differentiates himself from the Chicago school of thought
in one important way: He's not dogmatic, he's pragmatic. Instead of a one-size-fits-all
solution to the problem, he suggests a more nuanced approach. This is exactly what makes his
case both unique and somewhat tricky to grasp. His approach is neither right nor left.
"The idea that free markets and government intervention are opposites, that's bogus. So
half of me agrees with the Chicago School and half disagrees," he says.
"But if you think that you can get to a free market without any scrutiny by the
government, that's crazy. That's simply untrue empirically. We need to make entry easier to
increase competition, that's the objective," he says. "And the way to do so sometimes means
more government intervention."
OK, but how do you do that? According to Philippon, each case is different.
"In some cases it will be by more intervention. Like maybe force Facebook to break from
WhatsApp. And sometimes it will be by less intervention. Kill a bunch of regulations and
requirements for small companies," he says.
The first idea, at least, has caught a lot of public attention during the last year, and
has been a talking point of the presidential campaigns of Senators Bernie Sanders and
Elizabeth Warren. Facebook's CEO Mark Zuckerberg was recorded saying that if Warren wins, it
will "suck for us." Warren's plan for the big tech companies, for example, includes
"reversing mergers," which means uncoupling WhatsApp and Instagram from Facebook. Her plan
would also forbid Amazon being both a marketplace and a vendor at the same time.
But can any of these interventions actually happen? And if so, what would they mean for
American consumers? Those are more complicated questions.
If big tech companies were broken up, Philippon estimates that the average American
consumer won't be affected financially.
"Since people don't pay these companies directly, it won't change the bottom line for the
middle class, it won't have a big impact on people's disposable income," he says.
What would have a tremendous impact on Americans' lives and income is to keep on going
beyond the big tech companies. "We should go after the big ticket items -- telecom,
transport, energy, and healthcare. That's where you want action, but there is much less
bipartisan support for that," he says.
Something similar to the French telecom revolution is still far from happening in the
United States, but the fact that the 2020 campaign is already pushing competition-promoting
ideas back into the public discourse is a reason for cautious optimism, according to
Philippon. Nevertheless, he warns, we should not let this mild optimism mislead us.
"Free markets are like a public good: It is in nobody's interest to protect them.
Consumers are too dispersed and businesses love monopolies," he says. "So to take free
markets for granted, that's just stupid."
(Shaul Amsterdamski is senior economics editor
for Kan, Israel's public broadcasting corporation.)
(Hmmm. Our largest monthly bill is for 'telecom',
from Comcast, for TV, phone & internet service.
There's no competitive offering in our town.)
"...Our largest monthly bill is for 'telecom',
from Comcast, for TV, phone & internet service..."
[I got the same information from the service tech doing the annual clean and test on my
propane fireplace insert yesterday, in reference to his parents though. They were on Verizon
Fios for cable. He thought they should dump cable for a web-TV solution and just use cell
phones. Their bill was over $400/month. Mine is a little over $200/month for the same
service, which in both cases includes land line. In my zip code Verizon does not bundle Fios
with mobile. The only difference that I know is that we have neither any premium channels nor
DVR boxes and I assume that his parents must have both to run up a bill that high. When we
pony up for Fios Gb, then at least for three years our bill will fall below $100/month, then
return to a higher monthly yet if we do not take another new contract after that upgrade
contract ends. Verizon only makes new contracts when new services are added or upgraded.
Customers get next to no benefit for loyalty/retention. We have both Verizon and Comcast
available in our area. I have had both in my present home at different times, but hate
Comcast for failures on their part to provide tall vehicle clearance to pass down my driveway
until forced to do so by the power company whose poles they must use and for a duplicate
billing error where they billed me for two separate addresses and put me into collections for
the one that I never resided at since I never saw that bill or knew of it prior to the first
collections call.]
Bernie Sanders unveils plan to boost broadband
access, break up internet and cable titans https://cnb.cx/34TzaQw
CNBC - Jacob Pramuk - Dec 6
Bernie Sanders unveiled a plan Friday to expand broadband internet access as part of a
push to boost the economy and reduce corporate power over Americans.
In his sprawling "High-Speed Internet for All" proposal, the Vermont senator and
Democratic presidential candidate calls to treat internet like a public utility. His campaign
argues that the internet should not be a "price gouging profit machine" for companies such as
Comcast, AT&T and Verizon.
Sanders' plan would create $150 billion in grants and aid for local and state governments
to build publicly owned broadband networks as part of the Green New Deal infrastructure
initiative. The total would mark a massive increase over current funding for broadband
development initiatives. The proposal would also break up what the campaign calls "internet
service provider and cable monopolies," stop service providers from offering content and end
what it calls "anticompetitive mergers."
Sanders and his rivals for the 2020 Democratic presidential nomination have pushed to
boost high-speed internet access for rural and low-income Americans, saying it has become a
necessity to succeed in school and business. The self-proclaimed democratic socialist has
unveiled numerous plans to root out corporate influence as he runs near the top of a jammed
primary field. ...
Aa excellent article that brings no new ideas to the debate but updates the debate to today.
One thing economist Thomas Philippon did not mention is that voters must turn out the
elected and get new ones who will vote to create more and vigorous competition instead of
oligopoly.
"... "There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it -- there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies." ..."
"... Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and -- perhaps most of all -- its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development. ..."
Meet the Leftish Economist With a New Story About Capitalism
Mariana Mazzucato wants liberals to talk less about the redistribution of wealth and more about
its creation. Politicians around the world are listening.
By Katy Lederer
Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan, but
inside -- in a Columbia University conference space full of scientists, academics and
businesspeople advising the United Nations on sustainability -- the air conditioning was on
full blast.
For a room full of experts discussing the world's most urgent social and environmental
problems, this was not just uncomfortable but off-message. Whatever their dress -- suit, sari,
head scarf -- people looked huddled and hunkered down. At a break, Dr. Mazzucato dispatched an
assistant to get the A.C. turned off. How will we change anything, she wondered aloud, "if we
don't rebel in the everyday?"
Dr. Mazzucato, an economist based at University College London, is trying to change
something fundamental: the way society thinks about economic value. While many of her
colleagues have been scolding capitalism lately, she has been reimagining its basic premises.
Where does growth come from? What is the source of innovation? How can the state and private
sector work together to create the dynamic economies we want? She asks questions about
capitalism we long ago stopped asking. Her answers might rise to the most difficult challenges
of our time.
In two books of modern political economic theory -- "The Entrepreneurial State" (2013) and
"The Value of Everything" (2018) -- Dr. Mazzucato argues against the long-accepted binary of an
agile private sector and a lumbering, inefficient state. Citing markets and technologies like
the internet, the iPhone and clean energy -- all of which were funded at crucial stages by
public dollars -- she says the state has been an underappreciated driver of growth and
innovation. "Personally, I think the left is losing around the world," she said in an
interview, "because they focus too much on redistribution and not enough on the creation of
wealth."
Her message has appealed to an array of American politicians. Senator Elizabeth Warren,
Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's
thinking into several policy rollouts, including one that would use "federal R & D to
create domestic jobs and sustainable investments in the future" and another that would
authorize the government to receive a return on its investments in the pharmaceutical industry.
Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez, Democrat of New
York, and her team on the ways a more active industrial policy might catalyze a Green New
Deal.
Even Republicans have found something to like. In May, Senator Marco Rubio of Florida
credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his
proposal to jump-start economic growth. "We need to build an economy that can see past the
pressure to understand value-creation in narrow and short-run financial terms," he wrote in the
introduction, "and instead envision a future worth investing in for the long-term."
Formally, the United Nations event in September was a meeting of the leadership council of
the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts who
advise on topics like gender equality, poverty and global warming. Most of the attendees had
specific technical expertise -- Dr. Mazzucato greeted a contact at one point with, "You're the
ocean guy!" -- but she offers something both broad and scarce: a compelling new story about how
to create a desirable future.
'Investor of first resort'
Originally from Italy -- her family left when she was 5 -- Dr. Mazzucato is the daughter of
a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when she
moved to the United States. She got her Ph.D. in 1999 from the New School for Social Research
and began working on "The Entrepreneurial State" after the 2008 financial crisis. Governments
across Europe began to institute austerity policies in the name of fostering innovation -- a
rationale she found not only dubious but economically destructive.
"There's a whole neoliberal agenda," she said, referencing the received free-market
wisdom that cutting public budgets spurs economic growth. "And then the way that traditional
theory has fomented it or not contested it -- there's been kind of a strange symbiosis between
mainstream economic thinking and stupid policies."
Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory
taught in most academic departments: its assumption that the forces of supply and demand lead
to market equilibrium, its equation of price with value and -- perhaps most of all -- its
relegation of the state to the investor of last resort, tasked with fixing market failure. She
has originated and popularized the description of the state as an "investor of first resort,"
envisioning new markets and providing long-term, or "patient," capital at early stages of
development.
In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician
as much as an economist. She has written of waging what the historian Tony Judt called a
"discursive battle," and scrutinizes descriptive terms -- words like "fix" or "spend" as
opposed to "create" and "invest" -- that have been used to undermine the state's appeal as a
dynamic economic actor. "If we continue to depict the state as only a facilitator and
administrator, and tell it to stop dreaming," she writes, "in the end that is what we get."
As a charismatic figure in a contentious field that does not generate many stars -- she was
recently profiled in Wired magazine's United Kingdom edition -- Dr. Mazzucato has her critics.
She is a regular guest on nightly news shows in Britain, where she is pitted against proponents
of Brexit or skeptics of a market-savvy state.
Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director general
of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr. Mazzucato for,
in his view, cherry-picking her case studies, underestimating economic trade-offs and defining
industrial policy too broadly. In January, in an academic piece written with one of his Cato
colleagues, Terence Kealey, he called her "the world's greatest exponent today of public
prodigality."
Her ideas, though, are finding a receptive audience around the world. In the United Kingdom,
Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and Theresa May,
a former Prime Minister, and she has counseled the Scottish leader Nicola Sturgeon on designing
and putting in place a national investment bank. She also advises government entities in
Germany, South Africa and elsewhere. "In getting my hands dirty," she said, "I learn and I
bring it back to the theory."
The 'Mission Muse'
During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning
to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore a
brightly colored glass necklace that has become something of a trademark on the economics
circuit. Having traveled to five countries in eight days, she was fighting off a cough.
"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature
reference is to the original mission to the moon -- a state-spurred technological revolution
consisting of hundreds of individual feeder projects, many of them collaborations between the
public and private sectors. Some were successes, some failures, but the sum of them contributed
to economic growth and explosive innovation.
Dr. Mazzucato's platform is more complex -- and for some, controversial -- than simply
encouraging government investment, however. She has written that governments and state-backed
investment entities should "socialize both the risks and rewards." She has suggested the state
obtain a return on public investments through royalties or equity stakes, or by including
conditions on reinvestment -- for example, a mandate to limit share buybacks.
Emphasizing to policymakers not only the importance of investment, but also the direction of
that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato has influenced
the way American politicians speak about the state's potential as an economic engine. In her
vision, governments would do what so many traditional economists have long told them to avoid:
create and shape new markets, embrace uncertainty and take big risks.
Inside the conference, the news was uniformly bleak. Pavel Kabat, the chief scientist of the
World Meteorological Organization, lamented the breaking of global temperature records and said
that countries would have to triple their current Paris-accord commitments by 2030 to have any
hope of staying below a critical warming threshold. A panel on land use and food waste noted
that nine species account for two-thirds of the world's crop production, a dangerous lack of
agricultural diversity. All the experts appeared dismayed by what Jeffrey Sachs, the S.D.S.N.'s
director, described as the "crude nationalism" and "aggressive anti-globalization" ascendant
around the world.
"We absolutely need to change both the narrative, but also the theory and the practice on
the ground," Dr. Mazzucato told the crowd when she spoke on the final expert panel of the day.
"What does it mean, actually, to create markets where you create the demand, and really start
directing the investment and the innovation in ways that can help us achieve these goals?"
Earlier in the day, she pointed at an announcement on her laptop. She had been nominated for
the first Not the Nobel Prize, a commendation intended to promote "fresh economic thinking."
"Governments have woken up to the fact the mainstream way of thinking isn't helping them," she
said, explaining her appeal to politicians and policymakers. A few days later, she won.
Reply Thursday, November 28, 2019 at 12:05 PM
"... "Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism and created an environment of popular distrust of big business." ..."
"... The rise of stock options to compensate corporate managers entrenched shareholder value by aligning the interests of managers and shareholders. Companies began sacrificing productive investments, environmental protections, and worker security to ensure shareholder returns were maximised. The fear of stock market verdicts on quarterly reports left them no choice. ..."
"... This account fits a widespread belief that financiers and rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a simple solution: liberate companies from the demands of shareholders. Freed from the short-term pursuit of delivering shareholder returns, companies could then return to long-term plans, productive investments, and higher wages. ..."
"... In the 1960s, a group of firms called the conglomerates were pioneering many of the practices that later became associated with the shareholder revolution: aggressive mergers, divestitures, Leverage buy-outs (LBOs), and stock repurchasing. ..."
"... These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy by developing new techniques to systematically raise money from financial markets. They wheeled and dealed their divisions and used them to tap financial markets to finance further predatory acquisitions. Instead of relying on profits from productive operations, they chased speculative transactions on financial markets to grow. ..."
"... With fortunes to be made and lost, no manager could ignore the stock market. They became increasingly concerned with their position on financial markets. It was in this context that corporate capitalism first spoke of the desire to 'maximise shareholder value'. While sections of the corporate establishment were put on the defensive, the main reason for this was not that shareholders imposed their preferences on management. Instead, it was competitor managers using the shareholder discourse as a resource to expand and gain control over other firms. Capital markets became the foundation of a new form of financialised managerial power. ..."
"... Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves. ..."
"... Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's Greenmail, would disagree. Nelson Putz, er, Peltz just forced P&G to start eating into the foundation of the business to feed his greed. There's nothing amorphous or anonymous about activist shareholders, especially when they take over a company and start carving it up like a Thanksgiving turkey. ..."
"... Corporations are artificial creations of the state. They exist in their current form under a complex series of laws and regulations, but with certain privileges, such as Limited Liability Corporations. It is assumed that these creatures will enhance economic activity if they are given these privileges, but there is no natural law, such as gravity, that says these laws and regulations need to exist in their current form. They can be changed at will be legislatures. ..."
"... The semantics of "shareholder primacy" are problematic. The word "shareholder" in this formula echoes the kind problems that whirl around a label like "farmer". ..."
"... I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the mechanisms our Elites constructed so they could loot Corporate wealth. There is no misunderstanding involved. ..."
"... This fits within a Marxist analysis as the material conditions spurred the ideological justifications of the conditions, not the ideology spurring the conditions. ..."
"... I think about stock markets as separate from companies and I'm wrong. Each of the stock exchanges I have heard of started off when 4-5 local companies invested a few thousand each in renting a building and a manager to run an exchange hoping it would attract investment, promote their shares and pay for itself. ..."
By Sahil Jai Dutta, a lecturer in political economy at the University of Goldsmiths, London and Samuel Knafo, a Senior Lecturer
in the Department of International Relations at the University of Sussex. Originally published at the
PERC blog
In the late 1960s, a young banker named Joel Stern was working on a project to transform corporate management. Stern's hunch was
that the stock market could help managers work out how their strategies were performing. Simply, if management was effective, demand
for the firm's stock would be high. A low price would imply bad management.
What sounds obvious now was revolutionary at the time. Until then profits were the key barometer of success. But profits were
a crude measure and easy to manipulate. Financial markets, Stern felt, could provide a more precise measure of the value of management
because they were based on more 'objective' processes, beyond the firm's direct control. The value of shares, he believed, represented
the market's exact validation of management. Because of this, financial markets could help managers determine what was working and
what was not.
In doing this, Stern laid the foundation for a 'shareholder value' management that put financial markets at the core of managerial
strategy.
Stern would probably never have imagined that these ideas would 50 years later be castigated as a fundamental threat to the future
of liberal capitalism. In recent times everyone from the
Business Roundtable group of global
corporations, to the Financial Times
, to the British Labour Party has lined
up to condemn the shareholder ideology.
"Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism and created an environment
of popular distrust of big business."
It is not the first time Stern's creation has come under fire. A decade ago Jack Welsh, former CEO of General Electric declared
shareholder value " probably the dumbest
idea in the world ". And 15 years before then, British political commentator Will Hutton, among others, found paperback fame
with his book The State We're In preaching much the same message.
To critics, the rise of shareholder value is a
straightforward story , that has been told
over and over again.
Following a general crisis of postwar profitability in the late 1970s, corporate managers came under fire from disappointed shareholders
complaining about declining returns. Shareholder revolts forced managers to put market capitalisation first. The rise of stock
options to compensate corporate managers entrenched shareholder value by aligning the interests of managers and shareholders. Companies
began sacrificing productive investments, environmental protections, and worker security to ensure shareholder returns were maximised.
The fear of stock market verdicts on quarterly reports left them no choice.
This account fits a widespread belief that financiers and
rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a simple solution: liberate companies from
the demands of shareholders. Freed from the short-term pursuit of delivering shareholder returns, companies could then return to
long-term plans, productive investments, and higher wages.
In two recent
articles , we have argued that this
critique of shareholder value has always been based on a misunderstanding. Stern and the shareholder value consultants did not aim
to put shareholders first. They worked to empower management. Seen in this light, the history of the shareholder value ideology appears
differently. And it calls for alternative political responses.
To better understand Stern's ideas, it is important to grasp the broader context in which he was writing. In the 1960s, a
group of firms called the conglomerates were pioneering many of the practices that later became associated with the shareholder revolution:
aggressive mergers, divestitures, Leverage buy-outs (LBOs), and stock repurchasing.
These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy by developing new techniques to
systematically raise money from financial markets. They wheeled and dealed their divisions and used them to tap financial markets
to finance further predatory acquisitions. Instead of relying on profits from productive operations, they chased speculative transactions
on financial markets to grow.
These same tactics were later borrowed by the 1980s corporate raiders, many of which were in fact old conglomerators from the
1960s. The growing efficiency with which these raiders captured undervalued firms on the stock market and ruthlessly sold off their
assets to finance further acquisitions put corporate America on alert.
With fortunes to be made and lost, no manager could ignore the stock market. They became increasingly concerned with their
position on financial markets. It was in this context that corporate capitalism first spoke of the desire to 'maximise shareholder
value'. While sections of the corporate establishment were put on the defensive, the main reason for this was not that shareholders
imposed their preferences on management. Instead, it was competitor managers using the shareholder discourse as a resource to expand
and gain control over other firms. Capital markets became the foundation of a new form of financialised managerial power.
These changes made the approach of management consultants championing shareholder value attractive. The firm founded by Stern
and his business partner Bennett Stewart III took advantage of the situation. They sold widely their ideas about financial markets
as a guideline for corporate strategy to firms looking to thrive in this new environment.
As the discourse and tools of shareholder value took hold, they served three distinct purposes. First, they provided accounting
templates for managerial strategies and a means to manage a firm's standings on financial markets. The first and most famous metric
for assessing just how much value was being created for shareholders was one Stern himself helped develop, Economic Value Added (EVA).
Second, they became a powerful justification for the idea that managers should be offered share options. This was in fact an old
idea floated in the 1950s by management consultants such as Arch Patton of McKinsey as a means to top-up relatively stagnant managerial
pay. Yet it was relaunched in this new context as part of the promise to 'align the interests of managers with shareholders.' Stock
options helped managerial pay skyrocket in the 1990s, a curious fact for those who believe that managers were 'disciplined' by shareholders.
Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder
pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard
workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems.
Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with
shareholders to pocket huge returns for themselves.
Though shareholder demands are now depicted as the problem to be solved, the same reformist voices have in the past championed
shareholders as the solution to corporate excesses. This was the basis for the hope around the '
shareholder spring ' in 2012, or the
recent championing of activist shareholders as '
labour's last weapon' .
By challenging the conventional narrative, we have emphasised how it is instead the financialisation of
managerialism,
or the way in which corporations have leveraged their operations on financial markets, that has characterised the shareholder value
shift. Politically this matters.
If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more
space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not
need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder
primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives
are now so ready to abandon shareholder primacy, is because it never really existed.
Imagine if all corporations were equally owned by the entire population? Then shareholder primacy would just be representative
democracy, no?
But, of course, corporations are not even close to being equally owned by the entire population and part of the blame must
lie with government privileges for private credit creation whereby the need to share wealth and power with the entire population
is bypassed – in the name of "efficiency", one might suppose.
But what good is the "efficient" creation of wealth if it engenders unjust and therefore dangerous inequality and levies noxious
externalities?
"An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice."
Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's Greenmail, would disagree. Nelson Putz,
er, Peltz just forced P&G to start eating into the foundation of the business to feed his greed. There's nothing amorphous or
anonymous about activist shareholders, especially when they take over a company and start carving it up like a Thanksgiving turkey.
Shareholder primacy or Creditor Primacy? Creditors, or bond holders, appear to be the more powerful. Shareholders have no legal
recourse to protect their "ownership." Bondholders do have legal recourse. Either way, many corporations more serve up their than
serve their customers and the general public. There is this belief that if a corporation is profitable, that's good but does not
include a public interest (for example Monsanto and Roundup.)
Managers used to fear the creditors more than shareholders, that's very much true.
But that has gone out of the window recently, as debt investors just chase return, so it's seller's world, and few of them
(debt investors) want to take losses as they are much harder to recoup than before. So extend and pretend is well and alive.
In other words, one of the byproducts of QE is that the company management fears no-one, and is more than happy to do whatever
they want.
The problem is the agency. If we assume that we want publicly traded companies (which IMO is not a given), the current incentives
are skewed towards management paying themselves.
The problem with things like supervisory boards, even if they have high worker representation, is that those are few individuals,
and often can be (directly or indirectly) corrupted by the management.
The "shares" incentive is just dumb, at least in the way it's currently structured. It literally gives only upside, and often
even realisable in short/medium term.
Corporations are artificial creations of the state. They exist in their current form under a complex series of laws and
regulations, but with certain privileges, such as Limited Liability Corporations. It is assumed that these creatures will enhance
economic activity if they are given these privileges, but there is no natural law, such as gravity, that says these laws and regulations
need to exist in their current form. They can be changed at will be legislatures.
This is why I despise the Citizens United decision which effectively gives these artificial creations the same rights as people.
I don't believe that Thomas Jefferson would have found that to be "a self-evident truth." I think that Citizens United will be
regarded as something akin to the Dred Scott decision a century from now.
Shareholder primacy is an assumption that hasn't been challenged over the past couple of decades, but can be controlled by
society if it so desires.
The semantics of "shareholder primacy" are problematic. The word "shareholder" in this formula echoes the kind problems
that whirl around a label like "farmer".
A shareholder is often characterized in economics texts as an individual who invests money hoping to receive back dividends
and capital gains in the value and valuation of a company as it earns income and grows over time. Among other changes -- changes
to the US tax laws undermined these quaint notions of investment, and shareholder.
The coincident moves for adding stock options to management's pay packet [threats of firing are supposed to encourage the efforts
of other employees -- why do managers needs some kind of special encouragement?], legalizing share buybacks, and other 'financial
innovations' -- worked in tandem to make investment synonymous with speculation and shareholders synonymous with speculators,
Corporate raiders, and the self-serving Corporate looters replacing Corporate management.
This post follows a twisting road to argue previous "critique of shareholder value has always been based on a misunderstanding"
and arrives at a new critique of shareholder value "challenging the conventional narrative." This post begins by sketching Stern's
foundation for 'shareholder value' with the assertion imputed to him: "if management was effective, demand for the firm's stock
would be high. A low price would imply bad management." The post then claims "What sounds obvious now was revolutionary at the
time." But that assertion does not sound at all obvious to me. In terms of the usual framing of the all-knowing Market the assertion
sounds like a tautology, built on a shaky ground of Neolilberal economic religious beliefs.
I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the mechanisms our Elites constructed
so they could loot Corporate wealth. There is no misunderstanding involved.
"But that assertion does not sound at all obvious to me."
I think you're severely understating this. I'd call it total [family blogging family blog]. As you go on to imply, it takes
an act of pure faith, akin to religious faith in Dawkins' sense of belief in the face of evidence to the contrary, to assume or
assert this nonsense, except insofar as it's tautological – if the purpose of management is to have a high share price, then obviously
the latter reflects the effectiveness of the former.
Well, we're all stakeholders now. There probably isn't much value to merely being a shareholder at this point. First let's
ask for a viable definition of "value" because it's pretty hard to financialize an undefined "value" and nobody can financialize
an empty isolated thing like the word "management". Things go haywire.
What we can do with this seed of an idea is finance the preservation and protection of some defined value. And we can, in fact,
leverage a healthy planet until hell freezes over. No problem.
This fits within a Marxist analysis as the material conditions spurred the ideological justifications of the conditions,
not the ideology spurring the conditions.
Easy to bust this open by legislating against limited liability. Corporates were not always limited liability, but it was promoted
as a means to encourage formation of risky businesses that would otherwise never develop due to risk averse owners or managers.
This was promoted as a social compact, delivering employment and growth that would otherwise be unattainable. Like everything
in life, human greed overcomes social benefits.
Governments world wide would and should step up and regulate to regain control, rather than fiddling at the margins with corporate
governance regulation. They won't, because powerful vested interests will put in place those politicians who will do their bidding.
Another nail in the democracy coffin. The only solution will be a cataclysmic event that unites humanity.
I think about stock markets as separate from companies and I'm wrong. Each of the stock exchanges I have heard of started
off when 4-5 local companies invested a few thousand each in renting a building and a manager to run an exchange hoping it would
attract investment, promote their shares and pay for itself.
I remember when one of the major components of the Hong Kong Exchange, Hutchison, had a bad year and really needed some
black magic to satisfy the shareholders, the Deputy Chairman abandoned his daytime job and spent trading hours buying and selling
for a fortnight to contribute something respectable for the annual accounts. Somebody paid and never knew it.
This was at the start of creative accounting and the 'anything goes' version of capitalism that the article connects with Litton
Industries, Teledyne and LTV but was infecting the entire inner circle of the money.
"... As part of the scam, parents would "donate" money to a fake charity run by Singer. The funds would then be laundered to either pay off an SAT or ACT administrator to take the exams or bribe an employee in college athletics to name the rich, non-athlete children as recruits. Virtually every scenario relied on multiple layers of corruption, all of which eventually allowed wealthy students to masquerade as "deserving" of the merit-based college slots they paid up to half a million dollars to "qualify" for. ..."
"... When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor policy change, they generally do not get it. ..."
"... The conclusion of the study? We live in an oligarchy: ..."
The college bribery scandal reveals an ugly truth: our society is unjust, dominated by a small elite. Actress Lori
Loughlin, who has been implicated in the Operation Varsity Blues scandal. Credit:
Featureflash Photo Agency/Shutterstock The most destructive
and pervasive myth in America today is that we live in a meritocracy. Our elites, so the myth goes, earned their places at Yale and
Harvard, on Wall Street and in Washington -- not because of the accident of their birth, but because they are better, stronger, and
smarter than the rest of us. Therefore, they think, they've "earned" their places in the halls of power and "deserve" to lead.
The fervor with which so many believe this enables elites to lord over those worse off than they are. On we slumber, believing
that we live in a country that values justice, instead of working towards a more equitable and authentically meritocratic society.
Take the Operation Varsity Blues scandal. On Tuesday, the FBI and federal prosecutors announced that 50 people had been charged in,
as Sports Illustrated put it , "a nationwide college admissions scheme that used bribes to help potential students cheat
on college entrance exams or to pose as potential athletic recruits to get admitted to high-profile universities." Thirty-three parents,
nine collegiate coaches, two SAT/ACT exam administrators, an exam proctor,
and a college athletics administrator were among those charged. The man who allegedly ran the scheme, William Rick Singer, pled
guilty to four charges of racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the U.S., and obstruction of
justice.
As part of the scam, parents would "donate" money to a fake charity run by Singer. The funds would then be laundered to either
pay off an SAT or ACT administrator to take the exams or bribe an employee in college athletics to name the rich, non-athlete children
as recruits. Virtually every scenario relied on multiple layers of corruption, all of which eventually allowed wealthy students to
masquerade as "deserving" of the merit-based college slots they paid up to half a million dollars to "qualify" for.
Cheating. Bribery. Lying. The wealthy and privileged buying what was reserved for the deserving. It's all there on vivid display.
Modern American society has
become increasingly and
banally corrupt , both in the ways in which "justice" is meted out and in who is allowed to access elite education and the power
that comes with it.
The average American citizen has very little power, as a 2014
study by Princeton University found. The research reviewed 1,779 public policy questions asked between 1981 and 2002 and the
responses by different income levels and interest groups; then calculated the likelihood that certain policies would be adopted.
A proposed policy change with low support among economically elite Americans (one-out-of-five in favor) is adopted only about
18 percent of the time, while a proposed change with high support (four-out-of-five in favor) is adopted about 45% of the time.
That's in stark contrast with policies favored by average Americans:
When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover,
because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor
policy change, they generally do not get it.
The conclusion of the study? We live in an oligarchy:
our analyses suggest that majorities of the American public actually have little influence over the policies our government
adopts. [T]he preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact
upon public policy.
The belief in the myth of merit hurts the smart kid with great grades who aced his SATs but was still rejected from Yale and Harvard.
It hurts talented athletes who have worked their tails off for so many years. It hurts parents who have committed hundreds of school
nights and weekends to their children. It hurts HR departments that believe degrees from Ivy League schools mean that graduates are
qualified. It hurts all of us who buy into the great myth that America is a democratic meritocracy and that we can achieve whatever
we want if only we're willing to expend blood, toil, sweat, and tears.
At least in an outright class system like the British Houses of Lords and Commons, there is not this farcical playacting of equal
opportunity. The elites, with their privilege and titles, know the reason they are there and feel some sense of obligation to those
less well off than they are. At the very least, they do not engage in the ritual pretense of "deserving" what they "earned" -- quite
unlike those who descend on Washington, D.C. believing that they really are better than their compatriots in flyover country.
All societies engage in myth-making about themselves. But the myth of meritocracy may be our most pervasive and destructive belief
-- and it mirrors the myth that anything like "justice" is served up in our courts.
Despite all this evidence, most Americans embrace a version of the Calvinist beliefs promulgated by their forebears, believing
that the elect deserve their status. We remain confident that when our children apply to college or are
questioned by police , they will receive just and fair outcomes. If our neighbors' and friends' kids do not, then we assure ourselves
that it is they who are at fault, not the system.
The result has been a gaping chasm through our society. Lives are destroyed because, rather than working for real merit-based
systems and justice, we worship at the altar of false promises offered by our institutions. Instead we should be rolling up our sleeves
and seeing Operation Varsity Blues for what it is: a call to action.
Barbara Boland is the former weekend editor of the Washington Examiner . Her work has been featured on Fox News, the
Drudge Report, HotAir.com, RealClearDefense, RealClearPolitics, and elsewhere. She's the author of Patton Uncovered , a book
about General Patton in World War II. Follow her on Twitter@BBatDC.
If conservatives are going to dance the graves of Aunt Beckie, the backlash is going to be big. Sure this is a 'scandal' but it
seems these parents weren't rich enough to bribe their kids in college the right way, like Trumps and Kushner, and probably slightly
duped into going along with this scheme. (It appears the government got the ring leader to call all defendants to get evidence
they participated in a crime.)
Just wait until the mug shot of Aunt Beckie is on the internet and Olivia Jade does 60 minutes doing teary eyed interview of
how much she loves her mother. And how many parents are stress that their kids will struggle in the global competitive economy.
I fully recall the days of getting government computing contracts. Once a certain threshold was reached, you discovered you had to
hire a "lobbyist," and give him a significant amount of money to dole out to various gatekeepers in the bureaucracy for your contracts
to be approved. That was the end of our government contracts, and the end was hastened by the reaction to trying to complain about
it.
Thank you, Barbara Boland, for "The Myth of American Meritocracy" and for linking ("Related Articles" box) to the 2012 "The Myth
of American Meritocracy" by Ron Unz, then publisher of the American Conservative.
The 26,000-word Ron Unz research masterpiece was the opening salvo in the nation-wide discussion that ultimately led to the federal
court case nearing resolution in Boston.
"The Myth of American Meritocracy -- How corrupt are Ivy League admissions?" by Ron Unz, The American Conservative, Nov 28, 2012:
Barbara Boland "While black people make up only 13 percent of the population, they make up 42 percent of death row and 35 percent
of those who are executed."
Ms. Boland: According to the US Department of Justice, African Americans [13 per cent of the population] accounted for 52.5% of
all homicide offenders from 1980 to 2008.
I agree with prodigalson. This is the type of article that TAC should uphold as a 'gold standard'. One reason I read, and comment
on, TAC is that it offers thought provoking, and sometimes contrarian, articles (although the constant harping on transgender BS
gets annoying).
America has always been somewhat corrupt. But, to borrow a phrase, wealth corrupts, and uber wealth corrupts absolutely.
As Warren Buffet says "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning".
I have said it before, and I will say it again. During the next severe financial recession, if the rich are protected and coddled
and everybody else is left to fend for themselves the ARs will come out of the closets when the sheriff comes to take the house or
the pickup truck. My sense is that average Americans have had enough.
Imagine if the digital transfer of money was abolished. Imagine if everybody had to have their money in a local bank instead of
on an account in one of the major banks. Imagine if Americans saw, day after day, armored vehicles showing up at local banks to offload
sacks of currency that went to only a few individual accounts.
Instead, the elites get their financial statements showing an ever increasing pile of cash at their disposal. They see it, but
nobody else does. But, if everybody physically saw the river of wealth flowing to the elites, I believe things would change. Fast.
Right now this transfer of wealth is all digital, hidden from the view of 99.99% of Americans. And the elites, the banking industry,
and the wealth management cabal prefer it that way.
I am amazed by the media coverage of this scandal. Was anyone actually under the impression that college admissions were on the
level before these Hollywood bozos were caught red handed?
No, the meritocracy is not dead; it's not even dying. It is, in fact, alive and well and the absolute best alternative to any
other method used to separate wheat from chaff, cream from milk, diamonds from rust.
What else is there that is even half as good?
Are merit-based systems perfect? Heck, no. They've never been perfect; they will never be perfect. They are administered by people
and people are flawed. Not just flawed in the way Singer, and Huffman are flawed (and those individuals are not simply flawed, they're
corrupt) but flawed in the everyday kind of sense. Yes, we all have tendencies, biases, preferences that will -- inevitably -- leak
into our selection process, no matter how objectively strict the process may be structured, no matter how rigorously fair we try
to be.
So the fact that -- as with most things -- we can find a trace of corruption here that fact is meaningless. We can find evidence
of human corruption, venality, greed, sloth, lust, envy (all of the 7 Deadly Sins) pretty much everywhere. But if we look at the
20M students enrolled in college, the vast majority are successfully & fairly admitted through merit-based filtering systems (which
are more or less rigorous) which have been in place forever.
Ms. Boland tells us (with a straight face, no less) that "The U.S. is now a country where corruption is rampant and money buys
both access and outcomes." But what does that even mean?
Certainly money can buy access and certainly money can buy outcomes. But that's what money does. She might as well assert that
money can buy goods and services, and lions and tigers and bears -- oh my! Of course it can. Equally networks can 'buy' access and
outcomes (if my best friend is working as the manager for Adele, I'm betting he could probably arrange my meeting Adele). Equally
success & fame can buy access and outcomes. I'm betting Adele can probably arrange a meeting with Gwen Stefani .and both can arrange
a meeting with Tom Brady. So what? Does the fact that money can be used to purchase goods & services mean money or the use of money
is corrupt or morally degenerate? No, of course not. In truth, we all leverage what we have (whatever that may be) to get what we
want. That's how life works. But the fact that we all do that does not mean we are all corrupt.
But yes, corruption does exist and can usually be found, in trace amounts -- as I said -- pretty much everywhere.
So is it rampant? Can I buy my way into the NBA or the NFL? If I go to Clark Hunt and give him $20M and tell him I want to play
QB for the Chiefs, will he let me? Can I buy my way into the CEO's position at General Electric, Apple, Microsoft, Google, Sprint,
Verizon, General Motors, Toyota or any of the Fortune 500? Heck, can I even buy my way into the Governor's mansion? To become the
Mayor of Chicago? Or the Police Commissioner? No -- these things are not possible. But what I can buy is my presence on the media
stage.
What happens after cannot be purchased.
So no, by any measure, corruption is not rampant. And though many things are, in fact, for sale -- not everything is. And no matter
how much money I give anyone, I'm never gonna QB the Chiefs or play for the Lakers.
She tells us, "we are dominated by a rich and powerful elite." No, we're not. Most of us live our lives making the choices we
want to make, given the means that each of us has, without any interference from any so-called "elite". The "elite" didn't tell me
where to go to school, or where to get a job, or how to do my job, or when to have kids, or what loaf of bread to buy, or what brand
of beer tastes best, or where to go on the family vacation. No one did. The elite obviously did not tell us who to vote for in the
last presidential election.
Of course one of the problems with the "it's the fault of the elite" is the weight given institutions by people like Ms.Boland.
"Oh, lordy, the Elite used their dominating power to get a brainless twit of a daughter into USC". Now if my kid were cheated out
of a position at USC because the Twit got in, I'd be upset but beyond that who really cares if a Twit gets an undergraduate degree
from USC or Yale .or Harvard .or wherever. Some of the brightest people I've known earned their degrees at Easter PolyTechnic U (some
don't even have college degrees -- oh, the horror!); some of the stupidest have Ivy League credentials. So what?
Only if you care about the exclusivity of such a relatively meaningless thing as a degree from USC, does gaming the exclusivity
matter.
She ends with the exhortation: "The result has been a gaping chasm through our society. Lives are destroyed because, rather than
working for real merit-based systems and justice, we worship at the altar of false promises offered by our institutions. Instead
we should be rolling up our sleeves and seeing Operation Varsity Blues for what it is: a call to action."
To do what, exactly?
Toss the baby and the bathwater? Substitute lottery selection for merit? Flip a coin? What?
Again the very best method is and always will be merit-based. That is the incentive which drives all of us: the hope that if we work
hard enough and do well enough, that we will succeed. Anything else is just a lie.
Yes, we can root out this piece of corruption. Yes, we can build better and more rigorously fair systems. But in the end, merit
is the only game in town. Far better to roll-up our sleeves and simply buckle down, Winsocki. There isn't anything better.
"While black people make up only 13 percent of the population, they make up 42 percent of death row and 35 percent of those who are
executed. There are big racial disparities in charging, sentencing, plea bargaining, and executions, Department of Justice reviews
have concluded, and black and brown people are disproportionately found to be innocent after landing on death row. The poor and disadvantaged
thereby become grist for a system that cares nothing for them."
So to what degree are these "disparities" "disproportionate" in light of actual criminal behavior? To be "proportionate," would
we expect criminal behavior to correlate exactly to racial, ethnic, sex, and age demographics of society as a whole?
Put another way, if you are a victim of a violent crime in America, what are the odds your assailant is, say, an elderly, Asian
female? Approximately zero.
Conversely, what are the odds your assailant is a young, black male? Rather high, and if you yourself are a young, black male,
approaching 100 percent.
Mostly thumbs up to this article. But why you gotta pick on Calvinism at the end? Anyway, your understanding of Calvinism is entirely
upside down. Calvinists believe they are elect by divine grace, and salvation is something given by God through Jesus, which means
you can't earn it and you most assuredly don't deserve it. Calvinism also teaches that all people are made in the image of God and
worthy of respect, regardless of class or status. There's no "version" of Calvinism that teaches what you claim.
You see, free markets are a great idea in theory. Or you can call it "capitalism", or
combine the two and say "free market capitalism". There's very little wrong with it in theory.
You have an enormous multitude of participants in an utterly complex web of transitions, too
complex for the human mind to comprehend, and in the end that web figures out what values all
sorts of things, and actions etc., have.
I don't think capitalism in itself is a bad thing; what people don't like is when it veers
into neo-liberalism, when everything is for sale, when communities or their governments no
longer own anything, when roads and hospitals and public services and everything that holds
people together in a given setting is being sold off to the highest bidder. There are many
things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in
itself, not so much.
It's like nature, really, like evolution, but it's Darwin AND empathy, individuals AND
groups. The problem is, and this is where it diverges from nature, you have to make sure the
markets remain free, that certain participants -or groups thereof- don't bend the rules in
their own favor. In that sense it's very similar to what the human race has been doing to
nature for a long time, and increasingly so.
Now, if you limit the discussion to finance and economics, there would appear to be one
institution that's in an ideal place to make sure that this "rule-bending" doesn't take place,
that markets are fair and free, or as free as can be. That institution is a central bank. But
whaddaya know, central banks do the exact opposite: they are the ones making sure markets are
not free.
In the ideal picture, free markets are -or would be- self-correcting, and have an inbuilt
self-regulating mechanism. If and when prices go up too much, the system will make sure they go
lower, and vice versa. It's what we know from physics and biology as a negative -self
correcting- feedback loop. The self-correcting mechanism only activates if the system has
veered too much in one direction, but we fail to see that as good thing when applied to both
directions, too high and too low (yes, Goldilocks, exactly).
It's only when people start tweaking and interfering with the system, that it fails.
Negative feedback vs positive feedback are misunderstood terms simply because of their
connotation. After all, who wants anything negative? But this is important in the free markets
topic, because as soon as a central bank starts interfering in, name an example, housing prices
in a country, the system automatically switches from negative feedback to positive -runaway-
feedback, there is no middle ground and there is no way out anymore, other than a major crash
or even collapse.
Well, we're well on our way to one of those. Because the Fed refused to let the free market
system work. They, and the banks they represent, wanted the way up but then refused the way
down. And now we're stuck in a mindless positive feedback loop (new highs in stocks on a daily
basis), and there's nothing Jay Powell and his minions can do anymore to correct it.
The system has its own correction mechanism, but Greenspan, Bernanke, Yellen and now Powell
thought they could do better. Or maybe they didn't and they just wanted their banker friends to
haul in all the loot, it doesn't even matter anymore. They've guaranteed that there are no free
markets, because they murdered self-correction.
Same goes, again, for ECB and BOJ; they're just Fed followers (only often even crazier). In
fact since they have no petrodollar, they don't just follow, they have to do the Fed one
better. Which is why they have negative interest rates -and the US does not -yet-: it's the
only way to compete with the reserve currency. Of course today even the Fed, and "even even"
the PBOC, are discussing moving to negative rates, and by now we're truly talking lemmings on
top of a cliff.
"Let's throw $10 trillion at the wall just so home prices or stock prices don't go down!"
Yeah, but if they've been rising a lot, maybe that's the only direction they can and should go.
It may not be nice for banks and so-called "investors", but it's the only way to keep the
system healthy. If you don't allow for the negative feedback self-correction, you can only
create much bigger problems than you already have. And then you will get negative feedback
squared and cubed.
Author conflicts himself in the article. This paragraph is utterly stupid:
"I don't think capitalism in itself is a bad thing; what people don't like is when it veers
into neo-liberalism, when everything is for sale, when communities or their governments no
longer own anything, when roads and hospitals and public services and everything that holds
people together in a given setting is being sold off to the highest bidder. There are many
things that have values other than monetary ones, and neo-liberalism denies that. Capitalism in
itself, not so much."
We have a healthcare cartel and massively subsidized costs (medicare, etc). It's not a free
market at all. It's a cartel. The Fed is a true monopoly. Free markets would be much better for
roads, hospitals and public services - all of those are horrible everywhere I've lived.
Investing is the biggest scam this side of the milkyway. I see it all the time and its
nailing future generations to the deck of a sinking ship.
Everytime I see one of those multi million or multi billion jobs, like a shopping mall or
some resort going up all I can say is, "Its never going to get paid off in the investors
lifetime. Since most of the people that invested in them are in their 60's, 70's and 80's.
They just skim the money off the top until the day they die and all that will be left are
hollowed out abandoned shells for the next generations to pay taxes on just to have them torn
down and the whole polluted mess cleaned up.
NO WAY most of these projects will ever get paid off before they're totally useless to
society. Look at all those falling down apartment buildings in the cities. Once a great
investment now a great pile of worthless junk.
" In the ideal picture, free markets are -or would be- self-correcting"
Yeppers. That is why when globalists exclaim "we have a LABOR SHORTAGE in ________
industry", it's b.s.
If you have a labor shortage, the rules of supply and demand would dictate that the company
owners must pay higher prices (wages) to employees to retain them, and attract new ones. It's
exactly what happens to consumers when there is a lemon, tomato or gas shortage -- prices go up
and we all pay. When companies attract employees with higher wages, the market responds -- kids
in school realize if they want a job, they could go into that industry and get snapped up
easily -- since there's a supposed "labor shortage". And voila, no more "labor shortage" and
the market corrects itself.
That should happen, but it doesn't, as globalists manipulate the market by allowing in more
surplus labor (mass immigration) from developing countries, which is labor market manipulation
-- forever gaming the system so they always have more leverage and the upper-hand in wage
negotiations. If you have a "labor shortage" and are offering minimum wage, no one is going to
step up for those jobs, other than the immigrants you just flooded into your country.
"... Despite massive amounts of evidence to the contrary, such people now enthusiastically whitewash the decades preceding Trump to turn it into a paragon of human liberty, justice and economic wonder. You don't have to look deep to understand that resistance liberals are now actually conservatives, brimming with nostalgia for the days before significant numbers of people became wise to what's been happening all along. ..."
"... Lying to yourself about history is one of the most dangerous things you can do. If you can't accept where we've been, and that Trump's election is a symptom of decades of rot as opposed to year zero of a dangerous new world, you'll never come to any useful conclusions ..."
"... Irrespective of what you think of Bernie Sanders and his policies, you can at least appreciate the fact his supporters focus on policy and real issues ..."
"... An illiberal democracy, also called a partial democracy, low intensity democracy, empty democracy, hybrid regime or guided democracy, is a governing system in which although elections take place, citizens are cut off from knowledge about the activities of those who exercise real power because of the lack of civil liberties; thus it is not an "open society". There are many countries "that are categorized as neither 'free' nor 'not free', but as 'probably free', falling somewhere between democratic and nondemocratic regimes". This may be because a constitution limiting government powers exists, but those in power ignore its liberties, or because an adequate legal constitutional framework of liberties does not exist. ..."
From a big picture perspective, the largest rift in American politics is between those
willing to admit reality and those clinging to a dishonest perception of a past that never
actually existed. Ironically, those who most frequently use "post-truth" to describe our
current era tend to be those with the most distorted view of what was really happening during
the Clinton/Bush/Obama reign.
Despite massive amounts of evidence to the contrary, such people now enthusiastically
whitewash the decades preceding Trump to turn it into a paragon of human liberty, justice and
economic wonder. You don't have to look deep to understand that resistance liberals are now
actually conservatives, brimming with nostalgia for the days before significant numbers of
people became wise to what's been happening all along.
They want to forget about the bipartisan coverup of Saudi Arabia's involvement in 9/11, all
the wars based on lies, and the indisputable imperial crimes disclosed by Wikileaks, Snowden
and others. They want to pretend Wall Street crooks weren't bailed out and made even more
powerful by the Bush/Obama tag team, despite ostensible ideological differences between the
two. They want to forget Epstein Didn't Kill Himself.
Lying to yourself about history is one of the most dangerous things you can do. If you can't
accept where we've been, and that Trump's election is a symptom of decades of rot as opposed to
year zero of a dangerous new world, you'll never come to any useful conclusions. As such, the
most meaningful fracture in American society today is between those who've accepted that we've
been lied to for a very long time, and those who think everything was perfectly fine before
Trump. There's no real room for a productive discussion between such groups because one of them
just wants to get rid of orange man, while the other is focused on what's to come. One side
actually believes a liberal world order existed in the recent past, while the other
fundamentally recognizes this was mostly propaganda based on myth.
Irrespective of what you think of Bernie Sanders and his policies, you can at least
appreciate the fact his supporters focus on policy and real issues. In contrast, resistance
liberals just desperately scramble to put up whoever they think can take us back to a
make-believe world of the recent past. This distinction is actually everything. It's the
difference between people who've at least rejected the status quo and those who want to rewind
history and perform a do-over of the past forty years.
A meaningful understanding that unites populists across the ideological spectrum is the
basic acceptance that the status quo is pernicious and unsalvageable, while the status
quo-promoting opposition focuses on Trump the man while conveniently ignoring the worst of his
policies because they're essentially just a continuation of Bush/Clinton/Obama. It's the most
shortsighted and destructive response to Trump imaginable. It's also why the Trump-era alliance
of corporate, imperialist Democrats and rightwing Bush-era neoconservatives makes perfect
sense, as twisted and deranged as it might seem at first. With some minor distinctions, these
people share nostalgia for the same thing.
This sort of political environment is extremely unhealthy because it places an intentional
and enormous pressure on everyone to choose between dedicating every fiber of your being to
removing Trump at all costs or supporting him. This anti-intellectualism promotes an ends
justifies the means attitude on all sides. In other words, it turns more and more people into
rhinoceroses.
Eugène Ionesco's masterpiece, Rhinoceros, is about a central European town where
the citizens turn, one by one, into rhinoceroses. Once changed, they do what rhinoceroses do,
which is rampage through the town, destroying everything in their path. People are a little
puzzled at first, what with their fellow citizens just turning into rampaging rhinos out of
the blue, but even that slight puzzlement fades quickly enough. Soon it's just the New
Normal. Soon it's just the way things are a good thing, even. Only one man resists the siren
call of rhinocerosness, and that choice brings nothing but pain and existential doubt, as he
is utterly profoundly alone.
A political environment where you're pressured to choose between some ridiculous binary of
"we must remove Trump at all costs" or go gung-ho MAGA, is a rhinoceros generating machine. The
only thing that happens when you channel your inner rhinoceros to defeat rhinoceroses, is you
get more rhinoceroses. And that's exactly what's happening.
The truth of the matter is the U.S. is an illiberal democracy in practice,
despite various myths to the contrary.
An illiberal democracy, also called a partial democracy, low intensity democracy, empty
democracy, hybrid regime or guided democracy, is a governing system in which although
elections take place, citizens are cut off from knowledge about the activities of those who
exercise real power because of the lack of civil liberties; thus it is not an "open society".
There are many countries "that are categorized as neither 'free' nor 'not free', but as
'probably free', falling somewhere between democratic and nondemocratic regimes". This may be
because a constitution limiting government powers exists, but those in power ignore its
liberties, or because an adequate legal constitutional framework of liberties does not
exist.
It's not a new thing by any means, but it's getting worse by the day. Though many of us
remain in denial, the American response to various crises throughout the 21st century was
completely illiberal. As devastating as they were, the attacks of September 11, 2001 did
limited damage compared to the destruction caused by our insane response to them. Similarly,
any direct damage caused by the election and policies of Donald Trump pales in comparison to
the damage being done by the intelligence agency-led "resistance" to him.
So are we all rhinoceroses now?
We don't have to be. Turning into a rhinoceros happens easily if you're unaware of what's
happening and not grounded in principles, but ultimately it is a choice. The decision to
discard ethics and embrace dishonesty in order to achieve political ends is always a choice. As
such, the most daunting challenge we face now and in the chaotic years ahead is to become
better as others become worse. A new world is undoubtably on the horizon, but we don't yet know
what sort of world it'll be. It's either going to be a major improvement, or it'll go the other
way, but one thing's for certain -- it can't stay the way it is much longer.
If we embrace an ends justifies the means philosophy, it's going to be game over for a
generation. The moment you accept this tactic is the moment you stoop down to the level of your
adversaries and become just like them. It then becomes a free-for-all for tyrants where
everything is suddenly on the table and no deed is beyond the pale. It's happened many times
before and it can happen again. It's what happens when everyone turns into rhinoceroses.
* * *
If you enjoyed this, I suggest you check out the following 2017 posts. It's never been more
important to stay conscious and maintain a strong ethical framework.
In the past, I thought that Hong Kong was dominated by a narrow rich oligarchy with rules
that kept the input from hoi-polloi to the minimum, which meant low taxes for business and the
rich etc. From the point of view of Cato Institute it is the definition of paradise, but the
life in paradise may have its discontent.
Compare with Chile that has exemplary record of "property rights" since Pinochet era with a
constitution that makes it very hard to change, and yet, the locals are not happy and neither
Russian nor Bolivarian agitators were identfied.
Or Colombia, another shiny bastion of democracy, allowing very wide spectrum of relationship
between bosses and workers (assassinations of uppity organizers included). I would be curious
if systematic and widespread murder in the defense of freedom merits downgrading in Cato
Institute world freedom index.
Here's a handy piece of advice for non-American nations around the world: Whenever some
American starts running its mouth about crusading for Freedom, Democracy, Human Rights, or
similar propaganda slogans, get ready to defend your nation. These slogans are merely the
American version of the White Man's Burden and Western Civilizing Mission.
They are a clear and present threat that the American predator is slouching towards
you.
So Trump is coaching us deplorables that freedom is literally nonsense unless we say
"freedom from ____ ". [we have to fill in the blank space to make any sense!]
I am sure he knows that. Doesn't he? I am sure you, dear reader,knows it, too.
Trump wants freedom from taxation. And he wants to be free to oppress others. Also, see
Hudson's definition of the term in his J is for Junk Economics as Trump was totally
schooled in neoliberal economics.
"Hong Kong is a repressive police state" says Joshua Wong, and yet it is consistently near
the top of the list in the Cato Institute world freedom index.
Quote: "A recent Global Times editorial ( .. ) the West was incapable of seeing and thus
appreciating the critical role of the Communist Party of China in directing China's success
since Western dogma says government's incapable of being dynamic or innovative -- that only
the private sector is capable of being that and doing so. And thanks to the teaching of the
false Neoliberal doctrine as truth in schools and universities, Western governments and their
publics will continue to do the wrong thing by following a false path.." -- karlof1 @ 60
Quote: "If you read many who come and comment at MoA that supposedly are "educated" you
will notice that they continue to think and write in terms of the conflict being between
socialism and capitalism (...) China is 80% capitalistic as are other "socialistic" countries
but what matters is what part of the social economy is socialism versus capitalism." --
psychohistorian @ 72
Even long-ago groups (1) set aside 'capital to invest' in the shape of making tools
(costly in materials, expertise, time ), keeping seeds (ditto), training children/youth to
hunt, build shelter, give warnings, etc. Accumulating one good or another for a reserve store
in slim times, for transformation at a later date - commodities - (reeds,coverings, etc.) or
for favorable exchange, or even for coercion. By necessity, all such societies were
socialistic, in the sense that sharing and re-distribution played a vital part, without which
all would have collapsed.
Rent seeking or monopolisitic capture existed in the sense of a powerful ppl claiming a
stipend (rake-off?), leaders lived better / had more wives / more space / whatever because of
decisionary power, status, built on 'skill' or 'success' or 'x', perhaps merely dynastic,
(small tribe), or, later, because of supervision and control posts that were needed to enable
larger societies to function (Priest administration which regulated stores, exchanges,
contracts - Sumeria), often resting on an over-arching narrative like a religious one. Here
too socialism was at the core: without re-distribution to the poor, perhaps for their work,
care offered to women and children, and regular debt forgiveness (formalised in Sumeria but
existing before of course, in the 'buddy no prob' style) the society would have broken
down.
Capitalism and socialism are modern terms (18th, 19th? cent.) and are strands that exist
in all human and maybe even some animal groups. Meme key-words (i.e. not needed when
analysing how one society functions, any will be both in part) that serve today as a rallying
cry:
"Sorry...but the conflict is between socialism and capitalism...between the rich and the
working masses, especially those who work and still they remain poor....as has always
been....who says otherwise is only trying to fool the masses " Sasha 76.
Yes, a class struggle between the working 'poor' and rentier domineering 'rich' is boiling
over now.
Noirette...thanks for an interesting and informative comment...
Also for calling attention to Karlof's comment at 60...
Utilization of the Entrepreneurial aspects of Capitalism that provide for dynamicism and
innovation works as long as they're employed for the public's benefit...
This idea of the supposed 'innovation' inherent in 'entrepreneurial capitalism' is
another one of those myths that are just taken for granted and assumed to be true...
It's not quite like that...if we think of innovation as being specific to
advancements in science and technology [as opposed to say process innovation in social
organization or resource management etc]...then this idea is certainly false...
The advancement of science rests on education...it's as simple as that...the more
resources you devote to building up an academic and scientific infrastructure, the more
scientific innovations will be forthcoming...
The alleged 'dynamicism' of private enterprise is failing miserably in this regard...the
prime example being America's increasing lag in the most scientifically demanding endeavors,
like spaceflight and advanced armaments...both of which are completely privatized...
It was only during the 1960s Apollo program where an intensive top-down government effort
yielded impressive progress...that successful strategy was then promptly abandoned and
top-flight science handed off to the profit-seeking private sector...with disastrous
consequences...
Today, the US has been dependent on political rival Russia for human spaceflight for
nearly a decade...as well as rocket engines for its critical national security rocket
launches...[which it cannot manufacture itself]...
The gap in advanced armaments technology is just as startling...with Russia clearly
opening a large lead in groundbreaking hypersonic technologies, scramjet engines etc...
For those who have had an inside view of the aerospace industry over the last decades, the
gap in technical capability is truly startling...for instance, there would be no ISS if not
for the Russian Mir space station technology on which the ISS is based...
When looking at why this state of affairs has come to be, it is helpful to have again an
inside perspective on the absolutely huge academic and scientific infrastructure that was
built up during the Soviet era...
In the meantime, the capitalist US is not the least concerned with building up such a
national science capability...this is obvious...recent figures on STEM
graduates...
We note that China produces nearly 10 times as many as the US, with only four times the
population...Russia with half the US population produces as many...
We note that even Iran, with one quarter the US population [but with a decidedly socialist
system] is near the US in both categories...
The US is becoming a third-rate power in science and technology...[and no iphones and
other consumer gizmos don't really count for anything]...
The simple fact is that in order to truly innovate, you need to have a PLAN...crony
capitalism like the US defense industry, or the privatization of space technology are really
producing diddly squat...
Thanks to all posters. The information about Bolivia is sobering but very helpful. I was
struck also by karlof1's repost of his email to psychohistorian @ 60:
"...What the Chinese are doing as you noted is keeping the primary sink of Capital under
public auspices such that all major public supporting infrastructures are publicly owned and
operated. Even the Communist Party of China is publicly owned--which is what political
parties within the West ought to be so they can't be captured like the P and R-parties to
work against the public interest..."
So, I was thinking what does it mean in the US to have a publicly owned political party -
something like publicly owned businesses? Only small donations permitted to the party
coffers? Sort of like unions are structured? That seems a possible and interesting
development. This country ought to be able to attempt this.
We might say the Green Party tries, but maybe the FDR model isn't the appropriate one to
this day and age. I don't think younger folk (then me) are 'turned on' by FDR since the
generational link is broken. And maybe too they are not turned on by 'isms' either.
I like the last words of your quote above, karlof1 - maybe a "Public Interest Party", PIP
for short? I wish Grieved was posting, hope he/she is in good health. The input on China from
Grieved's research in depth has been very helpful.
Public interest is very far reaching, and takes in models from Russia and China to
Venezuela and Bolivia, with Syria and Ukraine right there in the mix as well. It's a far
reaching concept that rises above the 'ism's'.
flankerbandit @136 points out that capitalist entrepreneurial innovation is a farce,
but I would like to add some points.
Lots of really cool tech was developed in the US after WWII and up to the early 1980s.
Much of this came from giant corporate research institutes (think Bell Labs, Palo Alto
Research Center, IBM's Watson Works, etc). From the mid-1980s to the present these incredibly
productive research institutes have all but vanished. The remnants of what remains of those
corporate labs certainly don't produce very much of interest anymore.
Why did capitalism create these labs, and what happened to cause their decline?
The research institutes came into existence because AT&T used to be a monopoly.
Americans didn't have so much of a "business friendly" fetish back in the 1950s as
they do now. As a result they were extremely suspicious of and hostile to AT&T for
being a monopoly. Of course, it made sense to have a unified communications network across
the nation, so AT&T as a monopoly could provide better service than dozens of smaller
competing businesses. The capitalist propaganda against nationalization was intense, so the
public settled for hardcore regulation of the monopoly instead. Part of this regulation was a
requirement that AT&T spend a hefty chunk of their revenue on research and
development.
The problem, from a capitalist perspective, was that the amount mandated be spent on
R&D by the regulations was far more than AT&T management could come up with
profit-bearing lines of research for. As a consequence they hired scientists and set them up
in laboratories just to consume the required number of dollars. This is to say that as a
result of heavy regulations AT&T began to pour money into pure research rather
than the applied type of research that can be justified to bean counters. This resulted in
mountains of science, much of which remains lost in old filing cabinets to this day.
Those who like to meta-study science itself will tell you that most pure research doesn't
really yield anything worthwhile. At the same time, most of the really big advances come from
pure research. The successes of this pure research led AT&T to branch out into a wide
range of technologies beyond just telephones and telegraphs. This began to be a business
threat to other big players in the tech industries like IBM, who then had to set up their own
huge freewheeling research institutes in order to remain competitive. Due solely to AT&T
being forced by the government to setting up extensive research labs, many other businesses
across a multitude of sectors of the economy were likewise forced to heavily invest in
R&D.
Of course, AT&T would rather have just given that money spent on R&D to their
investors, so they lobbied to have the regulations removed. By the end of the 1970s the
American public had been successfully brainwashed by capitalist mass media into feeling a
need for "business-friendly" government, and deregulation was the order of the day
(thank you Jimmy Carter for starting that!). Even as such, people of that time were not ready
for an unregulated monopoly to control telecommunications, so AT&T was broken up into
smaller units that could focus on just making the biggest profit possible. The "Baby
Bells" rode on the momentum of their former success, neglecting research and running
their infrastructure into the ground. America then went from having the best communications
infrastructure in the world, literally decades ahead of everyone else on the planet, to
barely staying above third world status.
With Bell Labs reduced to a joke, there was no longer a justification for others like IBM
and Xerox to keep spending on pure research themselves. Pure research was rationalized away.
That said, what is referred to as "pre-market" research is still done today, even if
not in the giant corporate research institutes. This is now done in universities on the
public dime. The "innovative entrepreneurial capitalist enterprises" circle the
college campuses like vultures waiting for students and faculty to develop something they can
make money off of and when they see it they swoop in and snatch it away for a tiny fragment
of its cost and value.
The point here is that AT&T was so micromanaged by government regulators that it
should have just been directly managed by those regulators. AT&T should have been
nationalized rather than broken up. Capitalism had nothing whatsoever to do with
AT&T's prodigious technological productivity. That "innovation" was 100% the
result of government "interference" in the Market. Most of the heavy lifting for
innovation today comes from "pre-market" research at universities and is funded by the
public. Very little fundamental innovation in the world today is financed by private
investors.
The take-away? You don't need capitalism for innovation. On the contrary, capitalism
interferes with and holds back innovation.
Thanks for a very good case study...yes, for all intents and purposes AT&T might just
as well be labeled under 'state owned enterprise' at the time...
And that was another era...I will add here that the 'golden' three decades or so after the
war, life in the US for ordinary folks really was pretty good...
The shop floor worker took home a decent pay on which a family could live nicely without a
second income...own a nice home and send the kids to college...most of the manufacturing jobs
were considered 'semi-skilled' labor, but were in fact quite skilled by today's
standards...
The company president took home maybe ten times that of the shop floor worker...the
financialization of everything that wasn't nailed down had not yet even started...
I went to college in Michigan [quite far from home] in the 1980s and knew family friends
there...the elder patriarch had worked at GM, starting as just a guy on the line, but moved
up to foreman and was an incredible source of technical knowledge about manufacturing...the
house they retired in, in Grosse Pointe was nothing to sneeze at...
This kind of fair deal and upward mobility for the ordinary worker is long gone now...with
temp jobs, no benefits and working in an Amazon warehouse for 11 bucks an hour
[under sweatshop conditions literally]...
Of course this doesn't stop the government from showering King Bezos with billions of our
tax dollars to come up with some grifter scheme involving supposed rocket engines and
spacecraft...
So yes, those were much different times...and yes, capitalism does not lead to
innovation...
perceived influence over US health care of chief executives of health systems is
increasing. To the extent that the ranking validly reflects influence, the sharp rise in the
influence of chief executive officers at the expense of representatives of patients or health
professionals may underscore the increasing industrialization of health care. It is not
possible to find patients, patient advocates, clinicians, or clinician advocates at the top
of this list . This trend placing health care influencers within C-suites, accountable to
boards mostly comprising other corporate leaders, may explain the rise of business
language and thinking
They suggested that it is possible that there is a
causal association between the concentration of executive influence and problems of
patient care derived from efforts to optimize operational efficiency and financial
performance, for example, clinician burnout , the heavy burden of treatment afflicting
patients with chronic conditions, and the erection of barriers to care to optimize
'payer mix.'
Dr Montori also said in the interview
Americans increasingly find themselves in a corporate-centric healthcare
echo-chamber , one in which the public will increasingly approach tough policy decisions
having heard only the viewpoint from the top.
'The primary goals of CEOs are to advance the mission of their organization,' Montori
says. 'If all that influences healthcare are the ideas of people who advocate for the success
of their organizations, people who are not served by them will not have their voices
heard.'
Furthermore, he suggested that the public may be befuddled by the current health policy
debates, including those about universal health care and the possibility of reducing the power
of commercial health insurance companies because
in the rest of the narrative all that they hear is about are the successes of biotech, the
successes of tech companies, and the successes of healthcare corporations who achieve high
levels of innovation thanks to the bold leadership of their executives. It's why we have been
calling for greater awareness of the industrialization of healthcare for some time now
Summary
The new study by Longman, Ponce, Alvarez-Villalobos and Montori adds to the evidence that
health care has been taken over by business-trained managers, and in the US, especially by
large commercial health care organizations run by such managers.
Since we started Health Care
Renewal , we have frequently discussed the rise of generic managers, which later we
realized has been called managerialism. Managerialism is the belief
that trained managers are better leaders of health care, and every other sort of organization,
than are than people familiar with the particulars of the organizations' work. Managerialism
has become an ascendant value in health care over the last 30 years. The majority of hospital
CEOs are now management trained, but lacking in experience and training in medicine, direct
health care, biomedical science, or public health. And managerialism is now ascendant in the US
government. Our president, and many of his top-level appointees, are former business managers
without political experience or government experience.
We noted an
important article in the June, 2015 issue of the Medical Journal of Australia(1) that made
these points:
– businesses of all types are now largely run by generic managers, trained in
management but not necessarily knowledgeable about the details of the particular firm's
business
– this change was motivated by neoliberalism (also known as
economism
or market
fundamentalism )
– managerialism now affects all kinds of organizations, including health care,
educational and scientific organizations
– managerialism makes short-term revenue the first priority of all organizations
– managerialism undermines the health care mission and the values of health care
professionals
Generic or managerialist
managers by definition do not know much about health care, or about biomedical science,
medicine, or public health. They are prototypical ill-informed
leadership , and hence may blunder into actual incompetence. They are trained that they
have a right to lead any sort of organization, which breeds arrogance. These managers are not
taught about the values of health care professionals. Worse, they are taught in their business
style training about the shareholder value dogma, which states that the main objective of any
organization is to increase revenue. Thus, they often end up hostile to the
fundamental mission of health care, to put care of the patient and the health of the
population ahead of all other concerns, which we have called mission-hostile management.
(Furthermore, it appears that the shareholder value dogma is just smokescreen to cover the real
goal of managers, increasing their own wealth, e.g., look
here .) Finally, arrogance and worship of revenue allows self-interested and conflicted,
and even sometimes corrupt leadership.
Managerialists may be convinced that they are working for the greater good. However, I am
convinced that our health care system would be a lot less dysfunctional if it were led by
people who actually know something about biomedical science, health care, and public health,
and who understand and uphold the values of health care and public health professionals –
even if that would cost a lot of very well paid managerialists their jobs.
Maybe someday the top "influencers" in health care will actually be people who know
something about health care and actually care about patients' and the public's health.
John Raulston Saul, in "Voltaire's Bastards", has produced an intellectual fireworks
display that deals directly with the problem Dr.Poses sees pretty clearly. Endhoven proposes
an attack on what he sees as a regressive medieval remnant, a Guild, an attack that has been
pretty successful in a broad swath of our neoliberal world. Saul would recognize that attack
immediately, and despise it. It's what he wrote about with such fiery contempt.. And in my
opinion, he's right.
Managerialists, purveyors of "reason", are leaving a trail of disaster in pretty much every
area where their influence is powerful. Their ivy league, MBA-dominated education seemingly
has failed to provide any sense of the human feelings and needs that must be an essential
part of successful planning or policy. The bottom line trumps all else, and generates
disaster as well as shareholder value. Treat yourself, as well as tantalize your wits. Read
it.
Thanks for this post.
Two quotes that sum up much of the overpriced disfunction, imo.
Managerialism is the belief that trained managers are better leaders of health care,
and every other sort of organization, than are than people familiar with the particulars of
the organizations' work.
Better leaders toward what goal?
– managerialism makes short-term revenue the first priority of all
organizations
managerialism makes short-term revenue the first priority of all organizations
Except when it comes to manufacturing ideologies. There, they are quite capable of taking
the long view with think tanks, generational influence (stacking) of the judical system,
education, politics and policy and so on.* It's not as if they are unaware of the concept of
laying foundations. But short term revenue seems to be tightly coupled in their view to what
they get to put in their pockets which in turn (perhaps ironically by the foundation
builders: self worth by comparative metrics) has been tightly coupled to their perceived
worth as human beings.
(Ultimately, I believe, the phenomenon of comparative metrics
literally projects the homeless -or in this case the paucity of care for whole segments of
society- into existence and maintains their numbers in relation to those of the "managers.")
Interestingly, the mix of origins, whether such seminal ideas ( "eat your vegetables,
think of the starving Chineese" ) are vernacular and borrowed and repurposed or canonical
and disseminated helps in no small part to obscure the process.
*Even if the managers are not always the drivers, they are aware of the value.
More directly on topic, the difficulties in defining neoliberalism usefully I think come
from 1) an incoherent political spectrum centered on overly specific policies which will vary
according to time and place and the vicissitudes of world economy and war, rather than on class
2) the lack of a sound analysis of what bourgeois democracy is 3) an economic analysis that
omits economic history, leaving most of the discussion decontextualized.
1) Basically, the liberal state, the neoliberal state and a host of other variants share the
view of freedom as the right to buy what you can afford, to sell what you own and to do
whatever you want in the meantime. It is a vision centered on property as the essence of
humanity. See Benjamin Constant. And this is true even for people who try to imagine a
non-market sphere for other aspects of life. The most common form today is perhaps the notion
of the family as a private haven, the center of civil (as opposed to political) society. But
nobody escapes reality, this is purely ideological, an illusionary escape from class society.
The more the family is a private haven, the more it is a private prison.
The problem with placing neoliberalism on a spectrum is that practically everyone whose
opinion would be accepted as legitimate for expression, fundamentally shares this vision.
Disagreements about the inevitable lapses from the ideal are inevitable, but will change. In
the earliest days of capitalism, expropriating Church lands was liberalism, even if the Wars of
Religion, the Dutch revolution and the English reformation are conveniently omitted as
essential. A continental power like France or Russia needed more intervention in its economy to
create a military than England or Japan. The superficial differences confuse how much overlap
there is between neoliberalism and every other acceptable school.
2) Possession of property of course puts people in different places in social life.
Neoliberalism and the old liberalism alike held that freedom and justice were a balance of
classes, that the state would maintain. How interventionist the state must be, again would
vary. But the legitimacy of any intervention is held to be based not just on whether it was
meant to maintain the proper balance of classes, but upon whether it was done with
consent.
Today the usual phrase is the rule of law. But this is a claim the means justify the
ends, which is moral imbecility. Unjust laws do not make for justice.
The real justification for the rule of law is as an ends in itself, as social order no
matter what, where class freedoms are safe. The overlap between this commitment from
neoliberalism and other arrangements should be obvious, not confusing, but it is what is is.
Democracy is about equality of money. In political terms, the spectrum of capitalist forms of
the political regime, runs from the libertarian/neoliberal ideal on the left (there is a reason
libertarians reprint Constant and Mill, even Sidney!) to fascism on the right.
Fascism is an essential alternative weapon in the greater struggle, where individuals
sacrifice for the power of the nation, which means the ruling classes of the nation, in
substance though not in person. The tolerable version of social democracy lie somewhere in the
center, putting class collaboration and corporate freedom above the purest visions of freedom,
which would be preposterous universe of small business owners and farmers and professionals.
But the notion democracy means human rights is purely ideological, refuted by history. It means
citizen rights, because, the rules are all.
3) The novel issues that provoked the emergence of a neoliberalism distinct from the other
political philosophies are as much a product of economic history (change!) as the disappearance
Court vs. Country as the axis of politics in England. I suggest that, while Slobodian may be
correct that the loss of empire was hugely important to a group who devised some justifications
for neoliberalism, in practice, the decline, then disappearance of the gold standard, the
increasing importance of finance, the US hegemony over the world, the commitment to reversing
the Great Compression, to restoring a more just balance (as they see it,) between capital and
labor were important. In US domestic politics, the secular stagnation in real wages, despite
the increased labor as wives entered the labor force, were the point. And it is by no means
clear that there are any significant forces opposing this.
"... Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves. ..."
"... If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives are now so ready to abandon shareholder primacy, is because it never really existed. ..."
By
Sahil Jai Dutta, a lecturer in political economy at the University of Goldsmiths, London and
Samuel Knafo, a Senior Lecturer in the Department of International Relations at the University
of Sussex. Originally published at the PERC blog
In the late 1960s, a young banker named Joel Stern was working on a project to transform
corporate management. Stern's hunch was that the stock market could help managers work out how
their strategies were performing. Simply, if management was effective, demand for the firm's
stock would be high. A low price would imply bad management.
What sounds obvious now was revolutionary at the time. Until then profits were the key
barometer of success. But profits were a crude measure and easy to manipulate. Financial
markets, Stern felt, could provide a more precise measure of the value of management because
they were based on more 'objective' processes, beyond the firm's direct control. The value of
shares, he believed, represented the market's exact validation of management. Because of this,
financial markets could help managers determine what was working and what was not.
In doing this, Stern laid the foundation for a 'shareholder value' management that put
financial markets at the core of managerial strategy.
Stern would probably never have imagined that these ideas would 50 years later be castigated
as a fundamental threat to the future of liberal capitalism. In recent times everyone from the
Business Roundtable group
of global corporations, to the Financial Times , to the
British Labour Party has lined up
to condemn the shareholder ideology.
"Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism
and created an environment of popular distrust of big business."
It is not the first time Stern's creation has come under fire. A decade ago Jack Welsh,
former CEO of General Electric declared shareholder value " probably the dumbest idea in
the world ". And 15 years before then, British political commentator Will Hutton, among
others, found paperback fame with his book The State We're In preaching much the same
message.
To critics, the rise of shareholder value is a straightforward story , that
has been told
over and over again.
Following a general crisis of postwar profitability in the late 1970s, corporate managers came
under fire from disappointed shareholders complaining about declining returns. Shareholder
revolts forced managers to put market capitalisation first. The rise of stock options to
compensate corporate managers entrenched shareholder value by aligning the interests of
managers and shareholders. Companies began sacrificing productive investments, environmental
protections, and worker security to ensure shareholder returns were maximised. The fear of
stock market verdicts on quarterly reports left them no choice.
This account fits a widespread belief that financiers and
rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a
simple solution: liberate companies from the demands of shareholders. Freed from the short-term
pursuit of delivering shareholder returns, companies could then return to long-term plans,
productive investments, and higher wages.
In two
recent articles , we have
argued that this critique of shareholder value has always been based on a misunderstanding.
Stern and the shareholder value consultants did not aim to put shareholders first. They worked
to empower management. Seen in this light, the history of the shareholder value ideology
appears differently. And it calls for alternative political responses.
To better understand Stern's ideas, it is important to grasp the broader context in which he
was writing. In the 1960s, a group of firms called the conglomerates were pioneering many of
the practices that later became associated with the shareholder revolution: aggressive mergers,
divestitures, Leverage buy-outs (LBOs), and stock repurchasing.
These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy
by developing new techniques to systematically raise money from financial markets. They wheeled
and dealed their divisions and used them to tap financial markets to finance further predatory
acquisitions. Instead of relying on profits from productive operations, they chased speculative
transactions on financial markets to grow.
These same tactics were later borrowed by the 1980s corporate raiders, many of which were in
fact old conglomerators from the 1960s. The growing efficiency with which these raiders
captured undervalued firms on the stock market and ruthlessly sold off their assets to finance
further acquisitions put corporate America on alert.
With fortunes to be made and lost, no manager could ignore the stock market. They became
increasingly concerned with their position on financial markets. It was in this context that
corporate capitalism first spoke of the desire to 'maximise shareholder value'. While sections
of the corporate establishment were put on the defensive, the main reason for this was not that
shareholders imposed their preferences on management. Instead, it was competitor managers using
the shareholder discourse as a resource to expand and gain control over other firms. Capital
markets became the foundation of a new form of financialised managerial power.
These changes made the approach of management consultants championing shareholder value
attractive. The firm founded by Stern and his business partner Bennett Stewart III took
advantage of the situation. They sold widely their ideas about financial markets as a guideline
for corporate strategy to firms looking to thrive in this new environment.
As the discourse and tools of shareholder value took hold, they served three distinct
purposes. First, they provided accounting templates for managerial strategies and a means to
manage a firm's standings on financial markets. The first and most famous metric for assessing
just how much value was being created for shareholders was one Stern himself helped develop,
Economic Value Added (EVA).
Second, they became a powerful justification for the idea that managers should be offered
share options. This was in fact an old idea floated in the 1950s by management consultants such
as Arch Patton of McKinsey as a means to top-up relatively stagnant managerial pay. Yet it was
relaunched in this new context as part of the promise to 'align the interests of managers with
shareholders.' Stock options helped managerial pay skyrocket in the 1990s, a curious fact for
those who believe that managers were 'disciplined' by shareholders.
Third, the notion of shareholder primacy helped to offload managerial responsibility. An
amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of
managerial malpractice. Managers lamented the fact they had no choice but to disregard workers
and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed
responsible for corporate problems. Yet in practice, managers, more often than not, enrolled
shareholders into their own projects, using the newly-formed alliance with shareholders to
pocket huge returns for themselves.
Though shareholder demands are now depicted as the problem to be solved, the same reformist
voices have in the past championed shareholders as the solution to corporate excesses. This was
the basis for the hope around the ' shareholder spring ' in
2012, or the recent championing of activist shareholders as ' labour's last
weapon' .
By challenging the conventional narrative, we have emphasised how it is instead the
financialisation of managerialism, or the way in which corporations have leveraged their operations on financial markets,
that has characterised the shareholder value shift. Politically this matters.
If shareholder demands are understood to be the major problem in corporate life, then the
solution is to grant executives more space. Yet the history of shareholder value tells us that
managers have been leading the way in corporate governance. They do not need shielding from
shareholders or anyone else and instead need to be made accountable for their decisions.
Critiques of shareholder primacy risk muddying the responsibility of managers who have long put
their own interests first. Perhaps the reason why executives are now so ready to abandon
shareholder primacy, is because it never really existed.
Imagine if all corporations were equally owned by the entire population? Then shareholder
primacy would just be representative democracy, no?
But, of course, corporations are not even close to being equally owned by the entire
population and part of the blame must lie with government privileges for private credit
creation whereby the need to share wealth and power with the entire population is bypassed
– in the name of "efficiency", one might suppose.
But what good is the "efficient" creation of wealth if it engenders unjust and therefore
dangerous inequality and levies noxious externalities?
"An amorphous and often anonymous 'shareholder pressure' became the explanation for all
manner of managerial malpractice."
Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's
Greenmail, would disagree. Nelson Putz, er, Peltz just forced P&G to start eating into
the foundation of the business to feed his greed. There's nothing amorphous or anonymous
about activist shareholders, especially when they take over a company and start carving it up
like a Thanksgiving turkey.
Creditors, or bond holders, appear to be the more powerful. Shareholders have no legal
recourse to protect their "ownership." Bondholders do have legal recourse.
Either way, many corporations more serve up their than serve their customers and the
general public. There is this belief that if a corporation is profitable, that's good but
does not include a public interest (for example Monsanto and Roundup.)
Managers used to fear the creditors more than shareholders, that's very much true.
But that has gone out of the window recently, as debt investors just chase return, so it's
seller's world, and few of them (debt investors) want to take losses as they are much harder
to recoup than before. So extend and pretend is well and alive.
In other words, one of the byproducts of QE is that the company management fears no-one,
and is more than happy to do whatever they want.
The problem is the agency. If we assume that we want publicly traded companies (which IMO
is not a given), the current incentives are skewed towards management paying themselves.
The problem with things like supervisory boards, even if they have high worker
representation, is that those are few individuals, and often can be (directly or indirectly)
corrupted by the management.
The "shares" incentive is just dumb, at least in the way it's currently structured. It
literally gives only upside, and often even realisable in short/medium term.
Corporations are artificial creations of the state. They exist in their current form under
a complex series of laws and regulations, but with certain privileges, such as Limited
Liability Corporations. It is assumed that these creatures will enhance economic activity if
they are given these privileges, but there is no natural law, such as gravity, that says
these laws and regulations need to exist in their current form. They can be changed at will
be legislatures.
This is why I despise the Citizens United decision which effectively gives these
artificial creations the same rights as people. i don't believe that Thomas Jefferson would
have found that to be "a self-evident truth." I think that Citizens United will be regarded
as something akin to the Dred Scott decision a century from now.
Shareholder primacy is an assumption that hasn't been challenged over the past couple of
decades, but can be controlled by society if it so desires.
The semantics of "shareholder primacy" are problematic. The word "shareholder" in this
formula echoes the kind problems that whirl around a label like "farmer". A shareholder is
often characterized in economics texts as an individual who invests money hoping to receive
back dividends and capital gains in the value and valuation of a company as it earns income
and grows over time. Among other changes -- changes to the US tax laws undermined these
quaint notions of investment, and shareholder. The coincident moves for adding stock options
to management's pay packet [threats of firing are supposed to encourage the efforts of other
employees -- why do managers needs some kind of special encouragement?], legalizing share
buybacks, and other 'financial innovations' -- worked in tandem to make investment synonymous
with speculation and shareholders synonymous with speculators, Corporate raiders, and the
self-serving Corporate looters replacing Corporate management.
This post follows a twisting road to argue previous "critique of shareholder value has
always been based on a misunderstanding" and arrives at a new critique of shareholder value
"challenging the conventional narrative." This post begins by sketching Stern's foundation
for 'shareholder value' with the assertion imputed to him: "if management was effective,
demand for the firm's stock would be high. A low price would imply bad management." The post
then claims "What sounds obvious now was revolutionary at the time." But that assertion does
not sound at all obvious to me. In terms of the usual framing of the all-knowing Market the
assertion sounds like a tautology, built on a shaky ground of Neolilberal economic religious
beliefs.
I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the
mechanisms our Elites constructed so they could loot Corporate wealth. There is no
misunderstanding involved.
"But that assertion does not sound at all obvious to me."
I think you're severely understating this. I'd call it total [family blogging family blog].
As you go on to imply, it takes an act of pure faith, akin to religious faith in Dawkins'
sense of belief in the face of evidence to the contrary, to assume or assert this nonsense,
except insofar as it's tautological – if the purpose of management is to have a high
share price, then obviously the latter reflects the effectiveness of the former.
Well, we're all stakeholders now. There probably isn't much value to merely being a
shareholder at this point. First let's ask for a viable definition of "value" because it's
pretty hard to financialize an undefined "value" and nobody can financialize an empty
isolated thing like the word "management". Things go haywire. What we can do with this seed
of an idea is finance the preservation and protection of some defined value. And we can, in
fact, leverage a healthy planet until hell freezes over. No problem.
This fits within a Marxist analysis as the material conditions spurred the ideological
justifications of the conditions, not the ideology spurring the conditions.
Easy to bust this open by legislating against limited liability. Corporates were not
always limited liability, but it was promoted as a means to encourage formation of risky
businesses that would otherwise never develop due to risk averse owners or managers. This was
promoted as a social compact, delivering employment and growth that would otherwise be
unattainable. Like everything in life, human greed overcomes social benefits.
Governments world wide would and should step up and regulate to regain control, rather
than fiddling at the margins with corporate governance regulation. They won't, because
powerful vested interests will put in place those politicians who will do their bidding.
Another nail in the democracy coffin. The only solution will be a cataclysmic event that
unites humanity.
I think about stock markets as separate from companies and I'm wrong. Each of the stock
exchanges I have heard of started off when 4-5 local companies invested a few thousand each
in renting a building and a manager to run an exchange hoping it would attract investment,
promote their shares and pay for itself.
I remember when one of the major components of the Hong Kong Exchange, Hutchison, had a
bad year and really needed some black magic to satisfy the shareholders, the Deputy Chairman
abandoned his daytime job and spent trading hours buying and selling for a fortnight to
contribute something respectable for the annual accounts. Somebody paid and never knew it.
This was at the start of creative accounting and the 'anything goes' version of capitalism
that the article connects with Litton Industries, Teledyne and LTV but was infecting the
entire inner circle of the money.
"... Robert Pfaller: Until the late 1970s, all "Western" (capitalist) governments, right or left, pursued a Keynesian economic policy of state investment and deficit spending. (Even Richard Nixon is said to have once, in the early 1970ies, stated, "We are all Keynesians"). This lead to a considerable decrease of inequality in Western societies in the first three decades after WWII, as the numbers presented by Thomas Piketty and Branko Milanovic in their books prove. Apparently, it was seen as necessary to appease Western workers with high wages and high employment rates in order to prevent them from becoming communists. ..."
"... Whenever the social-democratic left came into power, for example with Tony Blair, or Gerhard Schroeder, they proved to be the even more radical neoliberal reformers. As a consequence, leftist parties did not have an economic alternative to what their conservative and liberal opponents offered. Thus they had to find another point of distinction. This is how the left became "cultural" (while, of course, ceasing to be a "left"): from now on the marks of distinction were produced by all kinds of concerns for minorities or subaltern groups. And instead of promoting economic equality and equal rights for all groups, the left now focused on symbolic "recognition" and "visibility" for these groups. ..."
"... Thus not only all economic and social concerns were sacrificed for the sake of sexual and ethnic minorities, but even the sake of these minorities itself. Since a good part of the problem of these groups was precisely economic, social and juridical, and not cultural or symbolic. And whenever you really solve a problem of a minority group, the visibility of this group decreases. But by insisting on the visibility of these groups, the policies of the new pseudo-left succeded at making the problems of these groups permanent – and, of course, at pissing off many other people who started to guess that the concern for minorities was actually just a pretext for pursuing a most brutal policy of increasing economic inequality. ..."
"... The connection to neoliberalism is the latter's totalitarian contention of reducing the entirety of human condition into a gender-neutral cosmopolitan self expressing nondescript market preferences in a conceptual vacuum, a contention celebrated by its ideologues as "liberation" and "humanism" despite its inherent repression and inhumanity. ..."
"... "..'identity politics,' which pretty much encapsulate the central concerns of what these days is deemed to represent what little of the 'left' survives, plays into the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics' that has been emptied of all that is substantively political.." ..."
"... Agreed. And the truth is that the message is much clearer than that of the critics, below. So it ought to be for the world, sliding into fascism, in which we live in might have been baked by the neo-liberals but it was iced by 57 varieties of Blairites . The cowards who flinched led by the traitors who sneered. ..."
"... 'identity politics,' which pretty much encapsulate the central concerns of what these days is deemed to represent what little of the 'left' survives, plays into the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics' that has been emptied of all that is substantively political, namely, the fight for an equitable production and distribution of goods, both material and cultural, ensuring a decent life for all. ..."
"... Why bother getting your hands dirty with an actual worker's struggle when you can write yet another glamorously "radical" critique of the latest Hollywood blockbuster (which in truth just ends up as another advert for it)? ..."
"... The One Per Cent saw an opportunity of unlimited exploitation and they ran with it. They're still running (albeit in jets and yachts) and us Proles are either struggling or crawling. Greed is neither Left or Right. It exists for its own self gratification. ..."
"... Actually, post-modernism doesn't include everybody -- just the 'marginalized' and 'disenfranchised' minorities whom Michel Foucault championed. The whole thing resembles nothing so much as the old capitalist strategy of playing off the Lumpenproletariat against the proletariat, to borrow the original Marxist terminology. ..."
"... if you don't mind me asking, exactly at what point do you feel capitalism was restored in the USSR? It was, I take it, with the first Five Year Plan, not the NEP? ..."
"... Also, the Socialist or, to use your nomenclature, "Stalinist" system, that was destroyed in the the USSR in the 1990s–it was, in truth, just one form of capitalism replaced by another form of capitalism? ..."
Robert Pfaller interviewed by Kamran Baradaran, via
ILNA
The ruling ideology since the fall of the Berlin Wall, or even earlier, is postmodernism. This is the ideological embellishment
that the brutal neoliberal attack on Western societies' welfare (that was launched in the late 1970s) required in order to attain
a "human", "liberal" and "progressive" face.
Robert Pfaller is one of the most distinguished figures in today's radical Left. He teaches at the University of Art and Industrial
Design in Linz, Austria. He is a founding member of the Viennese psychoanalytic research group 'stuzzicadenti'.
Pfaller is the author of books such as On the Pleasure Principle in Culture: Illusions Without Owners , Interpassivity:
The Aesthetics of Delegated Enjoyment , among others. Below is the ILNA's interview with this authoritative philosopher on
the Fall of Berlin Wall and "Idea of Communism".
ILNA: What is the role of "pleasure principle" in a world after the Berlin Wall? What role does the lack of ideological
dichotomy, which unveils itself as absent of a powerful left state, play in dismantling democracy?
Robert Pfaller: Until the late 1970s, all "Western" (capitalist) governments, right or left, pursued a Keynesian economic
policy of state investment and deficit spending. (Even Richard Nixon is said to have once, in the early 1970ies, stated, "We are
all Keynesians"). This lead to a considerable decrease of inequality in Western societies in the first three decades after WWII,
as the numbers presented by Thomas Piketty and Branko Milanovic in their books prove. Apparently, it was seen as necessary to
appease Western workers with high wages and high employment rates in order to prevent them from becoming communists.
Ironically one could say that it was precisely Western workers who profited considerably of "real existing socialism" in the
Eastern European countries.
At the very moment when the "threat" of real existing socialism was not felt anymore, due to the Western economic and military
superiority in the 1980ies (that led to the fall of the Berlin Wall), the economic paradigm in the Western countries shifted.
All of a sudden, all governments, left or right, pursued a neoliberal economic policy (of privatization, austerity politics, the
subjection of education and health sectors under the rule of profitability, liberalization of regulations for the migration of
capital and cheap labour, limitation of democratic sovereignty, etc.).
Whenever the social-democratic left came into power, for example with Tony Blair, or Gerhard Schroeder, they proved to
be the even more radical neoliberal reformers. As a consequence, leftist parties did not have an economic alternative to what
their conservative and liberal opponents offered. Thus they had to find another point of distinction. This is how the left became
"cultural" (while, of course, ceasing to be a "left"): from now on the marks of distinction were produced by all kinds of concerns
for minorities or subaltern groups. And instead of promoting economic equality and equal rights for all groups, the left now focused
on symbolic "recognition" and "visibility" for these groups.
Thus not only all economic and social concerns were sacrificed for the sake of sexual and ethnic minorities, but even the
sake of these minorities itself. Since a good part of the problem of these groups was precisely economic, social and juridical,
and not cultural or symbolic. And whenever you really solve a problem of a minority group, the visibility of this group decreases.
But by insisting on the visibility of these groups, the policies of the new pseudo-left succeded at making the problems of these
groups permanent – and, of course, at pissing off many other people who started to guess that the concern for minorities was actually
just a pretext for pursuing a most brutal policy of increasing economic inequality.
ILNA: The world after the Berlin Wall is mainly considered as post-ideological. Does ideology has truly decamped from our
world or it has only taken more perverse forms? On the other hand, many liberals believe that our world today is based on the
promise of happiness. In this sense, how does capitalism promotes itself on the basis of this ideology?
Robert Pfaller: The ruling ideology since the fall of the Berlin Wall, or even earlier, is postmodernism. This is the ideological
embellishment that the brutal neoliberal attack on Western societies' welfare (that was launched in the late 1970s) required in
order to attain a "human", "liberal" and "progressive" face. This coalition between an economic policy that serves the interest
of a tiny minority, and an ideology that appears to "include" everybody is what Nancy Fraser has aptly called "progressive neoliberalism".
It consists of neoliberalism, plus postmodernism as its ideological superstructure.
The ideology of postmodernism today has some of its most prominent symptoms in the omnipresent concern about "discrimination"
(for example, of "people of color") and in the resentment against "old, white men". This is particularly funny in countries like
Germany: since, of course, there has been massive racism and slavery in Germany in the 20th century – yet the victims of this
racism and slavery in Germany have in the first place been white men (Jews, communists, Gypsies, red army prisoners of war, etc.).
Here it is most obvious that a certain German pseudo-leftism does not care for the real problems of this society, but prefers
to import some of the problems that US-society has to deal with. As Louis Althusser has remarked, ideology always consists in
trading in your real problems for the imaginary problems that you would prefer to have.
The general ideological task of postmodernism is to present all existing injustice as an effect of discrimination. This is,
of course, funny again: Since every discrimination presupposes an already established class structure of inequality. If you do
not have unequal places, you cannot distribute individuals in a discriminating way, even if you want to do so. Thus progressive
neoliberalism massively increases social inequality, while distributing all minority groups in an "equal" way over the unequal
places.
MASTER OF UNIVE
Abbreviate & reduce to lowest common denominator which is hyperinflation by today's standards given that we are indeed all
Keynesians now that leveraged debt no longer suffices to prop Wall Street up.
Welcome to the New World Disorder. Screw 'postmodernism' & Chicago School 'neoliberalism'!
MOU
Danubium
There is no such thing as "post-modernism".
The derided fad is an organic evolution of the ideologies of "modernity" and the "Enlightenment", and represents the logical
conclusion of their core premise: the "enlightened self" as the source of truth instead of the pre-modern epistemologies of
divine revelation, tradition and reason.
It does not represent any "liberation" from restrictive thought, as the "self" can only ever be "enlightened" by cult-like
submission to dogma or groupthink that gives tangible meaning to the intangible buzzword, its apparent relativism is a product
of social detachment of the intellectual class and its complete and utter apathy towards the human condition.
The connection to neoliberalism is the latter's totalitarian contention of reducing the entirety of human condition into
a gender-neutral cosmopolitan self expressing nondescript market preferences in a conceptual vacuum, a contention celebrated
by its ideologues as "liberation" and "humanism" despite its inherent repression and inhumanity.
The trend is not to successor or opponent, but rather modernism itself in its degenerative, terminal stage.
Monobazeus
Well said
bevin
"..'identity politics,' which pretty much encapsulate the central concerns of what these days is deemed to represent what little
of the 'left' survives, plays into the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics'
that has been emptied of all that is substantively political.."
Agreed. And the truth is that the message is much clearer than that of the critics, below.
So it ought to be for the world, sliding into fascism, in which we live in might have been baked by the neo-liberals but it
was iced by 57 varieties of Blairites . The cowards who flinched led by the traitors who sneered.
So cutting through all of the verbiage, the upshot of Pfaller's contentions seems to be that 'identity politics,' which pretty
much encapsulate the central concerns of what these days is deemed to represent what little of the 'left' survives, plays into
the hands of the neoliberal ruling establishment(s), because at bottom it is a 'politics' that has been emptied of all that
is substantively political, namely, the fight for an equitable production and distribution of goods, both material and cultural,
ensuring a decent life for all.
Difficult not to agree.
For indeed, "If you do not have unequal places, you cannot distribute individuals in a discriminating way, even if you want
to do so."
Capricornia Man
You've nailed it, Norman. In many countries, the left's obsession with identity politics has driven class politics to the periphery
of its concerns, which is exactly where the neoliberals want it to be. It's why the working class just isn't interested.
Martin Usher
It must be fun to sit on top of the heap watching the great unwashed squabbling over the crumbs.
Red Allover
The world needs another put down of postmodern philosophy like it needs a Bob Dylan album of Sinatra covers . . .
maxine chiu
I'm glad the article was short .I don't think I'm stupid but too much pseudo-intellectualism makes me fall asleep.
Tim Jenkins
Lol, especially when there are some galling glaring errors within " too much pseudo-intellectualism "
Thanks for the laugh, maxine,
Let them stew & chew (chiu) on our comments 🙂
Bootlyboob
As with any use of an -ism though, you need sort the wheat from the chaff when it comes to using 'postmodernism'. Do you mean
Baudrillard and Delueze? or do you mean some dirty cunt like Bernard Henri-Levy. There is a bit of a difference.
Bootlyboob
Ok, so Levi is not really a postmodernist. But still, there are philosphers of postmodernism that were, and still are, worth
reading.
BigB
Postmodernism: what is it? I defy anyone to give a coherent and specific definition. Not least, because the one 'Classical
Liberal' philosopher who did – Stephen Hicks – used the term as a blanket commodification of all post-Enlightenment thought
starting with Rousseau's Romanticism. So PoMo has pre-Modern roots? When the left start playing broad and wide with political
philosophical categories too – grafting PoMo onto post-Classical roots as a seeming post-Berlin Wall emergence what actually
is being said? With such a depth and breadth of human inquiry being commodified as 'PoMo' – arguably, nothing useful.
Neoliberalism is Classic Liberalism writ large. The basic unit of Classicism is an individuated, independent, intentional,
individual identitarianism as an atom of the rational ('moral') market and its self-maximising agency. Only, the 'Rights of
Man' and the 'Social Contract' have been transfered from the Person (collectively: "We the People " as a the democratic sovereign
power) to the Corporation as the new 'Neo-Classicist' supranational sovereign. Fundamentally, nothing has changed.
As pointed out below: this was already well underway by November 1991 – as a structural-function of the burgeoning Euromarkets.
These were themselves on the rise as the largest source of global capital *before* the Nixon Shock in 1971. There is an argument
to be made that they actually caused the abandoning of Breton Woods and the Gold Standard. Nonetheless, 1991 is a somewhat
arbitrary date for the transition from 'High Modernity' to 'PostModernity'. Philosophers. political, and social scientists
– as Wittgenstein pointed out – perhaps are victims of their own commodification and naming crisis? Don't get me started on
'post-Humanism' but what does PoMo actually mean?
As the article hints at: the grafting of some subjectivist single rights issues to the ultra-objectivist core market rationality
of neoliberalism is an intentional character masking. Even the 'neoliberal CNS' (central nervous system) of the WEF admits
to four distinct phases of globalisation. The current 'Globalisation 4.0' – concurrent with the 'Fourth Industrial Revolution'
– is a further development of this quasi-subjectivist propagandic ploy. Globalisation is now humanist, sovereigntist, environmentalist,
and technologist (technocratic). Its ultimate *telos* is 'fully automated luxury communism' or the harmoniousness of man and
nature under an ecolological *Tianxia* the sustainable 'Ecological Civilisation'. Which, I would hope, absolutely nobody is
gullible enough to believe?
Who says the leopard cannot change its spots? It can, and indeed does. Neoliberalism is a big-data micromarketing driven
technocratic engine of reproduction tailored to the identitarian individual. PoMo – in one sense – is thus the logical extremisation
of Classical Liberalism which is happening within the Classical Liberal tradition. It is certainly not a successor state or
'Fourth Political Theory' which is one of the few things Aleksandr Dugin gets right.
This is why the term needs defintion and precisification or, preferably, abandoning. If both the left and right bandy the
term around as a eupehemism for what either does not like – the term can only be a noun of incoherence. Much like 'antisemitism':
it becomes a negative projection of all undesirable effects onto the 'Other'. Which, when either end of the political spectrum
nihilates the Other leaves us with the vicious dehumanisation of the 'traditional' identitarian fascist centre. All binary
arguments using shared synthetic terminology – that are plastic in meaning depending on who is using the term – cancel each
other out.
Of which, much of which is objectified and commodified as 'PoMo' was a reaction against. A reaction that anticipated the
breakdown of the identitarian and sectarian 'technological postmodern' society. So how can that logically be a 'reaction against'
and an 'embelishment to' neoliberalism'?
This is not a mere instance of pedantry: I/we are witnessing the decoherence of language due to an extremisation of generalisation
and abstraction of sense and meaning. That meaning is deferred is a post-structuralist tenet: but one that proceeds from the
extreme objectivisation of language (one to one mapping of meaning as the analytical signified/signifier relationship) and
the mathematicisation of logic (post-Fregian 'meta-ontology') not its subjectivisation.
If PoMo means anything: it is a rich and authentic vein of human inquiry that was/is a creative attempt to rescue us from
a pure objectivist Hell (David Ray Griffin's "positive postmodernism"). One that was/is not entirely satisfactory; merely because
it has not yet completed. In the midst: we have the morbid hybrid symptomatology of the old Classical Libertarian fascism trying
to recuperate the new Universal Humanism for which PoMo is a meaningless label. Especially if it is used to character masque
the perennial philosophy of Humanism that has been dehumanised and subjugated by successive identitarian regimes of knowledge
and power since forever in pre-Antiquity.
We are all human: only some humans are ideologically more human than others is the counter-history of humanity. When we
encounter such ideologically imprecise degenerative labels as 'PoMo' – that can mean anything to anyone (but favours the status
quo) this makes a nonsense of at least 5,000 years of thought. Is it any wonder that we are super-ordinated by those who can
better dictate who we are? Language is overpower and writing is supra-sovereign administration and bureaucracy over the 'owness'
of identity. Its co-option by the pseudoleft is a complete denigration and betrayal of the potential of a new Humanism. The
key to which is the spiritual recovery and embodiment of who we really are – proto-linguistically and pre-ontologically – before
all these meaningless labels get in the way.
Bootlyboob
You said it better than I ever could.
Stephen Hick's book is quite the laugh. I tried to read it but it made no sense. From memory, it starts at Kant and Hegel
and gets them completely wrong, (he even draws little charts with their ideas in tabulated form, WTF?) so I quickly deleted
the .pdf. Any book that begins with a summary of these two philosophers and then thinks they can hold my attention until they
get to their take on 'postmodernism' is sorely mistaken. Postmodernism is a made up label for about four or five French intellectuals
in the 1970's that somehow took over the world and completely fucked it up. Why do I somehow not follow this line of 'thought'?
Reg
No, Postmodernism is a real thing, it is the capitalist assimilation of situationism to overcome the crisis of profit in the
70s caused by overproduction and the attempt by the 1% to recapture a greater a greater % of GDP that they had lost due to
the post war settlement. This was an increasingly a zero sum game economy after Germany and Japan had rebuilt their manufacturing
capacity, with the US constrained by a widening trade deficit and the cost of the cold and Vietnam war increasing US debt.
The inflation spikes in the 70s is only reflective of these competing demands.
The problem of modernism is than peoples needs are easily saited, particularly in conditions of overproduction. Postmodern
production is all about creating virtual needs that are unsatisfied. The desire for status or belonging or identity are infinite,
and overcomes the dead time of 'valourisation' (time taken for investment to turn into profit) of capital by switching to virtual
production of weightless capitalism. The creation of 'intangible asset's such as trade marks, while off shoring production
is central. This is a form of rentier extraction, as the creation of a trade mark creates no real value if you have offshored
not only production but R&D to China. This is why fiance, and free movement of capital supported by monetary policy and independent
central banks are central to Postmodern neo-liberal production. The problem being that intangible assets are easy to replace
and require monopoly protection supported by a Imperial hegemon to maintain rentier extraction. Why does China need a US or
UK trade mark of products where both innovation and production increasingly come from China? How long can the US as a diminishing
empire maintain rentier extraction at the point of a military it increasingly cannot afford, particularly against a military
and economic superpower like China? It is no accident US companies that have managed to monetise internet technologies are
monopolies, google, microsoft, Apple. An operating system for example has a reproduction cost of zero, the same can be said
of films or music, so the natural price is zero, only a monopoly maintains profit.
The connection to situationism is the cry of May 68 'Make your dreams reality', which was marketised by making peoples dreams
very interesting ones about fitted kitchens, where even 'self actualisation was developed into a product, where even ones own
body identity became a product to be developed at a price. This is at the extreme end of Marxist alienation as not only work
or the home becomes alienated, but the body itself.
David Harvey covers some of this quite well in his "The condition of Postmodernity". Adam Curtis also covers quite well in
'The Trap' and the 'Century of the self'.
BigB
I'm inclined to agree with everything you write. It would fall into what I called 'precisification' and actual definition.
What you describe is pure Baudrillard: that capitalism reproduces as a holistic system of objects that we buy into without
ever satisfying the artificial advertorial need to buy. What we actually seek is a holism of self that cannot be replaced by
a holism of objects hence an encoded need for dissatisfaction articulated as dissatisfaction a Hyperrealism of the eternally
desiring capitalist subject. But Baudrillard rejected the label too.
What I was pointing out was the idea of 'contested concept'. Sure, if we define terms, let's use it. Without that pre-agreed
defintion: the term is meaningless. As are many of our grandiloquent ideas of 'Democracy', 'Freedom', 'Prosperity', and especially
'Peace'. Language is partisan and polarised. Plastic words like 'change' can mean anything and intentionally do. And the convention
of naming creates its own decoherence sequence. What follows 'postmodernism'? Post-humanism is an assault on sense and meaning.
As is the current idea that "reality is the greatest illusion of all".
We are having a real communication breakdown due to the limitations of the language and out proliferation of beliefs. Baudrillard
also anticipated the involution and implosion of the Code. He was speaking from a de Saussurian (semiologic) perspective. Cognitive
Linguistics makes this ever more clear. Language is maninly frames and metaphors. Over expand them over too many cognitive
domains: and the sense and meaning capability is diluted toward meaninglessnes – where reality is no longer real. This puts
us in the inferiorised position of having our terms – and thus our meaning – dictated by a cognitive elite a linguistic 'noocracy'
(which is homologous with the plutocracy – who can afford private education).
Capitalism itself is a purely linguistic phenomena: which is so far off the beaten track I'm not even going to expand on
it. Except to say: that a pre-existing system of objects giving rise to a separate system of thoughts – separate objectivity
and subjectivity – is becoming less tenable to defend. I'd prefer to think in terms of 'embodiment' and 'disembodiment' rather
than distinct historical phases. And open and closed cognitive cycles rather than discreet psycholgical phases. We cannot be
post-humans if we never embodied our humanism fully. And we cannot be be post-modern when we have never fully lived in the
present having invented a disembodied reality without us in it, which we proliferated trans-historically the so-called 'remembered
present'.
Language and our ideas of reality are close-correlates – I would argue very close correlates. They are breaking down because
language and realism are disembodied which, in itself is ludicrous to say. But we have inherited and formalised an idealism
that is exactly that. Meaning resides in an immaterial intellect in an intangible mind floating around in an abstract neo-Platonic
heaven waiting for Reason to concur with it. Which is metaphysical bullshit, but it is also the foundation of culture and 'Realism'.
Which makes my position 'anti-Realist'. Can you see my problem with socio-philosophical labels now!? They can carry sense if
used carefully, as you did. In general discourse they mean whatever they want to mean. Which generally means they will be used
against you.
Ramdan
"the SPIRITUAL RECOVERY and embodiment of who we really are – PROTO-LINGUISTICALLY and PRE-ONTOLOGICALLY – BEFORE all these
MEANINGLESS LABELS get in the way."
Thanks BigB. I just took the liberty to add emphasis.
Robbobbobin
Smarty pants (label).
Robert Laine
A reply to the article worthy of another Off-G article (or perhaps a book) which would include at a minimum the importance
of non-dualistic thinking, misuse of language in the creation of MSM and government narratives and the need to be conscious
of living life from time to time while we talk about it. Thankyou, BigB.
Don't you love how all these people discuss postmodernism without ever bothering to define what it is. How confused. Hicks
and Peterson see postmodernists as Neo-Marxists and this guy sees them as Neoliberals. None of the main theorists that have
been associated with Postmodernism and Post-Structuralism and I'm thinking Derrida, Baudrillard and Foucault here (not that
I see Foucault as really belonging in the group) would not even accept the term 'postmodernism' as they would see it as an
inappropriate form of stereo-typography with no coherent meaning or definition and that presupposing that one can simply trade
such signifiers in 'transparent' communication and for us all to think and understand the same thing that 'postmodernism' as
a body of texts and ideas might be 'constituted by' is a large part of the problem under discussion. I often think that a large
question that arises from Derrida's project is not to study communication as such but to study and understand miss-communication
and how and why it comes about and what is involved in our misunderstandings. If people don't get that about 'postmodern' and
post-structuralist theories then they've not understood any thing about it.
BigB
You are absolutely right: the way we think in commodities of identities – as huge generalizations and blanket abstractions
– tends toward grand narration and meaninglessness. Which is at once dehumanising, ethnocentric, exceptionalist, imperialist
in a way that favours dominion and overpower. All these tendencies are encoded in the hierarchical structures of the language
– as "vicious" binary constructivisms. In short, socio-linguistic culture is a regime of overpower and subjugation. One that
is "philosopho-political" and hyper-normalises our discrimination.
Deleuze went further when he said language is "univocal". We only have one equiprimordial concept of identity – Being. It
is our ontological primitive singularity of sense and meaning. Everything we identity – as "Difference" – is in terms of Being
(non-Being is it's binary mirror state) as an object with attributes (substances). Being is differentiated into hierarchies
(the more attributes, the more "substantial"- the 'greater' the being) which are made "real" by "Repetition" hence Difference
and Repetition. The language of Dominion, polarization, and overpower is a reified "grand ontological narrative" constructivism.
One dominated by absolutised conceptual Being. That's all.
[One in which we are naturally inferiorised in our unconscious relationship of being qua Being in which we are dominated
by a conceptual "Oedipal Father" – the singularity of the Known – but that's another primal 'onto-theocratic' narrative the
grandest of then all].
One that we are born and acculturated into. Which the majority accept and never question. How many people question not just
their processes of thought but the structure of their processes of thought? A thought cannot escape its own structure and that
structure is inherently dominative. If not in it's immediacy then deferred somewhere else via a coduit of systemic violence
structured as a "violent hierarchy" of opposition and Othering.
Which is the ultimate mis-communication of anything that can be said to be "real" non-dominative, egalitarian, empathic,
etc. Which, of course, if we realise the full implications we can change the way we think and the "naturalised" power structures
we collectively validate.
When people let their opinions be formed for them, and commodify Romanticism, German Idealism, Marxism, Phenomenology, Structuralism,
Post-Structuralism, Existentialism, etc as the pseudo-word "PoMo" – only to dismiss it they are unbeknowingly validating the
hegemony of power and false-knowledge over. Then paradoxically using those binary power structures to rail about being dominated!
Those linguistic power structures dominate politics too. The "political unconscious" is binary and oppositional which tends
toward negation and favours the status quo but how many people think in terms of the psychopolitical and psycholinguistic algorithms
of power and politics?
Derrida's project is now our project and it has hardly yet begun. Not least because cognitive linguistics were unkown to
Derrida. That's how knowledge works by contemporising and updating previous knowledge from Structuralism to Post-Structuralism
to
Nihilating anything that can be called "PoMo" (including that other pseudo-label "Cultural Marxism") condemns us to another
200 years of Classical Liberalism which should be enough impetus to compel everyone to embrace the positive aspects of PoMo!
Especially post-post-structuralism that stupid naming convention again
I think a lot of people forget that both Derrida and Baudrillard died before the financial crisis. I don't think either of
them like myself at that time paid much attention to economics and markets as they worked within very specific and focused
fields. Derrida spent his whole life analysing phonocentrism and logocentrism throughout the history of philosophy and Baudrillard
was more a cultural sociologist then anything else. They like most people assumed that neoliberalism was working and they enjoyed
well paid jobs and great celebrity so they didn't have much cause to pay that much attention to politics. Following the Invasion
of Iraq Derrida did come out very strongly against the US calling it the biggest and most dangerous rogue state in the world
and he cited and quoted Chomsky's excellent work. We should also include the UK as the second biggest rogue state.
Once the GFC happened I realized that my knowledge on those subjects was virtually zero and I have since spent years looking
at them all very closely. I think Derrida and Baudrillard would have become very political following the GFC and even more
so now given current events with the yellow vests in France. Shame those two great thinkers died before all the corruption
of neoliberalism was finally revealed. I believe that would have had a great deal to say about it Derrida at least was a very
moral and ethical man.
Bootlyboob
I think you would like this essay if you have not read it already.
If anyone wants a good overview of postmodernism and post-structuralism Cuck philosophy has has some excellent videos covering
the subject matter and ideas. He explains how postmodernism has nothing to do with identity politics and shows how Hick and
Peterson have fundamentally misunderstood postmodernism. He also has 3 videos covering postmodern basics and some others on
Derrida and Baudrillard. You will not find the concepts explained better though one can never give a comprehensive review as
such things are essentially beyond us.
He puts too much weight on Foucault for my liking but that's just the fact that my understanding of postmodernism is obviously
different to his because all of our largely chance encounters with different texts at different times, which mean that we all
come away with slightly different ideas about what these things might mean at any given time. Even in relation to differences
in our own ideas from day to day or year to year.
Bootlyboob
Yes, that's why I mentioned the article in relation to your earlier comment. I don't think any of these philosophers would
have changed their stances based on the events 20 or 30 post their deaths. They essentially predicted the course that society
has taken.
Judith Butler took part in the occupy wall street movement and she's a post-structuralist so she has clearly changed her mind
since the GFC. Deleuze may have to a certain extent have predicted such things but that doesn't necessarily mean they would
have been happy about them. Derrida always spoke of the 'democracy' to come. Instead what we are looking forward to is tech
based technocratic totalitarianism. I don't go along with Deleuze on that matter anyway. I don't see a discreet transition
from one to the other but rather see us having to endure the combined worst of both scenarios.
Bootlyboob
In relation to Peterson. I did write an email to him once and he wrote back to me saying he does indeed like the writings of
Deleuze and Baudrillard. But it was a one line response. I'm still assuming he merely uses a false reading of Derrida as a
prop to advance his own arguments.
Peterson doesn't understand that postmodernism is not the source of identity politics or cultural marxism. That source is Anglo
sociology. I was doing an MSc in sociology back in 1994/95 and they had been transitioning away from Marx and class conflict
to Nietzsche and power conflicts understood within a very simplistic definition of power as a simple binary opposition of forces
between and 'oppressor' and a 'resistor'.
They borrow a bit from Foucault but they cannot accept his postmodern conclusions as power is necessarily revealed as a
positive force that actually constructs us all: in which case one cannot really object to it on political grounds. Let's face
it, these cultural ex-Marxists (now actually an elitist Nietzschean ubermench) don't seem to object to power's miss-functioning
at all on any kind of institutional level but solely concentrate on supposed power relations at the personal level.
That's all if you buy into 'power'at all as such. Baudrillard wrote 'Forget Foucault' and that 'the more one sees power
everywhere the less one is able to speak thereof'. I try and stay clear of any theory that tries to account for everything
with a single concept or perspective as they end up over-determining and reductionist.
A major benefit (for the elites) of postmodernism is its epistemological relativism, which denies the fundamentally important
commitments to objectivity, to facts and evidence. This results in the absurd situation where all the matters is the narrative.
This obvious fact is partially obscured by the substitution of emotion for evidence and logic.
https://viewsandstories.blogspot.com/2018/06/emotion-substitutes-for-evidence-and.html
Seamus Padraig
Yup. Among other things, po-mo 'theory' enables Orwell's doublethink .
BigB
This is exactly the misunderstanding of a mythical "po-mo 'theory'" – if such a thing exists – that I am getting at. 'Po-mo
theory' is in fact a modernity/postmodernity hybrid theory. Pomo theory is yet to emerge.
For instance: Derrida talked of the 'alterity' of language and consciousness that was neither subjectivist nor objectivist.
He also spoke of 'inversion/subversion' – where one bipolar oppositional term becomes the new dominant ie 'black over white'
or 'female over male'. This, he made specifically clear, was just as violent a domination as the old normal. How is this enabling
'doublethink'.
If you actually study where Derrida, Baudrillard, Deleuze; etc where taking their 'semiotics' it was to the 'Middle Way'
of language – much the same destination as Buddhism. This is the clear and precise non-domination of either extreme of language.
Only, they never supplied the praxis; and their followers and denigrators where not as prescient.
There is so much more to come from de Saussurian/Piercian semiotics and Bergsonian/Whiteheadian process philosophy. We have
barely scratched the surface. One possibility is the fabled East/West synthesis of thought that quantum physics and neuroscience
hint at.
What yo do not realise is that our true identity is lost in the language. Specifically: the Law of Identity and the Law
of the Excluded Middle of our current Theory of Mind prevent the understanding of consciousness. To understand why you actually
have to read and understand the linguistic foundations of the very theory you have just dismissed.
Robbobbobin
"Specifically: the Law of Identity and the Law of the Excluded Middle of our current Theory of Mind prevent the understanding
of consciousness."
Yes, but. What do you mean by " our current Theory of Mind"?
Tim Jenkins
Was that a promo for Po-mo theory, BigB ? (chuckle)
BigB
In fact: if followed through – PoMo leads to the point of decoherence of all narrative constructivism. Which is the same point
the Buddhist Yogacara/Madhyamaka synthesis leads to. Which is the same point quantum physics and contemporary cognitive neuroscience
leads to. The fact of a pre-existent, mind-independent, objective ground for reality is no longer tenable. Objectivism is dead.
But so is subjectivism.
What is yet to appear is a coherent narrative that accommodates this. Precisely because language does not allow this. It
is either subjectivism or objectivism tertium non datur – a third is not given. It is precisely within the excluded middle
of language that the understanding of consciouness lies. The reason we have an ontological cosmogony without consciousness
lies precisely in the objectification and commodification of language. All propositions and narratives are ultimately false
especially this one.
Crucially, just because we cannot create a narrative construction or identity for 'reality' – does not mean we cannot experience
'reality'. Which is what a propositional device like a Zen koan refers to
All linguistic constructivism – whether objective or subjective – acts as a covering of reality. We take the ontological
narrative imaginary for the real 'abhuta-parikalpa'. Both object and subject are pratitya-samutpada – co-evolutionary contingent
dependendencies. The disjunction of all dualities via ersatz spatio-temporality creates Samsara. The ending of Samsara is the
ending and re-uniting of all falsely dichotomised binary definitions. About which: we can say precisely nothing.
Does this mean language is dead? No way. Language is there for the reclamation by understanding its superimpositional qualitiy
(upacara). A metaphoric understanding that George Lakoff has reached with Mark Johnston totally independently of Buddhism.
I call it 'poetic objectivism' of 'critical realism' which is the non-nihilational, non-solipsistic, middle way. Which precisely
nihilates both elitism and capitalism: which is why there is so much confusion around the language. There is more at stake
than mere linguistics. The future of humanity will be determined by our relationship with our languages.
vexarb
@BigB: "The fact of a pre-existent, mind-independent, objective ground for reality is no longer tenable. Objectivism is dead."
Do you mean that there is more to life than just "atoms and empty space"? Plato, Dante and Blake (to name the first 3 who
popped into my head) would have agreed with that: the ground of objective reality is mind -- the mind of God.
"The atoms of Democritus, and Newton's particles of Light,
Are sands upon the Red Sea shore, Where Israel's tents do shine so bright".
Tim Jenkins
Funnily enough, I was only writing just yesterday on OffG's 'India's Tryst with Destiny' article, just what poor standards
we have in the Education of our children today, in urgent need of massive revisions, which I've highlighted and how the guilt
lays squarely on the shoulders of Scientists & Academia in our Universities, from Physics to History & Law & the 'Physiology
of Psychology' these guys really just don't 'cut it' anymore resting on Laurels, living in Fear and corrupted by capitalism
>>> wholly !
Somebody should be shot, I say for Terrorist Acts !
Corruption is the Destruction of Culture &
"The Destruction of Culture is a Terrorist Act", now officially,
in international Law @UNESCO (thanks, Irina Bokova)
Would the author of this piece like to review & correct some obviously glaring errors ?
George
Good article. On this topic, I read an essay by the late Ellen Meiksins Wood where she noted that our splendid "new Left" are
all at once too pessimistic and too optimistic. Too pessimistic because they blandly assume that socialism is dead and so all
struggles in that direction are futile. Too optimistic because they assume that this (up till now) bearable capitalism around
them can simply continue with its shopping sprees, pop celebrity culture, soap operas, scandal sheets, ineffectual though comfortable
tut-tutting over corrupt and stupid politicians and – best of all – its endless opportunity for writing postmodernist deconstructions
of all those phenomena.
Why bother getting your hands dirty with an actual worker's struggle when you can write yet another
glamorously "radical" critique of the latest Hollywood blockbuster (which in truth just ends up as another advert for it)?
Fair Dinkum
During the 50's and 60's most folks living in Western cultures were happy with their lot: One house, one car, one spouse, one
job, three or four kids and enough money to live the 'good life'
Then along came Vance Packard's 'Hidden Persuaders' and hell broke loose.
The One Per Cent saw an opportunity of unlimited exploitation and they ran with it.
They're still running (albeit in jets and yachts) and us Proles are either struggling or crawling.
Greed is neither Left or Right.
It exists for its own self gratification.
Seamus Padraig
Excellent article and very true. Just one minor quibble:
This coalition between an economic policy that serves the interest of a tiny minority, and an ideology that appears to
"include" everybody is what Nancy Fraser has aptly called "progressive neoliberalism".
Actually, post-modernism doesn't include everybody -- just the 'marginalized' and 'disenfranchised' minorities whom
Michel Foucault championed. The whole thing resembles nothing so much as the old capitalist strategy of playing off the
Lumpenproletariat against the proletariat, to borrow the original Marxist terminology.
Stephen Morrell
The following facile claim doesn't bear scrutiny: "At the very moment when the "threat" of real existing socialism was not
felt anymore, due to the Western economic and military superiority in the 1980ies (that led to the fall of the Berlin Wall),
the economic paradigm in the Western countries shifted."
The economic paradigm shifted well before the 1980s and it had nothing to do with "Western economic and military superiority
in the 1980ies". The death knell of Keynesianism was sounded with the de-linking of the US dollar and the gold standard in
1971 and the first oil crisis of 1973. Subsequently, the 1970s were marked by a continuous and escalating campaign of capital
strikes which produced both high inflation and high unemployment ('stagflation') in the main imperial centres. These strikes
persisted until the bourgeoisie's servants were able to implement their desired 'free market' measures in the 1980s, the key
ones being smashing of trade union power and consequent devastation of working conditions and living standards, privatisation
of essential services, dissolution of social welfare and all the rest. All in the name of 'encouraging investment'.
The fear of 'existing socialism' (and of the military might of Eastern Europe and the USSR) persisted right up to the restoration
of capitalism in the USSR in 1991-92. The post-soviet triumphalism (to that moronic and ultimate post-modernist war cry, 'The
End of History') only opened the floodgates for the imposition of the neoliberal paradigm over the whole globe. The real essence
of the 'globalisation' ideology has been this imposition of imperial monopoly and hegemony on economically backward but resource-rich
countries that hitherto could gain some respite or succour from the USSR and Eastern Europe as an alternative to the tender
mercies of the World Bank and IMF whose terms correspondingly centred on the neoliberal paradigm.
The key class-war victories of the 1980s by the ruling class, especially in the main Anglophone imperial centres (exemplified
by the air traffic controllers strike in Reagan's US and the Great Coal Strike in Thatcher's England), were the necessary condition
to them getting their way domestically. However, the dissolution of the USSR not only allowed the imperialists to rampage internationally
(through the World Bank, IMF, WTO, etc) but gave great fillip to their initial class-war victories at home to impose with impunity
ever more grinding impoverishment and austerity on the working class and oppressed -- from the 1990s right up to fraught and
crisis-ridden present. The impunity was fuelled in many countries by that domestic accompaniment to the dissolution of the
USSR, the rapidly spiralling and terminal decline of the mass Stalinist Communist parties, the bourgeoisie's bogeyman.
Finally, productivity in the capitalist west was always higher than in post-capitalist countries. The latter universally
have been socialised economies built in economically backward countries and saddled with stultifying Stalinist bureaucracies,
including in the USSR and Eastern Europe. Capitalist productivity didn't suddenly exceed that in the USSR or Eastern Europe
in the 1980s.
So, overall, the 'triumph' of the neoliberal paradigm didn't really have much to do with the imperialist lie of "Western
economic and military superiority in the 1980ies". That fairytale might fit into some post-modernist relativist epistemology
of everything being equally 'true' or 'valid', but in the real world it doesn't hold up empirically or logically. In Anglophone
philosophic academia at least, post-modernism really picked up only after Althusser strangled his wife, and hyper-objectivist
structuralism correspondingly was strangled by hyper-subjectivist post-modernism.
Seamus Padraig
The death knell of Keynesianism was sounded with the de-linking of the US dollar and the gold standard in 1971 and the
first oil crisis of 1973.
Not really, no. In fact, we still do have Keynesianism; but now, it's just a Keynsianism for the banks, the corporations
and the MIC rather than the rest of us. But check the stats: the governments of West are still heavily involved in deficit
spending–US deficits, in fact, haven't been this big since WW2! Wish I got some of that money
Tim Jenkins
I find this kind of a pointless discussion on Keynes & so on
"Capitalism has Failed." Christine Lagarde 27/5/2014 Mansion House
"Socialism for the Rich" (Stiglitz: Nobel Economic laureate, 2008/9)
More important is the structuring of Central Banks to discuss and
Richard A. Werner's sound observations in the link
Riddle me this Seamus: this year we just got a new statue of Woodrow Wilson in Plovdiv BG.
Last year we got a statue of John no-name McCain in Sofia Bulgaria
See the patterns in the most poverty stricken EU nation ?
Not difficult !
vexarb
Seamus, me too! At least, wish I could get some of my own money back.
Tim Jenkins
Whenever I think about some serious R.O.I. of time & money & family contributions to Tech. Designs, lost in the '80's, I have
to play some music or switch to Zen mode 🙂
vexarb
@Tim: "R.O.I (Return On Investment)". The first time I have come across that P.O.V (Point Of View) on this site. The essence
of Darwin's theory of evolutionary progress: to slowly build on an initial slight advantage. The 80s (I was there), Maggie
Snatcher, Baroness Muck, no such thing as Society, the years that the Locust has eaten. Little ROI despite a tsunami of fiat
money swirling around the electronic world. Where is the ROI from capital in the WC.Clinton / B.Liar / Brown regimes, that
were so boastful of their economic policies. Where are the snows of yesteryear?
Tim Jenkins
Well said, Stephen: this wholly weird wee article certainly begs the question, how old is & where was this tainted memory &
member of academia in the 'Winter of '79' ? and how could he have possibly missed all the denationalisation/privatisation,
beginning with NFC and onwards, throughout the '80's, under Thatcher ? Culminating in screwing UK societal futures, by failing
to rollout Fibre Optic Cable in the UK, (except for the Square Mile city interests of London) which Boris now promises to do
today, nationwide,
a mere 30 years too damn late, when it would have been so cheap, back then and production costs could have been tied to
contracts of sale of the elite British Tech. at that time
Worth reading both part one & two of that link, imo scandalous !
Nice wholly suitable reference to Althusser 😉 say no more.
Talk about 'Bonkers' 🙂 we shan't be buying the book, for sure 🙂
Your comment was way more valuable. Do people get paid for writing things like this, these days. I was just outside Linz
for 2 months, just before last Christmas and I found more knowledgeable people on the street, in & around Hitler's ole' 'patch',
during his formative years, on the streets of Linz: where the joke goes something along the lines of
"If a homeless unemployed artist can't make it in Austria, he has nothing to fear, knowing that he can be on the road to
becoming the Chancellor of Germany in just another year "
BigB
I was right with you to the end, Stephen. Althusser killed his wife for sure: but he was deemed insane and never stood trial.
He was almost certainly suffering from a combination of conditions, exacerbated by a severe form of PTSD, as we would call
it now.
Whether or not one has sympathy for this has become highly politicised. Classic Liberals, anti-communists, and radical feminists
always seem to portray the 'murder' as a rational act of the misogynistic male in the grips of a radical philosophy for which
wife murder is as natural a consequence as the Gulag. His supporters try to portray the 'mercy' killing of Helene as an 'act
of love'. It wasn't that simple though, was it? Nor that black and white.
I cannot imagine what life was like in a German concentration camp for someone who was already suffering from mental illness.
From what I have read: the 'treatment' available in the '50s was worse than the underlying condition. He was also 'self-medicating'.
I cannot imagine what the state of his mind was in 1980: but I am inclined to cut him some slack. A lot of slack.
I cannot agree with your last statement. Althusser's madness was not a global trigger event – proceeding as a natural consequence
from "hyper-subjectivist post-modernism". Which makes for a literary original, but highly inaccurate metaphor. Not least because
Althusser was generally considered as a Structuralist himself.
Other than that, great comment.
Stephen Morrell
I understand your sentiments toward Althusser, and am sorry if my remarks about him were insensitive or offensive. However,
I know from personal experience of hardline Althusserian academic philosophers who suddenly became post-modernists after the
unfortunate incident. The point I was trying to make was that his philosophy wasn't abandoned for philosophical reasons but
non-philosophical, moral ones. It wasn't a condemnation of Althusser. It was a condemnation of many of his followers.
I made no claim that this was some kind of 'global trigger event'. Philosophy departments, or ideas as such, don't bring
change. If post-modernism didn't become useful to at least some sectors of the ruling class at some point, then it would have
remained an academic backwater (as it should have). Nor that post-modernism was some kind of 'natural consequence' of structuralism
(which is what I think you meant). Philosophically, it was a certainly one reaction to structuralism, one among several. Other
more rational reactions to structuralism included EP Thompson's and Sebastiano Timpinaro's.
As Marx said, "the ideas of the ruling class are in every epoch the ruling ideas" [German Ideology], and if the ruling class
finds some of them useful they'll adopt them. Or as Milton Friedman, one of the main proponents of neoliberalism, proclaimed:
"Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on
the ideas that are lying around." Post-modernism, as a philosophy 'lying around', serves as a nice philosophical/ideological
fit for the intelligentsia to rationalise the anti-science ideology the ruling class today is foisting on rest of the population.
Politically, Althusser was disowned by many French leftists for his support of the thoroughly counter-revolutionary role
of the Stalinist PCF in the 1968 May events. His authority lasted for over a decade longer in the Anglophone countries.
Lochearn
"In Anglophone philosophic academia at least, post-modernism really picked up only after Althusser strangled his wife, and
hyper-objectivist structuralism correspondingly was strangled by hyper-subjectivist post-modernism."
Wonderful sentence. I'll keep that – if I may – for some imaginary dinner table with some imaginary academic friends.
Tim Jenkins
I was thinking exactly the same and imagining the window of opportunity to provoke some sound conversation, after some spluttering of red w(h)ine
Stephen Morrell
Thank you. I'll rephrase it to improve it slightly if you like:
In Anglophone philosophic academia at least, post-modernism really picked up only after Althusser strangled his wife, and
in revenge hyper-objectivist structuralism was strangled by hyper-subjectivist post-modernism.
Red Allover
Mr. Morrell's use of the phrase "stultifying Stalinist bureaucracies," to describe the actually existing Socialist societies
of the Eastern bloc, indicates to me that he is very much of the bourgeois mind set that he purports to criticize. This "plague
on both your houses" attitude is very typical of the lower middle class intellectual in capitalist countries, c.f. Chomsky,
Zizek, etc.
Stephen Morrell
On the contrary, all the remaining workers states (China, North Korea, Viet Nam, Laos and Cuba) must be defended against imperialist
attack and internal counterrevolution despite the bureaucratic castes that hold political power in these countries. Political,
not social, revolutions are needed to sweep away these bureaucracies to establish organs of workers democracy and political
power (eg soviets) which never existed in these countries (unlike in the first years of the USSR).
To his last days, the dying Lenin fought the rising bureaucracy led by Stalin, but Russia's backwardness and the failure
of the revolution to spread to an advanced country (especially Germany, October 1923) drove its rise. Its ideological shell
was the profoundly reactionary outlook and program of 'Socialism in One Country' (and only one country). And while Stalin defeated
him and his followers, it was Trotsky who came to a Marxist, materialist understanding of what produced and drove the Soviet
Thermidor. Trotsky didn't go running off to the bourgeoisie of the world blubbering about a 'new class' the way Kautsky, Djilas,
Shachtman, Cliff, et al. did.
The restoration of capitalism in the Soviet Union was a profound defeat for the working class worldwide, as it would be
for the remaining workers states. Now if that's a 'bourgeois mindset' of a 'lower middle class intellectual', be my guest and
nominate the bourgeois or petty bourgeois layers that hold such views. Certainly Chomsky, Zizek et al. couldn't agree with
such an outlook, but it's only the bourgeoisie and the Stalinists who contend that the workers states are 'socialist' or 'communist'.
Only a true post-modernist could delude themselves into concurring, or claim that the political repression, censorship and
corrupting bureaucratism of the Stalinist regimes were indeed not stultifying.
Red Allover
Thanks for your intelligent response. I am very familiar with the Trotskyist positions you outline. I could give you the Leninist
rebuttal to each of them, but you are probably familiar with them as well. I don't want to waste your time, or mine. However,
if you don't mind me asking, exactly at what point do you feel capitalism was restored in the USSR? It was, I take it, with
the first Five Year Plan, not the NEP?
Also, the Socialist or, to use your nomenclature, "Stalinist" system, that was destroyed in the the USSR in the 1990s–it was,
in truth, just one form of capitalism replaced by another form of capitalism? Would this summarize your view accurately?
Stephen Morrell
Capitalism was restored in the USSR in 1991-92. Stalinism was not another form of capitalism, as the Third Campists would contend.
The Stalinist bureaucracy rested on exactly the same property relations a socialist system would which were destroyed with
Yeltsin's (and Bush's) counterrevolution. Last, I've never labelled the Stalinist bureaucracy as a 'system'.
Perhaps if you changed your moniker to: "Troll Allover" one could take you seriously, well, not really – 'seriously' – but
at least in a sort of weird, twisted & warped post-modern sense – eh?
Red Allover
I'm sorry, what is the argument you are making? I know name calling is beneath intelligent, educated people.
When I arrived in the United States from France in 1999, I felt like I was entering the land of free markets. Nearly
everything -- from laptops to internet service to plane tickets -- was cheaper here than in Europe.
Twenty years later, this is no longer the case. Internet service, cellphone plans, and plane tickets are now much
cheaper in Europe and Asia than in the United States, and the price differences are staggering. In 2018, according to
data gathered by the comparison site Cable
, the average monthly cost of a broadband internet connection was $29 in
Italy, $31 in France, $32 in South Korea, and $37 in Germany and Japan. The same connection cost $68 in the United
States, putting the country on par with Madagascar, Honduras, and Swaziland. American households spend about $100 a
month on cellphone services, the Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics indicates.
Households in France and Germany pay less than half of that, according to the economists Mara Faccio and Luigi Zingales.
None of this has happened by
chance. In 1999, the United States had free and competitive markets in many industries that, in Europe, were dominated
by oligopolies.
Today the opposite is true. French households can typically choose
among five or more internet-service providers; American households are lucky if they have a choice between two, and many
have only one. The American airline industry has become fully oligopolistic; profits per passenger mile are now about
twice as high as in Europe, where low-cost airlines compete aggressively with incumbents.
This is in part because the rest of the world was inspired by the United States and caught up, and in part because
the United States became complacent and fell behind. In the late 1990s, legally incorporating a business in France took
15 administrative steps and 53 days; in 2016,
it took only four days
. Over the same period, however, the entry delay in the United States went up from four days
to six days. In other words, opening a business used to be much faster in the United States than in France, but it is
now somewhat slower.
More Stories
The irony is that the free-market ideas and business models that benefit European consumers today were inspired by
American regulations circa 1990. Meanwhile, in industry after industry in the United States -- the country that invented
antitrust laws -- incumbent companies have increased their market power by acquiring nascent competitors, heavily lobbying
regulators, and lavishly spending on campaign contributions. Free markets are supposed to punish private companies that
take their customers for granted, but today many American companies have grown so dominant that they can get away with
offering bad service, charging high prices, and collecting, exploiting, and inadequately guarding their customers'
private data.
In Europe, greater integration among national economies turned out to be a force for greater competition within
individual economies. The very same politicians who disliked free markets at home agreed to promote them at the European
level. Why? Because everyone understood that the single market required independent regulators as well as a commitment
that individual countries would not subsidize their domestic champions.
As it turned out, politicians were more worried about the regulator being captured by the other country than they
were attracted by the opportunity to capture the regulator themselves. French (or German) politicians might not like a
strong and independent antitrust regulator within their own borders, but they like even less the idea of Germany (or
France) exerting political influence over the EU's antitrust regulator. As a result, if they are to agree on any
supranational institution, it will have a bias toward more independence.
The case of the industrial giants Alstom and Siemens provided an almost perfect test of my theory. After Germany's
Siemens and France's Alstom decided in 2017 to merge their rail activities, the EU's two largest and most influential
member states both wanted the merger approved. But the EU's powerful competition commissioner, Margrethe Vestager, stood
her ground. She and her team concluded that the merger "would have significantly reduced competition" in signaling
equipment and high-speed trains, "depriving customers, including train operators and rail-infrastructure managers, of a
choice of suppliers and products." The European Commission blocked the merger in February 2019.
In the United States, meanwhile, antitrust enforcement has become less stringent, while the debate over market
competition has become highly ideological and untethered from what data actually show.
A central argument of the Chicago school of antitrust -- whose laissez-faire approach was influential in persuading
American regulators to take a more hands-off attitude toward mergers -- is that monopoly power is transient because high
profits attract new competitors. If profits rise in one industry and fall in another, one would expect more entry of new
firms in the former than in the latter. This used to be true -- until the late 1990s.
Since about 2000,
however, high profits have persisted, rather than attracting new competitors to the American market. This suggests a
shift from an economy where entry acted as a fundamental rebalancing mechanism to one where high profits mostly reflect
large barriers to entry. The Chicago school took free entry for granted and underestimated the many ways in which large
firms can keep new rivals out.
What the Chicago school got right, however, is that some of these barriers to entry come from excessive regulations.
In some industries, licensing rules directly exclude new competitors; in other cases, regulations are complex enough
that only the largest companies can afford to comply.
Instead of debating more regulation versus less -- as ideologues on the left and right tend to do -- Americans should be
asking which regulations protect free markets and which ones raise barriers to entry.
Creeping monopoly power has slowly but surely suffocated the middle class. From 2000 to 2018, the median weekly
earnings of full-time workers increased from $575 to $886, an increase of 54 percent, but the Consumer Price Index
increased by 46 percent. As a result, the real labor income of the typical worker has grown by less than one-third of 1
percent a year for nearly two decades. This explains in part why much of the middle class distrusts politicians,
believes the economic system is rigged, and even rejects capitalism altogether.
What the middle class may not fully understand, however, is that much of its stagnation is due to the money that
monopolists and oligopolists can squeeze out of consumers. Telecoms and airlines are some of the worst offenders, but
barriers to entry also drive up the prices of legal, financial, and professional services. Anticompetitive behavior
among hospitals and pharmaceutical companies is a significant contributor to the exorbitant cost of health care in the
United States.
In my research on monopolization in the American economy, I estimate that the basket of goods and services consumed
by a typical household in 2018 cost 5 to 10 percent more than it would have had competition remained as healthy as it
was in 2000. Competitive prices would directly save at least $300 a month per household, translating to a nationwide
annual household savings of about $600 billion.
And this figure captures only half of the benefits that increased competition would bring. Competition boosts
production, employment, and wages. When firms face competition in the marketplace, they also invest more, which drives
up productivity and further increases wages. Indeed, my research indicates that private investment -- broadly defined to
include plants and equipment, as well as software, research and development, and intellectual property -- has been
surprisingly weak in recent years, despite low interest rates and record profits and stock prices. Monopoly profits do
not translate into increased investment. Instead, just as economic theory predicts, they flow into dividends and share
buybacks.
Taking into account these indirect effects, I estimate that the gross domestic product of the United States would
increase by almost $1 trillion and labor income by about $1.25 trillion if we could return to the levels of competition
that prevailed circa 2000. Profits, on the other hand, would decrease by about $250 billion. Crucially, these figures
combine large efficiency gains shared by all citizens with significant redistribution toward wage earners. The median
household would earn a lot more in labor income and a bit less in dividends.
If America wants to lead once more in this realm, it must remember its own history and relearn the lessons it
successfully taught the rest of the world. While legal scholars and elected officials alike have shown more interest in
antitrust in the United States of late, much of that attention has been focused exclusively on the major internet
platforms. To promote greater economic prosperity, a resurgence of antitrust would need to tackle both new and old
monopolies -- the Googles and Facebooks and the pharmaceutical and telecom companies alike.
Regardless of these predictable challenges, renewing America's traditional commitment to free markets is a worthy
endeavor. Truly free and competitive markets keep profits in check and motivate firms to invest and innovate. The 2020
Democratic presidential campaign has already generated some interesting policy proposals, but none that, like restoring
free markets, would increase labor income by more than $1 trillion. Taxes cannot solve all of America's problems. Taxes
can redistribute. Competition can redistribute, but it can also grow the pie.
"Behold the aggrieved, reactive creature fashioned by neoliberal reason and its effects, who
embraces freedom without the social contract, authority without democratic legitimacy, and
vengeance without values or futurity. Far from the calculating, entrepreneurial, moral, and
disciplined being imagined by Hayek and his intellectual kin, this one is angry, amoral, and
impetuous, spurred by unavowed humiliation and thirst for revenge.
The intensity of this energy is tremendous on its own, and also easily exploited by
plutocrats, rightwing politicians, and tabloid media moguls whipping it up and keeping it
stupid. It does not need to be addressed by policy producing its concrete betterment because it
seeks mainly psychic anointment of its wounds. For this same reason it cannot be easily
pacified -- it is fueled mainly by rancor and unavowed nihilistic despair. It cannot be
appealed to by reason, facts, or sustained argument because it does not want to know, and it is
unmotivated by consistency or depth in its values or by belief in truth.
Its conscience is weak while its own sense of victimization and persecution runs high. It
cannot be wooed by a viable alternative future, where it sees no place for itself, no prospect
for restoring its lost supremacy. The freedom it champions has gained credence as the needs,
urges, and values of the private have become legitimate forms of public life and public
expression.
Having nothing to lose, its nihilism does not simply negate but is festive and even
apocalyptic, willing to take Britain over a cliff, deny climate change, support manifestly
undemocratic powers, or put an unstable know-nothing in the most powerful position on earth,
because it has nothing else. It probably cannot be reached or transformed yet also has no
endgame.
But what to do with it? And might we also need to examine the ways these logics and energies
organize aspects of left responses to contemporary predicaments?"
If it is true that humans very often fall in worship at the feet of Mammon, which very few
reasonable people would contest, and if this idolatry produces almost wholly unwanted
outcomes, a few important observations immediately follow.
The first might be that the so-called market and its allegedly 'neutral' distributive
mechanisms do not produce the best of all possible worlds as a result of people trading with
each other in pursuit of ever more money. The primary reason for this is that market
fundamentalism takes no account of power and its symbiotic relationship with money; indeed,
it is logically required by its fundamental tenets to deem money a 'neutral veil' that
enables market activity as a kind of infinite and inert catalyst.
The second, and far more important, is what we hold to be valuable at the cultural level,
and how we go about systemically measuring and distributing that value. Currently, money is
the primary, almost only, tool for that job. Thus, if we cannot financially afford to do a
thing, that thing is not worth doing by definition, even to the point of actively not doing
what is actually affordable and desirable in terms of available resources and know-how to
protect and nourish the environment that makes our very existence possible. Essentially, this
'illogic' is how societies operate today. With money as their guiding value system deep in
their core functioning we are congenitally condemned to choose 'profitable' endeavours that
are in fact destructive and socially corrosive over the long term.
The third is that there is thus something badly wrong in our cultural sense of what value
is, how to generate it, and how to distribute it. The cure for this ill lies, in part, in
dissolving the boundaries between various relevant disciplines – e.g., ecology,
physics, sociology, economics, etc. – to some degree. For, while market-based economics
wholly dominates how we think about and operate money, the general problem so sharply
illustrated in the article above will persist, even though most of us, the vast majority of
us, want that problem to go away. One pivotal element of what ought to be undertaken, in my
view, is a very critical and open-minded look at how price and scarcity are interlocked, and
how their symbiotic relationship influences how we perceive value, then over-consume as
guided by that highly incomplete perception, and consequently fail to prioritize vital human
vales such as trust, meaning and belonging.
Toby Russell
I wish I could, vexarb, but know only of a few decent ones that critique rather than offer
solid ideas for complete overhauls, which is what is needed. One little volume that at least
examines some alternative money systems and is also easy reading is Richard Douthwaite's "The
Ecology of Money".
Aside from that there's Herman Daley's multi-decade commitment to steady-state economics,
though he only recently began looking at the money system as a driver of perpetual growth,
and I'm not sure what he's put forth on that pivotal point.
There's also "Sacred Economics" by Charles Eisenstein, but his offered solution –
negative interest rates funding a guaranteed income as a kind of flowing 'money out from the
top / money in at the bottom' dynamic – is likely both impractical and paradoxically
too rooted in compound interest and money-profit to really work as expected, though that's my
personal opinion. Besides, when radically new is needed, open-minded experimentation is the
order of the day.
There's also biophysical
economics , but I've only looked at it briefly and that was quite a while ago.
If you read German, there's Franz Hoermann's Infogeld , which is the idea that
most interests me. It includes novelties such as asymmetrical prices that are determined
scientifically/democratically in terms of actual biophysical costs rather than via so-called
'price discovery', guaranteed basic provision (not income), earning Infomoney for studying,
parenting, staying healthy, etc., and a broad philosophical approach that recognizes how
complex and subtle real value is, and that linear numbers simply cannot measure it. I
translated/paraphrased much of his work a few years ago. It can be found here . It's not a
fully fleshed-out idea, just a collection of sketched pieces, but with work and
experimentation it might become what's needed
vexarb
Toby, many thanks for your considered reply. I have marked two of your recommendations for my
own reading and as presents for the Festive Season to my grand daughter who is studying both
ecology and biophysics: "The Ecology of Money" and Biophysical Economics. The latter seems to
be an expansion of Findlay's notion (as a chemist) that wealth ought to be measured in units
of energy (an idea which was taken up by our professor of Chemical Thermodynamics in the 50s
by comparing nations in terms of their "energy slaves per capita". Ecology and Biophysics are
sciences, which is why I was attracted by your 3 principles in the first place.
Anecdote to explain where I am coming from: Many years ago Shell Oil inflated the price of
their oil reserves; this caused a flutter in business news but I could not understand what
the fuss was about because Shell's figures did not affect the real amount of oil that was
actually there, underground.
Toby Russell
Interesting. And if we go back to the 1930s we find the work of another chemist, Frederick
Soddy, who also tackled economics and wealth, in particular how to design a money system that
acted in accordance with physical laws, so to speak (e.g. "The Role of Money"). I believe he
won a Nobel Prize for his chemistry, but was soundly poopooed by the economists of the time
for meddling in their business.
I personally think that wealth and value, as synonyms, cannot ever be objectively defined
or measured as they are rooted in subjective experience. Any new economics worth the effort
will need to take proper account of this fact, alongside all the necessary biophysics and
ecology of course. All schools of the dismal 'science' do address this issue, but with
varying degrees of philosophical rigour. The treatments of subjective value I have looked
into within economics thus far are unsatisfactory (behavioural economics somewhat excepted),
with the market invariably posited as a neutral (thus scientific) 'objectifier' of all that
subjective trading between households and firms.
vexarb
Toby, firstly thanks for the gentle correction: yes it was Soddy who proposed "energy pence",
though Findlay was very keen on Chemistry in the Service of Humankind. And I agree thoroughly
with your own doubt "that wealth and value, as synonyms, cannot ever be objectively defined
or measured as they are rooted in subjective experience."
"A person who knows the price of everything and the value of nothing" -- Oscar Wilde.
Your remark seems to throw an interesting light on a well known saying by Rabbi Jeshuah of
Nazareth: "You cannot serve both God and Mammon" -- if by God you mean the Creator of All
Things Bright and Beautiful, All Creatures Great and Small, All things Wise and Wonderful";
and my Mammon you mean the Creator of Fiat Money alone.
Toby Russell
Excellent, thank you for that, BigB! Wow, and John McMurtry got a mention in there. I'll see
your McMurtry and raise you a Jackson
(I have to say, your thinking and hopes align quite tightly with those of Franz Hoermann.
Shame his work is in German. He's a kind of nutty professor, works in a Viennese university
in Rechnungswesen or something, which is some form of accountancy, but is very widely read
and open-minded.)
Around 2007/2008, I became obsessed with money systems for obvious reasons. I started a
blog sharing my angry insights and laying out as clearly and angrily as I could Why Money Has
To Go! What I discovered is that people don't want to know, can't imagine a world without
money, and I concluded that the cultural lag preventing radical change is a true
representation of where we are as a species, as consciousness in human form. Our state of
consciousness is as natural as everything else. After all, there is only nature. Even
deliberate, malicious distortions of nature are part of nature. And that's when I really
started working on myself, which is of course the work of lifetimes. Because, to paraphrase
that infamous Michael Jackson song; you can't change them, you can only change yourself.
BigB
Have you read any late Merleau-Ponty? He was largely overshadowed by his better known friends
Sarte and Simone de Beauvoir. After his death he slipped into the shadow of Sartre's shadow
of fame – and was largely forgotten.
He was a huge influence on Varela. Around 2005: some of his late lecture notes turned up
– made by an anonymous student – and there were several books published. This has
sparked a minor revival in his significance: which I have been revisiting for the last few
years.
He held the view of the nature we know as a *constructum* a scientific representationalism
that is an active barrier – not to the nature 'without' but the nature within. The
*chair du monde* the 'flesh of the world' the heart of all creation and experience.
He was undergoing a Gestalt: to put pure phenomenological experience at the heart of
nature – thus liberating science from itself. Echoes of Schrodinger, Bohr, Eccles,:
presaging Bohm, Varela, Bitbol etc.
Unfortunately, he died suddenly of a stroke. Sartre and de Beauvoir stole the limelight
'till now.
Regarding money value systems. I wholly concur with you and your "nutty professor"
Hoermann. The general or Husserlian 'natural attitude' is based on money. What is hard to
discern: is that it is based on it whether people have 'skin in the game'. Everyone wishes
the market to do well: because they have 'dreams in the game'. If the economy does well:
there will be a return to progress and prosperity – where 'I' will do well. This has
nothing to do with access to capital. Access to dreams and values linked to capital are all
that is required. Free-enterprise market based economies are really 'desire-dream production'
facilities. Linking Freudian pleasure principles to actual production and valorisation of
capital. This is Mark Fisher's 'Capitalist Realism'.
That is why the production function is not linked to any real world values. If it were:
production – desire-dream production – would stop. Which is why Ayers, Keen,
Kummel, Spash et al will be rejected. Because exergy and entropy considerations end the
desire-dream "actual fantasy" production. And it can never be restarted.
The real reasons for which are not lack of resources (input source degradation) – or
waste pollution of sinks (output sink degradation) they are lack of imagination. If you take
away the current money-value nexus: you take away the Self that is invested –
self-invested: at all market levels (not just capital markets) – in those values. Value
and asset stripping the epochal Cartesian subjectivity of its worth. The paradox is that
worth is already less than zero – due to the market failure and artificial intervention
of the Central Banks.
Cartesian subjectivity is self-invested in a Capitalist Realism that is about to asset
strip and devalue every form of desire-dream production – downgrading entire continents
of human aspirations to 'negative yielding junk' status. That is Capitalist Realism. In the
coming market failure: everyone fails. There will be carnage – and deaths. And a
tsunami of recrimination and blame.
A tiny percentage of 'Cassandras' will be powerless to stop this. All the information is
in the public domain. I had no trouble finding any of it. The picture is crystal clear.
Whilst the majoritarian involvement is with desire-dream production of perpetual motion
prosperity: something entirely different is actually occurring. I cannot think of anyone that
is looking at the coming collapse as anything other than the end of another business cycle.
We'll just start another business cycle. How?
It's a fair question: one very few want to confront. There is no Plan B: because there is
no doubt of the answer. The current political debate is pure pantomime and fantasy if you
apply real world dynamical constraints. I wish Steve Keen every success: though I truly
believe it has come too late in the day.
I think we would have more success following Merleau-Ponty and foregoing the entire
reliance on desire-dream production. Whole people who are actuating life and creation as a
syngenesis – the 'together creation' of a valueless value-equality system – don't
need spurious dreams. They are living the dream right now. No need to rape the earth. Only
preserve it as the only shared value production system we have. But you already know
this.
BigB
Unbeknownst to me: Ted Trainer has been reviewing a similar reading list to me. And drawn the
same "true prophecy" conclusion: we are already in a post-production world.
From the above discussion, one could conclude that conventional economic theory is standing
on its head: it uses money as a measure of wealth, when in reality wealth is the measure of
money.
Take the Icelanders for example: the only "Western" country to follow China's excellent
practice of jailing crooked bankers. The Icelandic Leader did not look at the enormous sums
stolen, and exclaim in awe, These crooks are too big to fail. Instead, Iceland looked at
their real wealth: water, fish, a fragile but productive soil, and geothermal energy. So they
cocked a snook at British PM George Brown who called Icelanders "terrorists", jailed their
crooked bankers and their crooked politicians, and are doing much better than the UK's
Classical Monetarist economy.
Toby Russell
Precisely. In a very real sense, we are a simple 180 degree twist away from something
wonderful. Its our collective somnambulist imagination that stands in our way.
BigB
Precisely.
WEALTH:
From Middle English – *wele* = wellbeing; welfare
closely allied to HEALTH – *hoelp* = wholeness; being whole (among other roots).
The word has been engineered in use into a narrowly defined measure of accumulation.
Real wealth is simply being here. Economies do not allow for that anymore.
Toby Russell
Thank you. No, I hadn't heard of Merleau-Ponty but will now look into him. It sounds very
observant, clear sighted. There is so much of this stuff out there, but the deep dog-whistle
excellence of public-relations brain washing has been able to keep the infantile solipsism
– which I take to be Cartesian subjectivity – alive and kicking in its pram of
consumer conveniences. Who knows what the cost will be.
BigB
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It is way to early to falsely declare that the individual Cartesian subject is dead. But it
its disembodied subjectivity is under threat: from the very science that stands between us
and nature.
We supposedly live in a positivist empirical scientific paradigm. Supposedly: because we
left us out of the representation. And the rational empirical Self we invented from science
and philosophy is nowhere to be found for anyone who cares to look. Which is too few
unfortunately.
No one wants to totally debunk science: only to liberate an observer participant/dependent
second order science – with first person phenomenology at its heart. After all: we do
not experience ourselves via self-reports to others who dictate back to us what and who we
can be. Actually, we pretty much do exactly that for the moment.
To bridge the gap: Varela proposed his 'neurophenomenology' – which was a rigorous
first person accounting "mutually constraining" the third person neursoscientific lab
approach (how much we are supposed to learn from 'rubber hand' illusions – I have never
quite been sure. In fact I believe this 'third person' approach to be quite distorting and
very possibly even dangerous we 'hallucinate' consciousness; reality is an illusion;
etc).
We need to end up with a holistic account – not a 'Frankenstein' paradigm stitched
together from phantom limb pains; whole body illusions; aphasia and lesion studies; etc.
We are whole: not the sum of our dead deterministic parts! What a pity Varela died too
soon too.
Toby Russell
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Yes, a holistic account. For me that starts with accepting there is no matter, just
information; no space, just the mathematics of dimension, volume, distance, etc.; no energy,
just the mathematics and physics of force, attraction, repulsion, etc.: all information.
There is only experience, which is a necessary property of consciousness. We cannot know what
is 'beyond' that, because it lies outside what we are. We cannot even know if anything
'beyond' consciousness is possible.
And yes, the proposition that dead bits and pieces can be arranged in such a way as to
create the 'illusion' of life and consciousness is wholly untenable. Just the simple query:
"Who or what is being deceived by the illusion?" bursts that bubble. Or ought to. People do
so cling to their beliefs
Tim Jenkins
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Fine comment, Toby and may I submit that for real values to shine through, on collective
societal 'growth' & evolution of consciousness, harmonised with critical reasoning, then
the very first thing we need to get rid of is the IMF & Co.
Now that Kristalina Georgieva is the new M.D. people should be able to quickly see
clearly, that after her 1,001 days at the WBO and her previous pathetic E.U. C.V. one does
not need to understand ANYthing to do with how the system truly functions presently & how
it could be made to work for the people.
Stalinka's wholly unsuitable levels of deception, distraction & professional
incompetence, combined with her love & respect for Mafia Bosses, (literally), in her own
personal drive of pure self-interest and fuck Bulgaria and the Bulgarians mentality, was well
proven when she sided against Irina Bokova for Secretary General of the U.N. :- purely to get
on side with Merkel, May & BG PM Borisov's alliance with Anglo-Zionist-Capitalists &
NATO's non-existent interest in the Palestinian Problem. Bokova, on the other hand, had
actually done more than just getting down to work in changing Law and scything Budgets
@UNESCO and since serving as boss of UNESCO, thanks to Bokova we can now proceed legally,
theoretically, against any genocidal policy of war, because in Law,
"The Destruction of Culture is a Terrorist Act "
A solid foundation from which to work from,
in securing Palestinian 'values' & property rights.
Forget the IMF & Stalinka's rhetoric: we don't grow olives in Bulgaria, but have much to
trade with those who do and after Erdogan's "Operation Olive Branch", it is high time people
penalised Rhetoric & rewarded Sincerity in actions, not empty words inverting
& perverting reality . . . to twist trust, spin meaning & annulate cultural
belonging.
"This idolatry produces almost wholly unwanted outcomes" no 'ifs', Toby.
Greetings,
Tim
Toby Russell
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Thank you, Tim.
Yes, the evolution of consciousness is central. Indeed, I don't think we'll manage to
lastingly root out our need for corruptible institutions like the IMF and World Bank and BIS
etc., until we have developed or evolved a robust cultural desire to do things very
differently. I don't feel a top-down change can happen. And for radical change to be bottom
up, effective, sustainable and true to who we are as humans, we have to change in our
consciousness, away from fear, distrust and greed, towards love, trust and sharing. And these
things take time
smoe
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yes , boundaries present profit opportunities. The nation states are bounded human
containers.. the humans caught in the containers are fed the information that makes up the
environment and so they only know what is made available to them. That means those in control
of the propaganda can differentiate the humans and then sort them by binaries..
like gun control, or politicians, or race, place of origin, social factors, education, mental
ability, religion or just about anything.. But separation is not enough, those in control of
the information (propaganda) then polarize the thinking or feelings of the persons in the
differentiated groups; its like a football game, everyone is either for the Red Team and
strongly against the blue team, or vice-a-versa.
If you exchange a new born child, born to a Jewish family in New York, for a child born
the same day in Iran.and and the parents of the exchanged children mature in their own native
societies the non genetic child, 24 years later. the adult version of these two now matured
children will hate each other, not be able to speak the language of the other and be
committed to a vastly different set of goals and hold a vastly different set of basic
beliefs.
Nation state encapsulation allows to different humanity and propaganda allows to polarize
the thinking of those incarcerated within the nation states. These two things (boundary and
propaganda) account for, or are the basis of citizen support for all wars, and binary
differences that lead to reasoned differences of opinions. War comes about when some greedy
person (usually those supporting the leader and the leader) wants something the polarized
other side has or refuses to yield on.
Toby Russell
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Yes. Your summation reminds me strongly of Lewis Mumford's The Myth of the Machine, which is
about how unchecked ego – the mythic solar hero run rampant – structures
societies as mechanical-processional systems revolving around its hidden fears and need for
final control of everything. Of course there is never enough control and it all breaks in the
end, as narcissism must.
I should add, though, that diversity is vital. Life without diversity is impossible. The
way for us all, unique as we are, to communicate as successfully as possible with each other,
is to have zero beliefs, as you suggest in another comment above. That means almost zero
propaganda, and that little which might remain – there may always be a need for some
common vision of what life is about as part of meaning making and the fact that humans are
social beings – must be explicit and transparent, and always open to robust
questioning.
Japan has a shrinking population. Can you explain to me why on the Earth they need
economic growth?
This preoccupation with "growth" (with narrow and false one dimensional and very
questionable measurements via GDP, which includes the FIRE sector) is a fallacy promoted by
neoliberalism.
Neoliberalism proved to be quite sophisticated religions with its own set of True
Believers in Eric Hoffer's terminology.
A lot of current economic statistics suffer from "mathiness".
For example, the narrow definition of unemployment used in U3 is just a classic example of
pseudoscience in full bloom. It can be mentioned only if U6 mentioned first. Otherwise, this
is another "opium for the people" ;-) An attempt to hide the real situation in the neoliberal
"job market" in which has sustained real unemployment rate is always over 10% and which has a
disappearing pool of well-paying middle-class jobs. Which produced current narco-epidemics
(in 2018, 1400 people were shot in half a year in Chicago (
http://www.chicagotribune.com/news/breaking/ct-met-weekend-shooting-violence-20180709-story.html
); imagine that). While I doubt that people will hang Pelosi on the street post, her
successor might not be so lucky ;-)
Everything is fake in the current neoliberal discourse, be it political or economic, and
it is not that easy to understand how they are deceiving us. Lies that are so sophisticated
that often it is impossible to tell they are actually lies, not facts. The whole neoliberal
society is just big an Empire of Illusions, the kingdom of lies and distortions.
I would call it a new type of theocratic state if you wish.
And probably only one in ten, if not one in a hundred economists deserve to be called
scientists. Most are charlatans pushing fake papers on useless conferences.
It is simply amazing that the neoliberal society, which is based on "universal deception,"
can exist for so long.
The decrepitating of the world's society can be traced back to the crap, contemporary
economics, the purview of the Ivy league. Somehow, labor arbitrage was accepted as a worthy
objective. America lost it's way.
Yes it is, but only for couples with low level of marital satisfaction.
Notable quotes:
"... They also looked at marital breakup more generally, focusing on when couples decided to end their relationships (not necessarily if or when they got divorced). Their findings revealed that when men were unemployed, the likelihood that either spouse would leave the marriage increased. What about the woman's employment status? For husbands, whether their wife was employed or not was seemingly unimportant-it was unrelated to their decision to leave the relationship. It did seem to matter for wives, though, but it depended upon how satisfied they were with the marriage. ..."
"... When women were highly satisfied, they were inclined to stay with their partner regardless of whether they had employment. However, when the wife's satisfaction was low, she was more likely to exit the relationship, but only when she had a job. ..."
The first study considers government data from all 50 U.S. states between the years 1960 and 2005.1 The researchers predicted
that higher unemployment numbers would translate to more divorces among heterosexual married couples. Most of us probably would have
predicted this too based on common sense-you would probably expect your partner to be able to hold down a job, right? And indeed,
this was the case, but only before 1980. Surprisingly, since then, as joblessness has increased, divorce rates have actually
decreased.
How do we explain this counterintuitive finding? We don't know for sure, but the researchers speculate that unemployed
people may delay or postpone divorce due to the high costs associated with it. Not only is divorce expensive in terms of legal fees,
but afterward, partners need to pay for two houses instead of one. And if they are still living off of one salary at that point,
those costs may be prohibitively expensive. For this reason, it is not that uncommon to hear about estranged couples who can't stand
each other but are still living under the same roof.
The second study considered data from a national probability sample of over 3,600 heterosexual married couples in the U.S. collected
between 1987 and 2002. However, instead of looking at the overall association between unemployment and marital outcomes, they considered
how gender and relationship satisfaction factored into the equation. 2
They also looked at marital breakup more generally, focusing on when couples decided to end their relationships (not necessarily
if or when they got divorced). Their findings revealed that when men were unemployed, the likelihood that either spouse would leave
the marriage increased. What about the woman's employment status? For husbands, whether their wife was employed or not was seemingly
unimportant-it was unrelated to their decision to leave the relationship. It did seem to matter for wives, though, but it depended
upon how satisfied they were with the marriage.
When women were highly satisfied, they were inclined to stay with their partner regardless of whether they had employment.
However, when the wife's satisfaction was low, she was more likely to exit the relationship, but only when she had a job.
"... A good economy compensates for much social dysfunction. ..."
"... More than that, it prevents the worst of behaviors that are considered an expression of dysfunction from occurring, as people across all social strata have other things to worry about or keep them busy. Happy people don't bear grudges, or at least they are not on top of their consciousness as long as things are going well. ..."
"... This could be seen time and again in societies with deep and sometimes violent divisions between ethnic groups where in times of relative prosperity (or at least a broadly shared vision for a better future) the conflicts are not removed but put on a backburner, or there is even "finally" reconciliation, and then when the economy turns south, the old grudges and conflicts come back (often not on their own, but fanned by groups who stand to gain from the divisions, or as a way of scapegoating) ..."
"... "backwaters of America, that economy seems to put out fewer and fewer chairs." ~~Harold Pollack~ ..."
"... Going up through the chairs has become so impossible for those on the slow-track. Not enough slots for all the jokers within our once proud country of opportunities, ..."
"... George Orwell: "I doubt, however, whether the unemployed would ultimately benefit if they learned to spend their money more economically. ... If the unemployed learned to be better managers they would be visibly better off, and I fancy it would not be long before the dole was docked correspondingly." ..."
"... Perhaps you are commenting on the aspect that when (enough) job applicants/holders define down their standards and let employers treat them as floor mats, then the quality of many jobs and the labor relations will be adjusted down accordingly, or at the very least expectations what concessions workers will make will be adjusted up. That seems to be the case unfortunately. ..."
A good economy compensates for much social dysfunction.
A bad economy moves people toward the margins, afflicts those
near the margins and kills those at the margins.
This is what policy makers should consider as they pursue policies that do not put the citizen above all else.
cm -> Avraam Jack Dectis...
"A good economy compensates for much social dysfunction."
More than that, it prevents the worst of behaviors that are considered an expression of dysfunction from occurring, as
people across all social strata have other things to worry about or keep them busy. Happy people don't bear grudges, or at least
they are not on top of their consciousness as long as things are going well.
This could be seen time and again in societies with deep and sometimes violent divisions between ethnic groups where in
times of relative prosperity (or at least a broadly shared vision for a better future) the conflicts are not removed but put on
a backburner, or there is even "finally" reconciliation, and then when the economy turns south, the old grudges and conflicts
come back (often not on their own, but fanned by groups who stand to gain from the divisions, or as a way of scapegoating)
Dune Goon said...
"backwaters of America, that economy seems to put out fewer and fewer chairs." ~~Harold Pollack~
Going up through the chairs has become so impossible for those on the slow-track. Not enough slots for all the jokers within
our once proud country of opportunities, not enough elbow room for Daniel Boone, let alone Jack Daniels! Not enough space
in this county to wet a tree when you feel the urge! Every tiny plot of space has been nailed down and fenced off, divided up
among gated communities. Why?
Because the 1% has an excessive propensity to reproduce their own kind. They are so uneducated about the responsibilities of
birth control and space conservation that they are crowding all of us off the edge of the planet. Worse yet we have begun to *ape
our betters*.
"We've only just begun!"
~~The Carpenters~
William said...
"Many of us know people who receive various public benefits, and who might not need to rely on these programs if they made
better choices, if they learned how to not talk back at work, if they had a better handle on various self-destructive behaviors,
if they were more willing to take that crappy job and forego disability benefits, etc."
George Orwell: "I doubt, however, whether the unemployed would ultimately benefit if they learned to spend their money
more economically. ... If the unemployed learned to be better managers they would be visibly better off, and I fancy it would
not be long before the dole was docked correspondingly."
cm said in reply to William...
A valid observation, but what you are commenting on is more about getting or keeping a job than managing personal finances.
Perhaps you are commenting on the aspect that when (enough) job applicants/holders define down their standards and let
employers treat them as floor mats, then the quality of many jobs and the labor relations will be adjusted down accordingly, or
at the very least expectations what concessions workers will make will be adjusted up. That seems to be the case unfortunately.
"... In a recent interview Mr. Deaton suggested that middle-aged whites have "lost the narrative of their lives." That is, their economic setbacks have hit hard because they expected better. Or to put it a bit differently, we're looking at people who were raised to believe in the American Dream, and are coping badly with its failure to come true. ..."
"... the truth is that we don't really know why despair appears to be spreading across Middle America. But it clearly is, with troubling consequences for our society... ..."
"... Some people who feel left behind by the American story turn self-destructive; others turn on the elites they feel have betrayed them. ..."
"... What we are seeing is the long term impacts of the "Reagan Revolution." ..."
"... The affected cohort here is the first which has lived with the increased financial and employment insecurity that engendered, as well as the impacts of the massive offshoring of good paying union jobs throughout their working lives. Stress has cumulative impacts on health and well-being, which are a big part of what we are seeing here. ..."
"... Lets face it, this Fed is all about goosing up asset prices to generate short term gains in economic activity. Since the early 90s, the Fed has done nothing but make policy based on Wall Street's interests. I can give them a pass on the dot com debacle but not after that. This toxic relationship between wall street and the Fed has to end. ..."
"... there was a housing bubble that most at the Fed (including Bernanke) denied right upto the middle of 2007 ..."
"... Yellen, to her credit, has admitted multiple times over the years that low rates spur search for yield that blows bubbles ..."
"... Bursting of the bubble led to unemployment for millions and U3 that went to 10% ..."
"... "You are the guys who do not consider the counterfactual where higher rates would have prevented the housing bubble in 2003-05 and that produced the great recession in the first place." ..."
"... Inequality has been rising globally, almost regardless of trade practices ..."
"... It is not some unstoppable global trend. This is neoliberal oligarchy coup d'état. Or as it often called "a quite coup". ..."
"... First of all, whether a job can or is offshored has little to do with whether it is "low skilled" but more with whether the workflow around the job can be organized in such a way that the job can be offshore. This is less a matter of "skill level" and more volume and immediacy of interaction with adjacent job functions, or movement of material across distances. ..."
"... The reason wages are stuck is that aggregate jobs are not growing, relative to workforce supply. ..."
"... BTW the primary offshore location is India, probably in good part because of good to excellent English language skills, and India's investment in STEM education and industry (especially software/services and this is even a public stereotype, but for a reason). ..."
"... Very rough figures: half a million Chicago employees may make less than $800 a week -- almost everybody should earn $800 ... ..."
"... Union busting is generally (?) understood as direct interference with the formation and operation of unions or their members. It is probably more common that employers are allowed to just go around the unions - "right to work", subcontracting non-union shops or temp/staffing agencies, etc. ..."
"... Why would people join a union and pay dues when the union is largely impotent to deliver, when there are always still enough desperate people who will (have to) take jobs outside the union system? Employers don't have to bring in scabs when they can legally go through "unencumbered" subcontractors inside or outside the jurisdiction. ..."
"... Credibility trap, fully engaged. ..."
"... The anti-knowledge of the elites is worth reading. http://billmoyers.com/2015/11/02/the-anti-knowledge-of-the-elites/ When such herd instinct and institutional overbearance connects with the credibility trap, the results may be impressive. http://jessescrossroadscafe.blogspot.com/2015/11/gold-daily-and-silver-weekly-charts-pop.html ..."
"... Suicide, once thought to be associated with troubled teens and the elderly, is quickly becoming an age-blind statistic. Middle aged Americans are turning to suicide in alarming numbers. The reasons include easily accessible prescription painkillers, the mortgage crisis and most importantly the challenge of a troubled economy. The Center for Disease Control and Prevention claims suicide rates now top the number of deaths due to automobile accidents. ..."
"... The suicide rate for both younger and older Americans remains virtually unchanged, however, the rate has spiked for those in middle age (35 to 64 years old) with a 28 percent increase (link is external) from 1999 to 2010. ..."
"... When few people kill themselves "on purpose" or die from self-inflicted but probably "unintended" harms (e.g. organ failure or accidental death caused by substance abuse), it can be shrugged off as problems related to the individual (more elaboration possible but not necessary). ..."
"... When it becomes a statistically significant phenomenon (above-noise percentage of total population or demographically identifiable groups), then one has to ask questions about social causes. My first question would be, "what made life suck for those people"? What specific instrument they used to kill themselves would be my second question (it may be the first question for people who are charged with implementing counter measures but not necessarily fixing the causes). ..."
"... Since about the financial crisis (I'm not sure about causation or coincidence - not accidental coincidence BTW but causation by the same underlying causes), there has been a disturbing pattern of high school students throwing themselves in front of local trains. At that age, drinking or drugging oneself to death is apparently not the first "choice". Performance pressure *related to* (not just "and") a lack of convincing career/life prospects has/have been suspected or named as a cause. I don't think teenagers suddenly started to jump in front of trains that have run the same rail line for decades because of the "usual" and centuries to millennia old teenage romantic relationship issues. ..."
"There is a darkness spreading over part of our society":
Despair, American Style, by Paul
Krugman, Commentary, NY Times: A couple of weeks ago President Obama mocked Republicans who are "down on America," and reinforced
his message by doing a pretty good Grumpy Cat impression. He had a point: With job growth at rates not seen since the 1990s, with
the percentage of Americans covered by health insurance hitting record highs, the doom-and-gloom predictions of his political
enemies look ever more at odds with reality.
Yet there is a darkness spreading over part of our society. ... There has been
a lot of comment ... over a new paper by the economists Angus Deaton (who just won a Nobel) and Anne Case, showing that mortality
among middle-aged white Americans has been rising since 1999..., while death rates were falling steadily both in other countries
and among other groups in our own nation.
Even more striking are the proximate causes of rising mortality. Basically, white Americans are, in increasing numbers, killing
themselves... Suicide is way up, and so are deaths from drug poisoning and ... drinking... But what's causing this epidemic of
self-destructive behavior?...
In a recent interview Mr. Deaton suggested that middle-aged whites have "lost the narrative of their lives." That is, their
economic setbacks have hit hard because they expected better. Or to put it a bit differently, we're looking at people who were
raised to believe in the American Dream, and are coping badly with its failure to come true.
That sounds like a plausible hypothesis..., but the truth is that we don't really know why despair appears to be spreading
across Middle America. But it clearly is, with troubling consequences for our society...
I know I'm not the only observer who sees a link between the despair reflected in those mortality numbers and the volatility
of right-wing politics. Some people who feel left behind by the American story turn self-destructive; others turn on the elites
they feel have betrayed them. No, deporting immigrants and wearing baseball caps bearing slogans won't solve their problems,
but neither will cutting taxes on capital gains. So you can understand why some voters have rallied around politicians who at
least seem to feel their pain.
At this point you probably expect me to offer a solution. But while universal health care, higher minimum wages, aid to education,
and so on would do a lot to help Americans in trouble, I'm not sure whether they're enough to cure existential despair.
bakho said...
There are a lot of economic dislocations that the government after the 2001 recession stopped doing much about it. Right after
the 2008 crash, the government did more but by 2010, even the Democratic president dropped the ball. and failed to deliver. Probably
no region of the country is affected more by technological change that the coal regions of KY and WV. Lying politicians promise
a return to the past that cannot be delivered. No one can suggest what the new future will be. The US is due for another round
of urbanization as jobs decline in rural areas. Dislocation forces declining values of properties and requires changes in behavior,
skills and outlook. Those personal changes do not happen without guidance. The social institutions such as churches and government
programs are a backstop, but they are not providing a way forward. There is plenty of work to be done, but our elites are not
willing to invest.
DrDick -> bakho...
The problem goes back much further than that. What we are seeing is the long term impacts of the "Reagan Revolution."
The affected cohort here is the first which has lived with the increased financial and employment insecurity that engendered,
as well as the impacts of the massive offshoring of good paying union jobs throughout their working lives. Stress has cumulative
impacts on health and well-being, which are a big part of what we are seeing here.
ilsm said...
Thuggee doom and gloom is about their fading chance to reinstate the slavocracy.
The fever swamp of right wing ideas is more loony than 1964.
Extremism is the new normal.
bmorejoe -> ilsm...
Yup. The slow death of white supremacy.
Peter K. -> Anonymous...
If it wasn't for monetary policy things would be even worse as the Republicans in Congress forced fiscal austerity on the economy
during the "recovery."
sanjait -> Peter K....
That's the painful irony of a comment like that one from Anonymous ... he seems completely unaware that, yes, ZIRP has done
a huge amount to prevent the kind of problems described above. He like most ZIRP critics fails to consider what the counterfactual
looks like (i.e., something like the Great Depression redux).
Anonymous -> sanjait...
You are the guys who do not consider the counterfactual where higher rates would have prevented the housing bubble in 2003-05
and that produced the great recession in the first place. Because preemptive monetary policy has gone out of fashion completely.
And now we are going to repeat the whole process over when the present bubble in stocks and corporate bonds bursts along with
the malinvestment in China, commodity exporters etc.
Peter K. -> Anonymous...
"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system.
High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted,
and enterprising people will pick up from less competent people."
sanjait -> Anonymous...
"You want regulation? I would like to see
1) Reinstate Glass Steagall
2) impose a 10bp trans tax on trading financial instruments."
Great. Two things with zero chance of averting bubbles but make great populist pablum.
This is why we can't have nice things!
"3) Outlaw any Fed person working for a bank/financial firm after they leave office."
This seems like a decent idea. Hard to enforce, as highly intelligent and accomplished people tend not to be accepting of such
restrictions, but it could be worth it anyway.
likbez -> sanjait...
" highly intelligent and accomplished people tend not to be accepting of such restrictions, but it could be worth it anyway."
You are forgetting that it depends on a simple fact to whom political power belongs. And that's the key whether "highly intelligent
and accomplished people" will accept those restrictions of not.
If the government was not fully captured by financial capital, then I think even limited prosecution of banksters "Stalin's
purge style" would do wonders in preventing housing bubble and 2008 financial crush.
Please try to imagine the effect of trial and exile to Alaska for some period just a dozen people involved in Securitization
of mortgages boom (and those highly intelligent people can do wonders in improving oil industry in Alaska ;-).
Starting with Mr. Weill, Mr. Greenspan, Mr. Rubin, Mr. Phil Gramm, Dr. Summers and Mr. Clinton.
Anonymous -> Peter K....
"2003-2005 didn't have excess inflation and wage gains."
Monetary policy can not hinge just on inflation or wage gains. Why are wage gains a problem anyway?
Lets face it, this Fed is all about goosing up asset prices to generate short term gains in economic activity. Since the
early 90s, the Fed has done nothing but make policy based on Wall Street's interests. I can give them a pass on the dot com debacle
but not after that. This toxic relationship between wall street and the Fed has to end.
You want regulation? I would like to see
1) Reinstate Glass Steagall
2) impose a 10bp trans tax on trading financial instruments.
3) Outlaw any Fed person working for a bank/financial firm after they leave office. Bernanke, David Warsh etc included. That includes
Mishkin getting paid to shill for failing Iceland banks or Bernanke making paid speeches to hedge funds.
Anonymous -> EMichael...
Fact: there was a housing bubble that most at the Fed (including Bernanke) denied right upto the middle of 2007
Fact: Yellen, to her credit, has admitted multiple times over the years that low rates spur search for yield that blows bubbles
Fact: Bursting of the bubble led to unemployment for millions and U3 that went to 10%
what facts are you referring to?
EMichael -> Anonymous...
That FED rates caused the bubble.
to think this you have to ignore that a 400% Fed Rate increase from 2004 to 2005 had absolutely no effect on mortgage originations.
Then of course, you have to explain why 7 years at zero has not caused another housing bubble.
Correlation is not causation. Lack of correlation is proof of lack of causation.
pgl -> Anonymous...
"You are the guys who do not consider the counterfactual where higher rates would have prevented the housing bubble
in 2003-05 and that produced the great recession in the first place."
You are repeating the John B. Taylor line about interest rates being held "too low and too long". And guess what - most economists
have called Taylor's claim for the BS it really is. We should also note we never heard this BS when Taylor was part of the Bush
Administration. And do check - Greenspan and later Bernanke were raising interest rates well before any excess demand was generated
which is why inflation never took off.
So do keep repeating this intellectual garbage and we keep noting you are just a stupid troll.
Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century
By Anne Case and Angus Deaton
Midlife increases in suicides and drug poisonings have been previously noted. However, that these upward trends were persistent
and large enough to drive up all-cause midlife mortality has, to our knowledge, been overlooked. If the white mortality rate for
ages 45−54 had held at their 1998 value, 96,000 deaths would have been avoided from 1999–2013, 7,000 in 2013 alone. If it had
continued to decline at its previous (1979‒1998) rate, half a million deaths would have been avoided in the period 1999‒2013,
comparable to lives lost in the US AIDS epidemic through mid-2015. Concurrent declines in self-reported health, mental health,
and ability to work, increased reports of pain, and deteriorating measures of liver function all point to increasing midlife distress.
Abstract
This paper documents a marked increase in the all-cause mortality of middle-aged white non-Hispanic men and women in the United
States between 1999 and 2013. This change reversed decades of progress in mortality and was unique to the United States; no other
rich country saw a similar turnaround. The midlife mortality reversal was confined to white non-Hispanics; black non-Hispanics
and Hispanics at midlife, and those aged 65 and above in every racial and ethnic group, continued to see mortality rates fall.
This increase for whites was largely accounted for by increasing death rates from drug and alcohol poisonings, suicide, and chronic
liver diseases and cirrhosis. Although all education groups saw increases in mortality from suicide and poisonings, and an overall
increase in external cause mortality, those with less education saw the most marked increases. Rising midlife mortality rates
of white non-Hispanics were paralleled by increases in midlife morbidity. Self-reported declines in health, mental health, and
ability to conduct activities of daily living, and increases in chronic pain and inability to work, as well as clinically measured
deteriorations in liver function, all point to growing distress in this population. We comment on potential economic causes and
consequences of this deterioration.
ilsm -> Sarah...
Murka is different. Noni's plan would work if it were opportune for the slavocracy and the Kochs and ARAMCO don't lose any
"growth".
Maybe cost plus climate repair contracts to shipyards fumbling through useless nuclear powered behemoths for war plans made
in 1942.
Someone gotta make big money plundering for the public good, in Murka!
CSP said...
The answers to our malaise seem readily apparent to me, and I'm a southern-born white male working in a small, struggling Georgia
town.
1. Kill the national war machine
2. Kill the national Wall Street financial fraud machine
3. Get out-of-control mega corporations under control
4. Return savings to Main Street (see #1, #2 and #3)
5. Provide national, universal health insurance to everyone as a right
6. Provide free education to everyone, as much as their academic abilities can earn them
7. Strengthen social security and lower the retirement age to clear the current chronic underemployment of young people
It seems to me that these seven steps would free the American people to pursue their dreams, not the dreams of Washington or
Wall Street. Unfortunately, it is readily apparent that true freedom and real individual empowerment are the last things our leaders
desire. Shame on them and shame on everyone who helps to make it so.
DeDude -> CSP...
You are right. Problem is that most southern-born white males working in a small, struggling Georgia town would rather die
than voting for the one candidate who might institute those changes - Bernie Sanders.
The people who are beginning to realize that the american dream is a mirage, are the same people who vote for GOP candidates
who want to give even more to the plutocrats.
kthomas said...
The kids in Seattle had it right when WTO showed up.
Why is anyone suprised by all this?
We exported out jobs. First all the manufacturing. Now all of the Service jobs.
But hey...we helped millions in China and India get out of poverty, only to put outselves into it.
America was sold to highest bidder a long long time ago. A Ken Melvin put it, the chickens came home to roost in 2000.
sanjait -> kthomas...
So you think the problem with America is that we lost our low skilled manufacturing and call center tech support jobs?
I can sort of see why people assume that "we exported out jobs" is the reason for stagnant incomes in the U.S., but it's still
tiresome, because it's still just wrong.
Manufacturing employment crashed in the US mostly because it has been declining globally. The world economy is less material
based than ever, and machines do more of the work making stuff.
And while some services can be outsourced, the vast majority can't. Period.
Inequality has been rising globally, almost regardless of trade practices. The U.S. has one of the more closed economies in
the developed world, so if globalization were the cause, we'd be the most insulated. But we aren't, which should be a pretty good
indication that globalization isn't the cause.
cm -> sanjait...
Yes, the loss of "low skilled" jobs is still a loss of jobs. Many people work in "low skilled" jobs because there are not enough
"higher skill" jobs to go around, as most work demanded is not of the most fancy type.
We have heard this now for a few decades, that "low skilled" jobs lost will be replaced with "high skill" (and better paid)
jobs, and the evidence is somewhat lacking. There has been growth in higher skill jobs in absolute terms, but when you adjust
by population growth, it is flat or declining.
When people hypothetically or actually get the "higher skills" recommended to them, into what higher skill jobs are they to
move?
I have known a number of anecdotes of people with degrees or who held "skilled" jobs that were forced by circumstances to take
commodity jobs or jobs at lower pay grades or "skill levels" due to aggregate loss of "higher skill" jobs or age discrimination,
or had to go from employment to temp jobs.
And it is not true that only "lower skill" jobs are outsourced. Initially, yes, as "higher skills" obviously don't exist yet
in the outsourcing region. But that doesn't last long, especially if the outsourcers expend resources to train and grow the remote
skill base, at the expense of the domestic workforce which is expected to already have experience (which has worked for a while
due to workforce overhangs from previous industry "restructuring").
likbez -> sanjait...
"Inequality has been rising globally, almost regardless of trade practices."
It is not some unstoppable global trend. This is neoliberal oligarchy coup d'état. Or as it often called "a quite coup".
sanjait -> cm...
"Yes, the loss of "low skilled" jobs is still a loss of jobs. Many people work in "low skilled" jobs because there
are not enough "higher skill" jobs to go around, as most work demanded is not of the most fancy type.
We have heard this now for a few decades, that "low skilled" jobs lost will be replaced with "high skill" (and better
paid) jobs, and the evidence is somewhat lacking. "
And that is *exactly my point.*
The lack of wage growth isn't isolated to low skilled domains. It's weak across the board.
What does that tell us?
It tells us that offshoring of low skilled jobs isn't the problem.
"And it is not true that only "lower skill" jobs are outsourced. Initially, yes, as "higher skills" obviously don't exist
yet in the outsourcing region."
You could make this argument, but I think (judging by your own hedging) you know this isn't the case. Offshoring of higher
skilled jobs does happen but it's a marginal factor in reality. You hypothesize that it may someday become a bigger factor ...
but just notice that we've had stagnant wages now for a few decades.
My point is that offshoring IS NOT THE CAUSE of stagnating wages. I'd argue that globalization is a force that can't really
be stopped by national policy anyway, but even if you think it could, it's important to realize IT WOULD DO ALMOST NOTHING to
alleviate inequality.
cm -> sanjait...
I was responding to your point:
"So you think the problem with America is that we lost our low skilled manufacturing and call center tech support jobs?"
With the follow-on:
"I can sort of see why people assume that "we exported out jobs" is the reason for stagnant incomes in the U.S., but
it's still tiresome, because it's still just wrong."
Labor markets are very sensitive to marginal effects. If let's say "normal" or "heightened" turnover is 10% p.a. spread out
over the year, then the continued availability (or not) of around 1% vacancies (for the respective skill sets etc.) each month
makes a huge difference. There was the argument that the #1 factor is automation and process restructuring, and offshoring is
trailing somewhere behind that in job destruction volume.
I didn't research it in detail because I have no reason to doubt it. But it is a compounded effect - every percentage point
in open positions (and *better* open positions - few people are looking to take a pay cut) makes a big difference. If let's say
the automation losses are replaced with other jobs, offshoring will tip the scale. Due to aggregate effects one cannot say what
is the "extra" like with who is causing congestion on a backed up road (basically everybody, not the first or last person to join).
"Manufacturing employment crashed in the US mostly because it has been declining globally. The world economy is less
material based than ever, and machines do more of the work making stuff."
Are you kidding me? The world economy is less material based? OK maybe 20 years after the paperless office we are finally printing
less, but just because the material turnover, waste, and environmental pollution is not in your face (because of offshoring!),
it doesn't mean less stuff is produced or material consumed. If anything, it is market saturation and aggregate demand limitations
that lead to lower material and energy consumption (or lower growth rates).
In the aftermath of the financial crisis, several nations (US and Germany among others) had programs to promote new car sales
(cash for clunkers etc.) that were based on the idea that people can get credit for their old car, but its engine had to be destroyed
and made unrepairable so it cannot enter the used car market and defeat the purpose of the program. I assume the clunkers were
then responsibly and sustainably recycled.
cm -> sanjait...
"The lack of wage growth isn't isolated to low skilled domains. It's weak across the board.
What does that tell us?
It tells us taht offshoring of low skilled jobs isn't the problem."
This doesn't follow. First of all, whether a job can or is offshored has little to do with whether it is "low skilled"
but more with whether the workflow around the job can be organized in such a way that the job can be offshore. This is less a
matter of "skill level" and more volume and immediacy of interaction with adjacent job functions, or movement of material across
distances. Also consider that aside from time zone differences (which are of course a big deal between e.g. US and Europe/Asia),
there is not much difference whether a job is performed in another country or in a different domestic region, or perhaps just
"working from home" 1 mile from the office, for office-type jobs. Of course the other caveat is whether the person can physically
attend meetings with little fuss and expense - so remote management/coordination work is naturally not a big thing.
The reason wages are stuck is that aggregate jobs are not growing, relative to workforce supply. When the boomers
retire for real in another 5-10 years, that may change. OTOH several tech companies I know have periodic programs where they offer
workers over 55 or so packages to leave the company, so they cannot really hurt for talent, though they keep complaining and are
busy bringing in young(er) people on work visa. Free agents, it depends on the company. Some companies hire NCGs, but they also
"buy out" older workers.
cm -> cm...
Caveat: Based on what I see (outside sectors with strong/early growth), domestic hiring of NCGs/"fresh blood" falls in two
categories:
Location bound jobs (sales, marketing, legal, HR, administration, ..., also functions attached to those or otherwise preferring
"cultural affinity") - which are largely staffed with locals, also foreigners (visa as well as free agent (green card/citizen))
"Technical functions" and "technical" back office (i.e. little or no customer contact) - predominantly foreigners on visa
(e.g. graduates of US colleges), though some "free agent" hiring may happen depending on circumstances
Then there is also the gender split - "technical/engineering" jobs are overweighed in men, except technical jobs in traditionally
"non-technical/non-product" departments which have a higher share of women.
All this is of course a matter of top-down hiring preferences, as generally everything is either controlled top-down or tacitly
allowed to happen by selective non-interference.
cm -> sanjait...
"You could make this argument, but I think (judging by your own hedging) you know this isn't the case. Offshoring of
higher skilled jobs does happen but it's a marginal factor in reality. You hypothesize that it may someday become a bigger
factor ... but just notice that we've had stagnant wages now for a few decades."
I've written a lot of text so far but didn't address all points ...
My "hedging" is retrospective. I don't hypothesize what may eventually happen but it is happening here and now. I don't presume
to present a representative picture, but in my sphere of experience/observation (mostly a subset of computer software), offshoring
of *knowledge work* started in the mid to late 90's (and that's not the earliest it started in general - of course a lot of the
early offshoring in the 80's was market/language specific customization, e.g. US tech in Europe etc., and more "local culture
expertise" and not offshoring proper). In the late 90's and early 2000's, offshoring was overshadowed by the Y2K/dotcom booms,
so that phase didn't get high visibility (among the people "affected" it sure did). Also the internet was not yet ubiquitous -
broadband existed only at the corporate level.
15-20 years ago it was testing and "low level" programming, perhaps self contained limited-complexity functions or modules
written to fairly rigid specifications, or troubleshooting and bug fixes implemented here or there.
Then 10-15 years ago it advanced to offshore product maintenance, following up on QA issues, small development projects,
or assisting/supporting roles in "real" projects (either conducted offshore or people visiting the domestic offices for weeks
to months).
This went on in parallel with domestic visa workers from the first 15-20 years ago wave either being encouraged or themselves
expressing a desire to go back home (personal, career, family reasons etc.) and "spread the knowledge" and advancing into technical/organization
management roles.
Then 5-10 years ago with clearly grown offshore skills (my theory is that people everywhere are cut from the same cloth,
and we are now at 10+ years industry experience in this narrative), the offshore sites started taking on ownership of product
components, while all the "previous" functions of testing, R&D support, tech pub (which I didn't mention earlier), etc. remained
and evolved further. Also IT (though IT support is more timezone bound and is thus present in all time zones).
Since then there has been little change, it is pretty much a steady state.
BTW the primary offshore location is India, probably in good part because of good to excellent English language skills,
and India's investment in STEM education and industry (especially software/services and this is even a public stereotype, but
for a reason).
Syaloch -> sanjait...
Whether low skilled jobs were eliminated due to offshoring or automation doesn't really matter. What matters is that the jobs
disappeared, replaced by a small number of higher skill jobs paying comparable wages plus a large number of low skill jobs offering
lower wages.
The aggregate effect was stagnation and even decline in living standards. Plus any new jobs were not necessarily produced in
the same geographic region as those that were lost, leading to concentration of unemployment and despair.
sanjait -> Syaloch...
"Whether low skilled jobs were eliminated due to offshoring or automation doesn't really matter. "
Well, actually it does matter, because we have a whole lot of people (in both political parties) who think the way to fight
inequality is to try to reverse globalization.
If they are incorrect, it matters, because they should be applying their votes and their energy to more effective solutions,
and rejecting the proposed solutions of both the well-meaning advocates and the outright demagogues who think restricting trade
is some kind of answer.
Syaloch -> sanjait...
I meant it doesn't matter in terms of the despair felt by those affected. All that matters to those affected is that they have
been obsoleted without either economic or social support to help them.
However, in terms of addressing this problem economically it really doesn't matter that much either. Offshoring is effectively
a low-tech form of automation. If companies can't lower labor costs by using cheaper offshore labor they'll find ways to either
drive down domestic wages or to use less labor. For the unskilled laborer the end result is the same.
Syaloch -> Syaloch...
See the thought experiment I posted on the links thread, and then add the following:
Suppose the investigative journalist discovered instead that Freedonia itself is a sham, and that rather than being imported
from overseas, the clothing was actually coming from an automated factory straight out of Vonnegut's "Player Piano" that was hidden
in a remote domestic location. Would the people who were demanding limits on Freedonian exports now say, "Oh well, I guess that's
OK" simply because the factory was located within the US?
Dan Kervick -> kthomas...
I enjoyed listening to this talk by Fredrick Reinfeldt at the LSE:
Reinfeldt is a center-right politicians and former Swedish Prime Minister. OF course, what counts as center-right in Sweden
seems very different from what counts as center-right in the US.
Perhaps there is some kind of basis here for some bipartisan progress on jobs and full employment.
William said...
I'm sure this isn't caused by any single factor, but has anyone seriously investigated a link between this phenomena and the
military?
Veterans probably aren't a large enough cohort to explain the effect in full, but white people from the south are the most
likely group to become soldiers, and veterans are the most likely group to have alcohol/drug abuse and suicide problems.
This would also be evidence why we aren't seeing it in other countries, no one else has anywhere near the number of vets we
have.
cm -> William...
Vets are surely part of the aggregate problem of lack of career/economic prospects, in fact a lot of people join(ed) the military
because of a lack of other jobs to begin with. But as the lack of prospects is aggregate it affects everybody.
" At this point you probably expect me to offer a solution. But while universal health care, higher minimum wages, aid to
education, and so on would do a lot to help Americans in trouble, I'm not sure whether they're enough to cure existential despair."
UNOINIZED and (therefore shall we say) politicized: you are in control of your narrative -- win or lose. Can it get any more hopeful
than that? And you will probably win.
Winning being defined as labor eeking out EQUALLY emotionally satisfying/dissatisfying market results -- EQUAL that is with
the satisfaction of ownership and the consumer. That's what happens when all three interface in the market -- labor interfacing
indirectly through collective bargaining.
(Labor's monopoly neutralizes ownership's monopsony -- the consumers' willingness to pay providing the checks and balances
on labor's monopoly.)
If you feel you've done well RELATIVE to the standards of your own economic era you will feel you've done well SUBJECTIVELY.
For instance, my generation of (American born) cab drivers earned about $750 for a 60 hour (grueling) work week up to the early
80s. With multiples strip-offs I won't detail here (will on request -- diff for diff cities) that has been reduced to about $500
a week (at best I suspect!) I believe and that is just not enough to get guys like me out there for that grueling work.
Let's take the minimum wage comparison from peak-to-peak instead of from peak-to-trough: $11 and hour in 1968 -- at HALF TODAY'S
per capita income (economic output) -- to $7.25 today. How many American born workers are going to show up for $7.25 in the day
of SUVs and "up-to-date kitchens" all around us. $8.75 was perfectly enticing for Americans working in 1956 ($8.75 thanks to the
"Master of the Senate"). The recent raise to $10 is not good enough for Chicago's 100,000 gang members (out of my estimate 200,000
gang age minority males). Can hustle that much on the street w/o the SUBJECTIVE feeling of wage slavery.
Ditto hiring result for two-tier supermarket contracts after Walmart undercut the unions.
Without effective unions (centralized bargaining is the gold standard: only thing that fends off Walmart type contract muscling.
Done that way since 1966 with the Teamsters Union's National Master Freight Agreement; the long practiced law or custom from continental
Europe to French Canada to Argentina to Indonesia.
It occurred to me this morning that if the quintessential example of centralized bargaining Germany has 25% or our population
and produces 200% more cars than we do, then, Germans produces 8X as many cars per capita than we do!
And thoroughly union organized Germans feel very much in control of the narrative of their lives.
No longer thoroughly, with recent labor market reforms the door has likewise been blown open to contingent workforces, staffing
agencies, and similar forms of (perma) temp work. And moving work to nations with lower labor standards (e.g. "peripheral" Europe,
less so outside Europe) has been going on for decades, for parts, subassembly, and even final assembly.
Very rough figures: half a million Chicago employees may make less than $800 a week -- almost everybody should earn $800
...
... putative minimum wage? -- might allow some slippage in high labor businesses like fast food restaurants; 33% labor costs!
-- sort of like the Teamsters will allow exceptions when needed from Master agreements if you open up your books, they need your
working business too, consumer ultimately sets limits.
Average raise of $200 a week -- $10,000 a year equals $5 billion shift in income -- out of a $170 billion Chicago GDP (1% of
national) -- not too shabby to bring an end to gang wars and Despair American Style.
Just takes making union busting a felony LIKE EVERY OTHER FORM OF UNFAIR MARKET MUSCLING (even taking a movie in the movies).
The body of laws are there -- the issues presumably settled -- the enforcement just needs "dentures."
Union busting is generally (?) understood as direct interference with the formation and operation of unions or their members.
It is probably more common that employers are allowed to just go around the unions - "right to work", subcontracting non-union
shops or temp/staffing agencies, etc.
Why would people join a union and pay dues when the union is largely impotent to deliver, when there are always still enough
desperate people who will (have to) take jobs outside the union system? Employers don't have to bring in scabs when they can legally
go through "unencumbered" subcontractors inside or outside the jurisdiction.
cm -> cm...
It comes down to the collective action problem. You can organize people who form a "community" (workers in the same business
site, or similar aggregates more or less subject to Dunbar's number or with a strong tribal/ethnic/otherwise cohesion narrative).
Beyond that, if you can get a soapbox in the regional press, etc., otherwise good luck. It probably sounds defeatist but I don't
have a solution.
When the union management is outed for corruption or other abuses or questioable practices (e.g. itself employing temps or
subcontractors), it doesn't help.
Syaloch said...
There was a good discussion of this on last Friday's Real Time with Bill Maher.
Surprisingly, I pretty much agree with David Frum's analysis -- and Maher's comment that Trump, with his recent book, "Crippled
America", has his finger on the pulse of this segment of the population. Essentially what we're seeing is the impact of economic
stagnation upon a culture whose reserves of social capital have been depleted, as described in Robert Putnam's "Bowling Alone".
When the going gets tough it's a lot harder to manage without a sense of identity and purpose, and without the support of family,
friends, churches, and communities. Facebook "friends" are no substitute for the real thing.
Peter K. said...
Jared Bernsetin:
"...since the late 1970s, we've been at full employment only 30 percent of the time (see the data note below for an explanation
of how this is measured). For the three decades before that, the job market was at full employment 70 percent of the time."
We need better macro (monetary, fiscal, trade) policy.
Maybe middle-aged blacks and hispanics have better attitudes and health since they made it through a tough youth, have more
realistic expectations and race relations are better than the bad old days even if they are far from perfect. The United States
is becoming more multicultural.
Suicide, once thought to be associated with troubled teens and the elderly, is quickly becoming an age-blind statistic.
Middle aged Americans are turning to suicide in alarming numbers. The reasons include easily accessible prescription painkillers,
the mortgage crisis and most importantly the challenge of a troubled economy. The Center for Disease Control and Prevention claims
suicide rates now top the number of deaths due to automobile accidents.
The suicide rate for both younger and older Americans remains virtually unchanged, however, the rate has spiked for those
in middle age (35 to 64 years old) with a 28 percent increase (link is external) from 1999 to 2010. The rate for whites in
middle-age jumped an alarming 40 percent during the same time frame. According to the CDC, there were more than 38,000 suicides
(link is external) in 2010 making it the tenth leading cause of death in America overall (third leading cause from age 15-24).
The US 2010 Final Data quantifies the US statistics for suicide by race, sex and age. Interestingly, African-American suicides
have declined and are considerably lower than whites. Reasons are thought to include better coping skills when negative things
occur as well as different cultural norms with respect to taking your own life. Also, Blacks (and Hispanics) tend to have stronger
family support, community support and church support to carry them through these rough times.
While money woes definitely contribute to stress and poor mental health, it can be devastating to those already prone to depression
-- and depression is indeed still the number one risk factor for suicide. A person with no hope and nowhere to go, can now easily
turn to their prescription painkiller and overdose, bringing the pain, stress and worry to an end. In fact, prescription painkillers
were the third leading cause of suicide (and rising rapidly) for middle aged Americans in 2010 (guns are still number 1). ...
cm -> Fred C. Dobbs...
When few people kill themselves "on purpose" or die from self-inflicted but probably "unintended" harms (e.g. organ failure
or accidental death caused by substance abuse), it can be shrugged off as problems related to the individual (more elaboration
possible but not necessary).
When it becomes a statistically significant phenomenon (above-noise percentage of total population or demographically identifiable
groups), then one has to ask questions about social causes. My first question would be, "what made life suck for those people"?
What specific instrument they used to kill themselves would be my second question (it may be the first question for people who
are charged with implementing counter measures but not necessarily fixing the causes).
Since about the financial crisis (I'm not sure about causation or coincidence - not accidental coincidence BTW but causation
by the same underlying causes), there has been a disturbing pattern of high school students throwing themselves in front of local
trains. At that age, drinking or drugging oneself to death is apparently not the first "choice". Performance pressure *related
to* (not just "and") a lack of convincing career/life prospects has/have been suspected or named as a cause. I don't think teenagers
suddenly started to jump in front of trains that have run the same rail line for decades because of the "usual" and centuries
to millennia old teenage romantic relationship issues.
"... If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which unions have codified returns to experience into the salary structure, might become such a fixation. ..."
The Despair of Learning That Experience No Longer Matters
April 10, 2017
.....................
The arguments about Case and Deaton's work have been an echo of the one that consumed so much of the primary campaign, and
then the general election, and which is still unresolved: whether the fury of Donald Trump's supporters came from cultural and
racial grievance or from economic plight. Case and Deaton's scholarship does not settle the question. As they write, more than
once, "more work is needed."
But part of what Case and Deaton offer in their new paper is an emotional logic to an economic argument.
If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly
older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It
suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which
unions have codified returns to experience into the salary structure, might become such a fixation.
Whatever comes from the deliberations over Case and Deaton's statistics, there is within their numbers an especially interesting
story.
The key to the success of neoliberal was a bunch on bought intellectual prostitutes like Milton Friedman and the drive to
occupy economic departments of the the universities using money from the financial elite. which along with think tank continued
mercenary army of neoliberalism who fought and win the battle with weakened New Del capitalism supporters. After that
neoliberalism was from those departments like the centers of infection via indoctrination of each new generation of students.
Which is a classic mixture of Bolsheviks methods and Trotskyite theory adapted tot he need of financial oligarchy.
Essentially we see the tragedy of Lysenkoism replayed in the USA. When false theory supported by financial oligarchy and then
state forcefully suppressed all other economic thought and became the only politically correct theory in the USA and Western
Europe.
Notable quotes:
"... The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to the empowerment of workers and the regulation of banks and other major industries. ..."
"... Neoliberalism's premise is that free markets can regulate themselves; that government is inherently incompetent, captive to special interests, and an intrusion on the efficiency of the market; that in distributive terms, market outcomes are basically deserved; and that redistribution creates perverse incentives by punishing the economy's winners and rewarding its losers. So government should get out of the market's way. ..."
"... Now, after nearly half a century, the verdict is in. Virtually every one of these policies has failed, even on their own terms. ..."
"... Economic power has resulted in feedback loops of political power, in which elites make rules that bolster further concentration. ..."
"... The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This is a story of power using theory. The mixed economy was undone by economic elites, who revised rules for their own benefit. They invested heavily in friendly theorists to bless this shift as sound and necessary economics, and friendly politicians to put those theories into practice. ..."
"... The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact do not regulate themselves. Managed markets turn out to be more equitable and more efficient. ..."
"... The British political economist Colin Crouch captured this anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy, but succeeded superbly as power politics for economic elites. ..."
"... The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As government ceased to buffer market forces, daily life has become more of a struggle for ordinary people. ..."
"... After the Berlin Wall came down in 1989, ours was widely billed as an era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation after nation, with echoes of the 1930s. ..."
"... As the great political historian Karl Polanyi warned, when markets overwhelm society, ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with dictators, undermining the neoliberal premise of capitalism and democracy as complements. ..."
"... Classically, the premise of a "free market" is that government simply gets out of the way. This is nonsensical, since all markets are creatures of rules, most fundamentally rules defining property, but also rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In Polanyi's words, "laissez-faire was planned." ..."
"... Around the same time, the term neoconservative was used as a self-description by former liberals who embraced conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were neoliberals in economics. ..."
"... Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife, Bradley, and other far-right foundations to promote such variants of free-market theory as law and economics, public choice, rational choice, cost-benefit analysis, maximize-shareholder-value, and kindred schools of thought. These theories colonized several academic disciplines. All were variations on the claim that markets worked and that government should get out of the way. ..."
"... Market failure was dismissed as a rare special case; government failure was said to be ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in every major case where neoliberal theory generated policy, the result was political success and economic failure. ..."
"... For example, supply-side economics became the justification for tax cuts, on the premise that taxes punished enterprise. ..."
"... Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if government just got out of the way, market forces would remain more competitive because monopoly pricing would invite innovation and new entrants to the market. In practice, industry after industry became more heavily concentrated. ..."
"... Human capital theory, another variant of neoliberal application of markets to partly social questions, justified deregulating labor markets and crushing labor unions. Unions supposedly used their power to get workers paid more than their market worth. Likewise minimum wage laws. But the era of depressed wages has actually seen a decline in rates of productivity growth ..."
"... Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from the only one ..."
"... Air travel has been a poster child for advocates of deregulation, but the actual record is mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline, often at the cost of worker pay and pension funds. ..."
"... Ticket prices have declined on average over the past two decades, but the traveling public suffers from a crazy quilt of fares, declining service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of having to change plans. ..."
"... A similar example is the privatization of transportation services such as highways and even parking meters. In several Midwestern states, toll roads have been sold to private vendors. The governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying higher tolls often for decades. Investment bankers who broker the deal also take their cut. Some of the money does go into highway improvements, but that could have been done more efficiently in the traditional way via direct public ownership and competitive bidding. ..."
"... The Affordable Care Act is a form of voucher. But the regulated private insurance markets in the ACA have not fully lived up to their promise, in part because of the extensive market power retained by private insurers and in part because the right has relentlessly sought to sabotage the program -- another political feedback loop. The sponsors assumed that competition would lower costs and increase consumer choice. But in too many counties, there are three or fewer competing plans, and in some cases just one. ..."
"... In practice, this degenerates into an infinite regress of regulator versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with the industry doing end runs to Congress to further rig the rules. Straight-ahead public insurance such as Medicare is generally far more efficient. ..."
"... Several forms of deregulation -- of airlines, trucking, and electric power -- began not under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic presidents, as much as Republicans, promoted trade deals that undermined social standards. Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a choke point under Barack Obama than under George W. Bush. ..."
"... Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust, and then IMF pile-on. Greece is still suffering the impact. ..."
"... In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and insulated from foreign speculative capital. They developed world-class industries as state-led cartels that favored domestic production and supply. East Asia got into trouble only when it followed IMF dictates to throw open capital markets, and in the aftermath they recovered by closing those markets and assembling war chests of hard currency so that they'd never again have to go begging to the IMF ..."
"... The basic argument of neoliberalism can fit on a bumper sticker. Markets work; governments don't . If you want to embellish that story, there are two corollaries: Markets embody human freedom. And with markets, people basically get what they deserve; to alter market outcomes is to spoil the poor and punish the productive. That conclusion logically flows from the premise that markets are efficient. Milton Friedman became rich, famous, and influential by teasing out the several implications of these simple premises. ..."
"... The failed neoliberal experiment also makes the case not just for better-regulated capitalism but for direct public alternatives as well. Banking, done properly, especially the provision of mortgage finance, is close to a public utility. Much of it could be public. ..."
The
invisible hand is more like a thumb on the scale for the world's elites. That's why market
fundamentalism has been unmasked as bogus economics but keeps winning politically.This article appears in the Summer 2019 issue of The American Prospect magazine.
Subscribe here .
Since the late 1970s, we've had a grand experiment to test the claim that free markets
really do work best. This resurrection occurred despite the practical failure of laissez-faire
in the 1930s, the resulting humiliation of free-market theory, and the contrasting success of
managed capitalism during the three-decade postwar boom.
Yet when growth faltered in the 1970s, libertarian economic theory got another turn at bat.
This revival proved extremely convenient for the conservatives who came to power in the 1980s.
The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every
aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to
the empowerment of workers and the regulation of banks and other major industries.
Neoliberalism's premise is that free markets can regulate themselves; that government is
inherently incompetent, captive to special interests, and an intrusion on the efficiency of the
market; that in distributive terms, market outcomes are basically deserved; and that
redistribution creates perverse incentives by punishing the economy's winners and rewarding its
losers. So government should get out of the market's way.
By the 1990s, even moderate liberals had been converted to the belief that social objectives
can be achieved by harnessing the power of markets. Intermittent periods of governance by
Democratic presidents slowed but did not reverse the slide to neoliberal policy and doctrine.
The corporate wing of the Democratic Party approved.
Now, after nearly half a century, the verdict is in. Virtually every one of these policies
has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut,
and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth
is slower and more chaotic than during the era of managed capitalism. Deregulation has produced
not salutary competition, but market concentration. Economic power has resulted in feedback
loops of political power, in which elites make rules that bolster further concentration.
The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This
is a story of power using theory. The mixed economy was undone by economic elites, who revised
rules for their own benefit. They invested heavily in friendly theorists to bless this shift as
sound and necessary economics, and friendly politicians to put those theories into
practice.
Recent years have seen two spectacular cases of market mispricing with devastating
consequences: the near-depression of 2008 and irreversible climate change. The economic
collapse of 2008 was the result of the deregulation of finance. It cost the real U.S. economy
upwards of $15 trillion (and vastly more globally), depending on how you count, far more than
any conceivable efficiency gain that might be credited to financial innovation. Free-market
theory presumes that innovation is necessarily benign. But much of the financial engineering of
the deregulatory era was self-serving, opaque, and corrupt -- the opposite of an efficient and
transparent market.
The existential threat of global climate change reflects the incompetence of markets to
accurately price carbon and the escalating costs of pollution. The British economist Nicholas
Stern has aptly termed the worsening climate catastrophe history's greatest case of market
failure. Here again, this is not just the result of failed theory. The entrenched political
power of extractive industries and their political allies influences the rules and the market
price of carbon. This is less an invisible hand than a thumb on the scale. The premise of
efficient markets provides useful cover.
The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact
do not regulate themselves. Managed markets turn out to be more equitable and more
efficient. Yet the theory and practical influence of neoliberalism marches splendidly on,
because it is so useful to society's most powerful people -- as a scholarly veneer to what
would otherwise be a raw power grab. The British political economist Colin Crouch captured this
anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did
neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy,
but succeeded superbly as power politics for economic elites.
The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As
government ceased to buffer market forces, daily life has become more of a struggle for
ordinary people. The elements of a decent middle-class life are elusive -- reliable jobs and
careers, adequate pensions, secure medical care, affordable housing, and college that doesn't
require a lifetime of debt. Meanwhile, life has become ever sweeter for economic elites, whose
income and wealth have pulled away and whose loyalty to place, neighbor, and nation has become
more contingent and less reliable.
Large numbers of people, in turn, have given up on the promise of affirmative government,
and on democracy itself. After the Berlin Wall came down in 1989, ours was widely billed as an
era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in
a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation
after nation, with echoes of the 1930s.
As the great political historian Karl Polanyi warned, when markets overwhelm society,
ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with
dictators, undermining the neoliberal premise of capitalism and democracy as complements. Several authoritarian thugs,
playing on tribal nationalism as the antidote to capitalist cosmopolitanism, are surprisingly popular.
It's also important to appreciate that neoliberalism is not laissez-faire. Classically, the
premise of a "free market" is that government simply gets out of the way. This is nonsensical,
since all markets are creatures of rules, most fundamentally rules defining property, but also
rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and
copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In
Polanyi's words, "laissez-faire was planned."
The political question is who gets to make the rules, and for whose benefit. The
neoliberalism of Friedrich Hayek and Milton Friedman invoked free markets, but in practice the
neoliberal regime has promoted rules created by and for private owners of capital, to keep
democratic government from asserting rules of fair competition or countervailing social
interests. The regime has rules protecting pharmaceutical giants from the right of consumers to
import prescription drugs or to benefit from generics. The rules of competition and
intellectual property generally have been tilted to protect incumbents. Rules of bankruptcy
have been tilted in favor of creditors. Deceptive mortgages require elaborate rules, written by
the financial sector and then enforced by government. Patent rules have allowed agribusiness
and giant chemical companies like Monsanto to take over much of agriculture -- the opposite of
open markets. Industry has invented rules requiring employees and consumers to submit to
binding arbitration and to relinquish a range of statutory and common-law
rights.
Neoliberalism as Theory, Policy, and Power
It's worth taking a moment to unpack the term "neoliberalism." The coinage can be confusing
to American ears because the "liberal" part refers not to the word's ordinary American usage,
meaning moderately left-of-center, but to classical economic liberalism otherwise known as
free-market economics. The "neo" part refers to the reassertion of the claim that the
laissez-faire model of the economy was basically correct after all.
Few proponents of these views embraced the term neoliberal . Mostly, they called
themselves free-market conservatives. "Neoliberal" was a coinage used mainly by their critics,
sometimes as a neutral descriptive term, sometimes as an epithet. The use became widespread in
the era of Margaret Thatcher and Ronald Reagan.
To add to the confusion, a different and partly overlapping usage was advanced in the 1970s
by the group around the Washington Monthly magazine. They used "neoliberal" to mean a
new, less statist form of American liberalism. Around the same time, the term
neoconservative was used as a self-description by former liberals who embraced
conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were
neoliberals in economics.
Beginning in the 1970s, resurrected free-market theory was interwoven with both conservative
politics and significant investments in the production of theorists and policy intellectuals.
This occurred not just in well-known conservative think tanks such as the American Enterprise
Institute, Heritage, Cato, and the Manhattan Institute, but through more insidious investments
in academia. Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife,
Bradley, and other far-right foundations to promote such variants of free-market theory as law
and economics, public choice, rational choice, cost-benefit analysis,
maximize-shareholder-value, and kindred schools of thought. These theories colonized several
academic disciplines. All were variations on the claim that markets worked and that government
should get out of the way.
Each of these bodies of sub-theory relied upon its own variant of neoliberal ideology. An
intensified version of the theory of comparative advantage was used not just to cut tariffs but
to use globalization as all-purpose deregulation. The theory of maximizing shareholder value
was deployed to undermine the entire range of financial regulation and workers' rights.
Cost-benefit analysis, emphasizing costs and discounting benefits, was used to discredit a good
deal of health, safety, and environmental regulation. Public choice theory, associated with the
economist James Buchanan and an entire ensuing school of economics and political science, was
used to impeach democracy itself, on the premise that policies were hopelessly afflicted by
"rent-seekers" and "free-riders."
Market failure was dismissed as a rare special case; government failure was said to be
ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in
every major case where neoliberal theory generated policy, the result was political success and
economic failure.
For example, supply-side economics became the justification for tax cuts, on the premise
that taxes punished enterprise. Supposedly, if taxes were cut, especially taxes on capital and
on income from capital, the resulting spur to economic activity would be so potent that
deficits would be far less than predicted by "static" economic projections, and perhaps even
pay for themselves. There have been six rounds of this experiment, from the tax cuts sponsored
by Jimmy Carter in 1978 to the immense 2017 Tax Cuts and Jobs Act signed by Donald Trump. In
every case some economic stimulus did result, mainly from the Keynesian jolt to demand, but in
every case deficits increased significantly. Conservatives simply stopped caring about
deficits. The tax cuts were often inefficient as well as inequitable, since the loopholes
steered investment to tax-favored uses rather than the most economically logical ones. Dozens
of America's most profitable corporations paid no taxes.
Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened
competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if
government just got out of the way, market forces would remain more competitive because
monopoly pricing would invite innovation and new entrants to the market. In practice, industry
after industry became more heavily concentrated. Incumbents got in the habit of buying out
innovators or using their market power to crush them. This pattern is especially insidious in
the tech economy of platform monopolies, where giants that provide platforms, such as Google
and Amazon, use their market power and superior access to customer data to out-compete rivals
who use their platforms. Markets, once again, require rules beyond the benign competence of the
market actors themselves. Only democratic government can set equitable rules. And when
democracy falters, undemocratic governments in cahoots with corrupt private plutocrats will
make the rules.
Human capital theory, another variant of neoliberal application of markets to partly social
questions, justified deregulating labor markets and crushing labor unions. Unions supposedly
used their power to get workers paid more than their market worth. Likewise minimum wage laws.
But the era of depressed wages has actually seen a decline in rates of productivity growth.
Conversely, does any serious person think that the inflated pay of the financial moguls who
crashed the economy accurately reflects their contribution to economic activity? In the case of
hedge funds and private equity, the high incomes of fund sponsors are the result of transfers
of wealth and income from employees, other stakeholders, and operating companies to the fund
managers, not the fruits of more efficient management.
There is a broad literature discrediting this body of pseudo-scholarly work in great detail.
Much of neoliberalism represents the ever-reliable victory of assumption over evidence. Yet
neoliberal theory lived on because it was so convenient for elites, and because of the inertial
power of the intellectual capital that had been created. The well-funded neoliberal habitat has
provided comfortable careers for two generations of scholars and pseudo-scholars who migrate
between academia, think tanks, K Street, op-ed pages, government, Wall Street, and back again.
So even if the theory has been demolished both by scholarly rebuttal and by events, it thrives
in powerful institutions and among their political allies.
The Practical Failure of
Neoliberal Policies
Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from
the only one. Electricity deregulation on balance has increased monopoly power and raised costs
to consumers, but has failed to offer meaningful "shopping around" opportunities to bring down
prices. We have gone from regulated monopolies with predictable earnings, costs, wages, and
consumer protections to deregulated monopolies or oligopolies with substantial pricing power.
Since the Bell breakup, the telephone system tells a similar story of re-concentration,
dwindling competition, price-gouging, and union-bashing.
Air travel has been a poster child for advocates of deregulation, but the actual record is
mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline,
often at the cost of worker pay and pension funds.
Ticket prices have declined on average over
the past two decades, but the traveling public suffers from a crazy quilt of fares, declining
service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of
having to change plans. Studies have shown that fares actually declined at a faster rate in the
20 years before deregulation in 1978 than in the 20 years afterward, because the prime source
of greater efficiency in airline travel is the introduction of more fuel-efficient planes.
The
roller-coaster experience of airline profits and losses has reduced the capacity of airlines to
purchase more fuel-efficient aircraft, and the average age of the fleet keeps increasing. The
use of "fortress hubs" to defend market pricing power has reduced the percentage of nonstop
flights, the most efficient way to fly from one point to another.
Robert Bork's spurious arguments that antitrust enforcement hurt competition became the
basis for dismantling antitrust. Massive concentration resulted. Charles Tasnadi/AP Photo
In addition to deregulation, three prime areas of practical neoliberal policies are the use
of vouchers as "market-like" means to social goals, the privatization of public services, and
the use of tax subsides rather than direct outlays. In every case, government revenues are
involved, so this is far from a free market to begin with. But the premise is that market
disciplines can achieve public purposes more efficiently than direct public provision.
The evidence provides small comfort for these claims. One core problem is that the programs
invariably give too much to the for-profit middlemen at the expense of the intended
beneficiaries. A related problem is that the process of using vouchers and contracts invites
corruption. It is a different form of "rent-seeking" -- pursuit of monopoly profits -- than
that attributed to government by public choice theorists, but corruption nonetheless. Often,
direct public provision is far more transparent and accountable than a web of contractors.
A further problem is that in practice there is often far less competition than imagined,
because of oligopoly power, vendor lock-in, and vendor political influence. These experiments
in marketization to serve social goals do not operate in some Platonic policy laboratory, where
the only objective is true market efficiency yoked to the public good. They operate in the
grubby world of practical politics, where the vendors are closely allied with conservative
politicians whose purposes may be to discredit social transfers entirely, or to reward
corporate allies, or to benefit from kickbacks either directly or as campaign
contributions.
Privatized prisons are a case in point. A few large, scandal-ridden companies have gotten
most of the contracts, often through political influence. Far from bringing better quality and
management efficiency, they have profited by diverting operating funds and worsening conditions
that were already deplorable, and finding new ways to charge inmates higher fees for necessary
services such as phone calls. To the extent that money was actually saved, most of the savings
came from reducing the pay and professionalism of guards, increasing overcrowding, and
decreasing already inadequate budgets for food and medical care.
A similar example is the privatization of transportation services such as highways and even
parking meters. In several Midwestern states, toll roads have been sold to private vendors. The
governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying
higher tolls often for decades. Investment bankers who broker the deal also take their cut.
Some of the money does go into highway improvements, but that could have been done more
efficiently in the traditional way via direct public ownership and competitive bidding.
Housing vouchers substantially reward landlords who use the vouchers to fill empty houses
with poor people until the neighborhood gentrifies, at which point the owner is free to quit
the program and charge market rentals. Thus public funds are used to underwrite a privately
owned, quasi-social housing sector -- whose social character is only temporary. No permanent
social housing is produced despite the extensive public outlay. The companion use of tax
incentives to attract passive investment in affordable housing promotes economically
inefficient tax shelters, and shunts public funds into the pockets of the investors -- money
that might otherwise have gone directly to the housing.
The Affordable Care Act is a form of voucher. But the regulated private insurance markets in
the ACA have not fully lived up to their promise, in part because of the extensive market power
retained by private insurers and in part because the right has relentlessly sought to sabotage
the program -- another political feedback loop. The sponsors assumed that competition would
lower costs and increase consumer choice. But in too many counties, there are three or fewer
competing plans, and in some cases just one.
As more insurance plans and hospital systems become for-profit, massive investment goes into
such wasteful activities as manipulation of billing, "risk selection," and other gaming of the
rules. Our mixed-market system of health care requires massive regulation to work with
tolerable efficiency. In practice, this degenerates into an infinite regress of regulator
versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with
the industry doing end runs to Congress to further rig the rules. Straight-ahead public
insurance such as Medicare is generally far more efficient.
An extensive literature has demonstrated that for-profit voucher schools do no better and
often do worse than comparable public schools, and are vulnerable to multiple forms of gaming
and corruption. Proprietors of voucher schools are superb at finding ways of excluding costly
special-needs students, so that those costs are imposed on what remains of public schools; they
excel at gaming test results. While some voucher and charter schools, especially nonprofit
ones, sometimes improve on average school performance, so do many public schools. The record is
also muddied by the fact that many ostensibly nonprofit schools contract out management to
for-profit companies.
Tax preferences have long been used ostensibly to serve social goals. The Earned Income Tax
Credit is considered one of the more successful cases of using market-like measures -- in this
case a refundable tax credit -- to achieve the social goal of increasing worker take-home pay.
It has also been touted as the rare case of bipartisan collaboration. Liberals get more money
for workers. Conservatives get to reward the deserving poor, since the EITC is conditioned on
employment. Conservatives get a further ideological win, since the EITC is effectively a wage
subsidy from the government, but is experienced as a tax refund rather than a benefit of
government.
Recent research, however, shows that the EITC is primarily a subsidy of low-wage employers,
who are able to pay their workers a lot less than a market-clearing wage. In industries such as
nursing homes or warehouses, where many workers qualified for the EITC work side by side with
ones not eligible, the non-EITC workers get substandard wages. The existence of the EITC
depresses the level of the wages that have to come out of the employer's
pocket.
Neoliberalism's Influence on Liberals
As free-market theory resurged, many moderate liberals embraced these policies. In the
inflationary 1970s, regulation became a scapegoat that supposedly deterred salutary price
competition. Some, such as economist Alfred Kahn, President Carter's adviser on deregulation,
supported deregulation on what he saw as the merits. Other moderates supported neoliberal
policies opportunistically, to curry favor with powerful industries and donors. Market-like
policies were also embraced by liberals as a tactical way to find common ground with
conservatives.
Several forms of deregulation -- of airlines, trucking, and electric power -- began not
under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic
presidents, as much as Republicans, promoted trade deals that undermined social standards.
Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a
choke point under Barack Obama than under George W. Bush.
"Command and control" became an all-purpose pejorative for disparaging perfectly sensible
and efficient regulation. "Market-like" became a fashionable concept, not just on the
free-market right but on the moderate left. Cass Sunstein, who served as Obama's
anti-regulation czar,uses the example of "nudges" as a more market-like and hence superior
alternative to direct regulation, though with rare exceptions their impact is trivial.
Moreover, nudges only work in tandem with regulation.
There are indeed some interventionist policies that use market incentives to serve social
goals. But contrary to free-market theory, the market-like incentives first require substantial
regulation and are not a substitute for it. A good example is the Clean Air Act Amendments of
1990, which used tradable emission rights to cut the output of sulfur dioxide, the cause of
acid rain. This was supported by both the George H.W. Bush administration and by leading
Democrats. But before the trading regime could work, Congress first had to establish
permissible ceilings on sulfur dioxide output -- pure command and control.
There are many other instances, such as nutrition labeling, truth-in-lending, and disclosure
of EPA gas mileage results, where the market-like premise of a better-informed consumer
complements command regulation but is no substitute for it. Nearly all of the increase in fuel
efficiency, for example, is the result of command regulations that require auto fleets to hit a
gas mileage target. The fact that EPA gas mileage figures are prominently disclosed on new car
stickers may have modest influence, but motor fuels are so underpriced that car companies have
success selling gas-guzzlers despite the consumer labeling.
Image removed
Bill Clinton and his Treasury Secretary, Robert Rubin, were big promoters of financial deregulation.
Politically, whatever rationale there was for liberals to make common ground with
libertarians is now largely gone. The authors of the 2017 Tax Cuts and Jobs Act made no attempt
to meet Democrats partway; they excluded the opposition from the legislative process entirely.
This was opportunistic tax cutting for elites, pure and simple. The right today also abandoned
the quest for a middle ground on environmental policy, on anti-poverty policy, on health policy
-- on virtually everything. Neoliberal ideology did its historic job of weakening intellectual
and popular support for the proposition that affirmative government can better the lives of
citizens and that the Democratic Party is a reliable steward of that social compact. Since
Reagan, the right's embrace of the free market has evolved from partly principled idealism into
pure opportunism and obstruction.
Neoliberalism and Hyper-Globalism
The post-1990 rules of globalization, supported by conservatives and moderate liberals
alike, are the quintessence of neoliberalism. At Bretton Woods in 1944, the use of fixed
exchange rates and controls on speculative private capital, plus the creation of the IMFand
World Bank, were intended to allow member countries to practice national forms of managed
capitalism, insulated from the destructive and deflationary influences of short-term
speculative private capital flows. As doctrine and power shifted in the 1970s, the IMF, the
World Bank, and later the WTO, which replaced the old GATT, mutated into their ideological
opposite. Rather than instruments of support for mixed national economies, they became
enforcers of neoliberal policies.
The standard package of the "Washington Consensus" of approved policies for developing
nations included demands that they open their capital markets to speculative private finance,
as well as cutting taxes on capital, weakening social transfers, and gutting labor regulation
and public ownership. But private capital investment in poor countries proved to be fickle. The
result was often excessive inflows during the boom part of the cycle and punitive withdrawals
during the bust -- the opposite of the patient, long-term development capital that these
countries needed and that was provided by the World Bank of an earlier era. During the bust
phase, the IMF typically imposes even more stringent neoliberal demands as the price of
financial bailouts, including perverse budgetary austerity, supposedly to restore the
confidence of the very speculative capital markets responsible for the boom-bust cycle.
Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust,
and then IMF pile-on. Greece is still suffering the impact. After 1990, hyper-globalism also
included trade treaties whose terms favored multinational corporations. Traditionally, trade
agreements had been mainly about reciprocal reductions of tariffs. Nations were free to have
whatever brand of regulation, public investment, or social policies they chose. With the advent
of the WTO, many policies other than tariffs were branded as trade distorting, even as takings
without compensation. Trade deals were used to give foreign capital free access and to
dismantle national regulation and public ownership. Special courts were created in which
foreign corporations and investors could do end runs around national authorities to challenge
regulation for impeding commerce.
At first, the sponsors of the new trade regime tried to claim the successful economies of
East Asia as evidence of the success of the neoliberal recipe. Supposedly, these nations had
succeeded by pursuing "export-led growth," exposing their domestic economies to salutary
competition. But these claims were soon exposed as the opposite of what had actually occurred.
In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by
rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and
insulated from foreign speculative capital. They developed world-class industries as state-led
cartels that favored domestic production and supply. East Asia got into trouble only when it
followed IMF dictates to throw open capital markets, and in the aftermath they recovered by
closing those markets and assembling war chests of hard currency so that they'd never again
have to go begging to the IMF. Enthusiasts of hyper-globalization also claimed that it
benefited poor countries by increasing export opportunities, but as the success of East Asia
shows, there is more than one way to boost exports -- and many poorer countries suffered under
the terms of the global neoliberal regime.
Nor was the damage confined to the developing world. As the work of Harvard economist Dani
Rodrik has demonstrated, democracy requires a polity. For better or for worse, the polity and
democratic citizenship are national. By enhancing the global market at the expense of the
democratic state, the current brand of hyper-globalization deliberately weakens the capacity of
states to regulate markets, and weakens democracy itself.
When Do Markets Work?
The failure of neoliberalism as economic and social policy does not mean that markets never
work. A command economy is even more utopian and perverse than a neoliberal one. The practical
quest is for an efficient and equitable middle ground.
The neoliberal story of how the economy operates assumes a largely frictionless marketplace,
where prices are set by supply and demand, and the price mechanism allocates resources to their
optimal use in the economy as a whole. For this discipline to work as advertised, however,
there can be no market power, competition must be plentiful, sellers and buyers must have
roughly equal information, and there can be no significant externalities. Much of the 20th
century was practical proof that these conditions did not describe a good part of the actual
economy. And if markets priced things wrong, the market system did not aggregate to an
efficient equilibrium, and depressions could become self-deepening. As Keynes demonstrated,
only a massive jolt of government spending could restart the engines, even if market pricing
was partly violated in the process.
Nonetheless, in many sectors of the economy, the process of buying and selling is close
enough to the textbook conditions of perfect competition that the price system works tolerably
well. Supermarkets, for instance, deliver roughly accurate prices because of the consumer's
freedom and knowledge to shop around. Likewise much of retailing. However, when we get into
major realms of the economy with positive or negative externalities, such as education and
health, markets are not sufficient. And in other major realms, such as pharmaceuticals, where
corporations use their political power to rig the terms of patents, the market doesn't produce
a cure.
The basic argument of neoliberalism can fit on a bumper sticker. Markets work;
governments don't . If you want to embellish that story, there are two corollaries: Markets
embody human freedom. And with markets, people basically get what they deserve; to alter market
outcomes is to spoil the poor and punish the productive. That conclusion logically flows from
the premise that markets are efficient. Milton Friedman became rich, famous, and influential by
teasing out the several implications of these simple premises.
It is much harder to articulate the case for a mixed economy than the case for free markets,
precisely because the mixed economy is mixed. The rebuttal takes several paragraphs. The more
complex story holds that markets are substantially efficient in some realms but far from
efficient in others, because of positive and negative externalities, the tendency of financial
markets to create cycles of boom and bust, the intersection of self-interest and corruption,
the asymmetry of information between company and consumer, the asymmetry of power between
corporation and employee, the power of the powerful to rig the rules, and the fact that there
are realms of human life (the right to vote, human liberty, security of one's person) that
should not be marketized.
And if markets are not perfectly efficient, then distributive questions are partly political
choices. Some societies pay pre-K teachers the minimum wage as glorified babysitters. Others
educate and compensate them as professionals. There is no "correct" market-derived wage,
because pre-kindergarten is a social good and the issue of how to train and compensate teachers
is a social choice, not a market choice. The same is true of the other human services,
including medicine. Nor is there a theoretically correct set of rules for patents, trademarks,
and copyrights. These are politically derived, either balancing the interests of innovation
with those of diffusion -- or being politically captured by incumbent industries.
Governments can in principle improve on market outcomes via regulation, but that fact is
complicated by the risk of regulatory capture. So another issue that arises is market failure
versus polity failure, which brings us back to the urgency of strong democracy and effective
government.
After Neoliberalism
The political reversal of neoliberalism can only come through practical politics and
policies that demonstrate how government often can serve citizens more equitably and
efficiently than markets. Revision of theory will take care of itself. There is no shortage of
dissenting theorists and empirical policy researchers whose scholarly work has been vindicated
by events. What they need is not more theory but more influence, both in the academy and in the
corridors of power. They are available to advise a new progressive administration, if
that administration can get elected and if it refrains from hiring neoliberal
advisers.
There are also some relatively new areas that invite policy innovation. These include
regulation of privacy rights versus entrepreneurial liberties in the digital realm; how to
think of the internet as a common carrier; how to update competition and antitrust policy as
platform monopolies exert new forms of market power; how to modernize labor-market policy in
the era of the gig economy; and the role of deeper income supplements as machines replace human
workers.
The failed neoliberal experiment also makes the case not just for better-regulated
capitalism but for direct public alternatives as well. Banking, done properly, especially the
provision of mortgage finance, is close to a public utility. Much of it could be public. A
great deal of research is done more honestly and more cost-effectively in public, peer-reviewed
institutions such as the NIH than by a substantially corrupt private pharmaceutical industry.
Social housing often is more cost-effective than so-called public-private partnerships. Public
power is more efficient to generate, less prone to monopolistic price-gouging, and friendlier
to the needed green transition than private power. The public option in health care is far more
efficient than the current crazy quilt in which each layer of complexity adds opacity and cost.
Public provision does require public oversight, but that is more straightforward and
transparent than the byzantine dance of regulation and counter-regulation.
The two other benefits of direct public provision are that the public gets direct evidence
of government delivering something of value, and that the countervailing power of democracy to
harness markets is enhanced. A mixed economy depends above all on a strong democracy -- one
even stronger than the democracy that succumbed to the corrupting influence of economic elites
and their neoliberal intellectual allies beginning half a century ago. The antidote to the
resurrected neoliberal fable is the resurrection of democracy -- strong enough to tame the
market in a way that tames it for keeps.
Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at
Brandeis University's Heller School. His latest book is The Stakes: 2020 and the Survival of American
Democracy . In addition to writing for the Prospect, he writes for HuffPost, The Boston
Globe, and The New York Review of Books.
"... Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work. ..."
The Economic Cycle Research Institute's
(ECRI) Lakshman Achuthan recently sat down with CNBC's
Michael Santoli to discuss the jobs growth downturn. Keep in mind, this conversation was held on
Wednesday, several days before Friday's
disappointing
jobs report.
Achuthan told Santoli there's a "
very clear cyclical downturn
in jobs growth, there's really no debating that, and it looks set to continue
."
Achuthan said January 2019 marked the cyclical peak in jobs growth, has been moving lower ever
since, and the trend is far from over.
Both nonfarm payrolls and the household survey
year-over-year growth are in cyclical downturns,
he said.
While the economic narratives via the mainstream financial press continue to cheerlead that the
consumer will lift all tides thanks to the supposedly strong jobs market, Achuthan believes the
downturn in jobs growth will start to "undermine consumer confidence." And it's the loss in consumer
confidence that could tilt the economy into recession.
He also said when examining cyclically
sensitive sectors of the economy, there are already "questionable jobs numbers," such as a significant
surge in the construction unemployment rate.
Achuthan said nonfarm payroll growth has plunged to a 17-month low, and the household survey is
even weaker. He said the top nonfarm payroll line would be revised down by half a million jobs in the
coming months, which would underline the weakness in employment.
Achuthan emphasized to Santoli that
ECRI's recession call won't be "taken off the table.
We've been talking
about a growth rate cycle slowdown.
We're slow-walking toward -- some recessionary window of vulnerability
-- we're
not there today -- but this piece of the puzzle [jobs growth downturn] is looking a bit wobbly. This is the main message that Wall
Street is missing."
As Wall Street bids stocks to near-record highs on "trade optimism" and the belief that the consumer
will save the day, in large part because of solid jobs growth.
ECRI's Leading Employment
Index, which correctly anticipated this downturn in jobs growth, is at its worst reading since the
Great Recession
.
And Wall Street's bet today is that the Fed can achieve a soft landing –
as in 1995-96 – when it started the rate cut cycle the same month the inflation downturn was signaled
by the U.S. Future Inflation Gauge (USFIG) turning lower.
And now it should become increasingly clear to readers why President Trump has sounded the alarm about the need for 100bps rate
cuts, quantitative easing, and emergency payroll tax cuts - it's because he's been briefed about the economic downturn that has
already started.
I don't agree with him that the Fed can do anything to correct this,
nor do they have an incentive to do so. The Fed is not on the
consumer's side. They will appropriate funds to whoever they want to,
just like 08, and give the middle finger to everyone else.
Job quality is horrible, particularly for US citizen STEM workers.
This has been the case since the downturn that began in the late
1990s. Trump needs to fully cancel the OPT program and almost
eliminate the H-1B program. Major employers don't even bother
considering US citizen STEM talent before they hire foreign
nationals.
Yes, but they don't bother to come out and tell you its a fake ad. One of the tragedies of the online job application process is that it forces a person, with little to no knowledge of a company and its internals, to pick, out of potentially hundreds of roles, which one would be best for them.
Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work.
This is a Marxist critique of neoliberalism. Not necessary right but they his some relevant
points.
Notable quotes:
"... The ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. ..."
"... The ex ante tendency toward overproduction arises because the vector of real wages across countries does not increase noticeably over time in the world economy, while the vector of labor productivities does, typically resulting in a rise in the share of surplus in world output. ..."
"... While the rise in the vector of labor productivities across countries, a ubiquitous phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an explanation, why does the vector of real wages remain virtually stagnant in the world economy? The answer lies in the sui generis character of contemporary globalization that, for the first time in the history of capitalism, has led to a relocation of activity from the metropolis to third world countries in order to take advantage of the lower wages prevailing in the latter and meet global demand. ..."
"... The current globalization broke with this. The movement of capital from the metropolis to the third world, especially to East, South, and Southeast Asia to relocate plants there and take advantage of their lower wages for meeting global demand, has led to a desegmentation of the world economy, subjecting metropolitan wages to the restraining effect exercised by the third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was marginally lower -- than it had been in 1968. 5 ..."
"... This ever-present opposition becomes decisive within a regime of globalization. As long as finance capital remains national -- that is, nation-based -- and the state is a nation-state, the latter can override this opposition under certain circumstances, such as in the post-Second World War period when capitalism was facing an existential crisis. But when finance capital is globalized, meaning, when it is free to move across country borders while the state remains a nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large fiscal deficits against its wishes, then it would simply leave that country en masse , causing a financial crisis. ..."
"... The state therefore capitulates to the demands of globalized finance capital and eschews direct fiscal intervention for increasing demand. It resorts to monetary policy instead since that operates through wealth holders' decisions, and hence does not undermine their social position. But, precisely for this reason, monetary policy is an ineffective instrument, as was evident in the United States in the aftermath of the 2007–09 crisis when even the pushing of interest rates down to zero scarcely revived activity. 6 ..."
"... If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a beggar-my-neighbor policy, does lead to a significant export of unemployment from the United States, then it will invite retaliation and trigger a trade war that will only worsen the crisis for the world economy as a whole by dampening global investment. Indeed, since the United States has been targeting China in particular, some retaliatory measures have already appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be because the export of unemployment from the United States is insubstantial, keeping unemployment everywhere, including in the United States, as precarious as it is now. However we look at it, the world would henceforth face higher levels of unemployment. ..."
"... The second implication of this dead end is that the era of export-led growth is by and large over for third world economies. The slowing down of world economic growth, together with protectionism in the United States against successful third world exporters, which could even spread to other metropolitan economies, suggests that the strategy of relying on the world market to generate domestic growth has run out of steam. Third world economies, including the ones that have been very successful at exporting, would now have to rely much more on their home market ..."
"... In other words, we shall now have an intensification of the imperialist stranglehold over third world economies, especially those pushed into unsustainable balance-of-payments deficits in the new situation. By imperialism , here we do not mean the imperialism of this or that major power, but the imperialism of international finance capital, with which even domestic big bourgeoisies are integrated, directed against their own working people ..."
"... In short, the ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop and finds fascism. ..."
"... The first is the so-called spontaneous method of capital flight. Any political formation that seeks to take the country out of the neoliberal regime will witness capital flight even before it has been elected to office, bringing the country to a financial crisis and thereby denting its electoral prospects. And if perchance it still gets elected, the outflow will only increase, even before it assumes office. The inevitable difficulties faced by the people may well make the government back down at that stage. The sheer difficulty of transition away from a neoliberal regime could be enough to bring even a government based on the support of workers and peasants to its knees, precisely to save them short-term distress or to avoid losing their support. ..."
"... The third weapon consists in carrying out so-called democratic or parliamentary coups of the sort that Latin America has been experiencing. Coups in the old days were effected through the local armed forces and necessarily meant the imposition of military dictatorships in lieu of civilian, democratically elected governments. Now, taking advantage of the disaffection generated within countries by the hardships caused by capital flight and imposed sanctions, imperialism promotes coups through fascist or fascist-sympathizing middle-class political elements in the name of restoring democracy, which is synonymous with the pursuit of neoliberalism. ..."
"... And if all these measures fail, there is always the possibility of resorting to economic warfare (such as destroying Venezuela's electricity supply), and eventually to military warfare. Venezuela today provides a classic example of what imperialist intervention in a third world country is going to look like in the era of decline of neoliberal capitalism, when revolts are going to characterize such countries more and more. ..."
"... Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing for long. It has no vision for reinventing itself. Interestingly, in the period after the First World War, when capitalism was on the verge of sinking into a crisis, the idea of state intervention as a way of its revival had already been mooted, though its coming into vogue only occurred at the end of the Second World War. 11 Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize itself. And weapons like domestic fascism in the third world and direct imperialist intervention cannot for long save it from the anger of the masses that is building up against it. ..."
The ideology of neoliberal capitalism was the promise of growth.
But with neoliberal capitalism reaching a dead end, this promise disappears and so does this
ideological prop.
Harry Magdoff's The Age of
Imperialism is a classic work that shows how postwar political decolonization does not
negate the phenomenon of imperialism. The book has two distinct aspects. On the one hand, it
follows in V. I. Lenin's footsteps in providing a comprehensive account of how capitalism at
the time operated globally. On the other hand, it raises a question that is less frequently
discussed in Marxist literature -- namely, the need for imperialism. Here, Magdoff not only
highlighted the crucial importance, among other things, of the third world's raw materials for
metropolitan capital, but also refuted the argument that the declining share of raw-material
value in gross manufacturing output somehow reduced this importance, making the simple point
that there can be no manufacturing at all without raw materials. 1
Magdoff's focus was on a period when imperialism was severely resisting economic
decolonization in the third world, with newly independent third world countries taking control
over their own resources. He highlighted the entire armory of weapons used by imperialism. But
he was writing in a period that predated the onset of neoliberalism. Today, we not only have
decades of neoliberalism behind us, but the neoliberal regime itself has reached a dead end.
Contemporary imperialism has to be discussed within this setting.
Globalization and
Economic Crisis
There are two reasons why the regime of neoliberal globalization has run into a dead end.
The first is an ex ante tendency toward global overproduction; the second is that the
only possible counter to this tendency within the regime is the formation of asset-price
bubbles, which cannot be conjured up at will and whose collapse, if they do appear, plunges the
economy back into crisis. In short, to use the words of British economic historian Samuel
Berrick Saul, there are no "markets on tap" for contemporary metropolitan capitalism, such as
had been provided by colonialism prior to the First World War and by state expenditure in the
post-Second World War period of dirigisme . 2
The ex ante tendency toward overproduction arises because the vector of real wages
across countries does not increase noticeably over time in the world economy, while the vector
of labor productivities does, typically resulting in a rise in the share of surplus in world
output. As Paul Baran and Paul Sweezy argued in Monopoly Capital , following the lead of
Michał Kalecki and Josef Steindl, such a rise in the share of economic surplus, or a shift
from wages to surplus, has the effect of reducing aggregate demand since the ratio of
consumption to income is higher on average for wage earners than for those living off the
surplus. 3
Therefore, assuming a given level of investment associated with any period, such a shift would
tend to reduce consumption demand and hence aggregate demand, output, and capacity utilization.
In turn, reduced capacity utilization would lower investment over time, further aggravating the
demand-reducing effect arising from the consumption side.
While the rise in the vector of labor productivities across countries, a ubiquitous
phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an
explanation, why does the vector of real wages remain virtually stagnant in the world economy?
The answer lies in the sui generis character of contemporary globalization that, for the
first time in the history of capitalism, has led to a relocation of activity from the
metropolis to third world countries in order to take advantage of the lower wages prevailing in
the latter and meet global demand.
Historically, while labor has not been, and is still not, free to migrate from the third
world to the metropolis, capital, though juridically free to move from the latter to the
former, did not actually do so , except to sectors like mines and plantations, which
only strengthened, rather than broke, the colonial pattern of the international division of
labor. 4
This segmentation of the world economy meant that wages in the metropolis increased with labor
productivity, unrestrained by the vast labor reserves of the third world, which themselves had
been caused by the displacement of manufactures through the twin processes of
deindustrialization (competition from metropolitan goods) and the drain of surplus (the
siphoning off of a large part of the economic surplus, through taxes on peasants that are no
longer spent on local artisan products but finance gratis primary commodity exports to
the metropolis instead).
The current globalization broke with this. The movement of capital from the metropolis to
the third world, especially to East, South, and Southeast Asia to relocate plants there and
take advantage of their lower wages for meeting global demand, has led to a desegmentation of
the world economy, subjecting metropolitan wages to the restraining effect exercised by the
third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the
real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was
marginally lower -- than it had been in 1968. 5
At the same time, such relocation of activities, despite causing impressive growth rates of
gross domestic product (GDP) in many third world countries, does not lead to the exhaustion of
the third world's labor reserves. This is because of another feature of contemporary
globalization: the unleashing of a process of primitive accumulation of capital against petty
producers, including peasant agriculturists in the third world, who had earlier been protected,
to an extent, from the encroachment of big capital (both domestic and foreign) by the
postcolonial dirigiste regimes in these countries. Under neoliberalism, such protection
is withdrawn, causing an income squeeze on these producers and often their outright
dispossession from their land, which is then used by big capital for its various so-called
development projects. The increase in employment, even in countries with impressive GDP growth
rates in the third world, falls way short of the natural growth of the workforce, let alone
absorbing the additional job seekers coming from the ranks of displaced petty producers. The
labor reserves therefore never get used up. Indeed, on the contrary, they are augmented
further, because real wages continue to remain tied to a subsistence level, even as
metropolitan wages too are restrained. The vector of real wages in the world economy as a whole
therefore remains restrained.
Although contemporary globalization thus gives rise to an ex ante tendency toward
overproduction, state expenditure that could provide a counter to this (and had provided a
counter through military spending in the United States, according to Baran and Sweezy) can no
longer do so under the current regime. Finance is usually opposed to direct state intervention
through larger spending as a way of increasing employment. This opposition expresses itself
through an opposition not just to larger taxes on capitalists, but also to a larger fiscal
deficit for financing such spending. Obviously, if larger state spending is financed by taxes
on workers, then it hardly adds to aggregate demand, for workers spend the bulk of their
incomes anyway, so the state taking this income and spending it instead does not add any extra
demand. Hence, larger state spending can increase employment only if it is financed either
through a fiscal deficit or through taxes on capitalists who keep a part of their income
unspent or saved. But these are precisely the two modes of financing state expenditure that
finance capital opposes.
Its opposing larger taxes on capitalists is understandable, but why is it so opposed to a
larger fiscal deficit? Even within a capitalist economy, there are no sound economic
theoretical reasons that should preclude a fiscal deficit under all circumstances. The root of
the opposition therefore lies in deeper social considerations: if the capitalist economic
system becomes dependent on the state to promote employment directly , then this fact
undermines the social legitimacy of capitalism. The need for the state to boost the animal
spirits of the capitalists disappears and a perspective on the system that is epistemically
exterior to it is provided to the people, making it possible for them to ask: If the state can
do the job of providing employment, then why do we need the capitalists at all? It is an
instinctive appreciation of this potential danger that underlies the opposition of capital,
especially of finance, to any direct effort by the state to generate employment.
This ever-present opposition becomes decisive within a regime of globalization. As long as
finance capital remains national -- that is, nation-based -- and the state is a nation-state,
the latter can override this opposition under certain circumstances, such as in the post-Second
World War period when capitalism was facing an existential crisis. But when finance capital is
globalized, meaning, when it is free to move across country borders while the state remains a
nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large
fiscal deficits against its wishes, then it would simply leave that country en masse ,
causing a financial crisis.
The state therefore capitulates to the demands of globalized finance capital and eschews
direct fiscal intervention for increasing demand. It resorts to monetary policy instead since
that operates through wealth holders' decisions, and hence does not undermine their
social position. But, precisely for this reason, monetary policy is an ineffective instrument,
as was evident in the United States in the aftermath of the 2007–09 crisis when even the
pushing of interest rates down to zero scarcely revived activity. 6
It may be thought that this compulsion on the part of the state to accede to the demand of
finance to eschew fiscal intervention for enlarging employment should not hold for the United
States. Its currency being considered by the world's wealth holders to be "as good as gold"
should make it immune to capital flight. But there is an additional factor operating in the
case of the United States: that the demand generated by a bigger U.S. fiscal deficit would
substantially leak abroad in a neoliberal setting, which would increase its external debt
(since, unlike Britain in its heyday, it does not have access to any unrequited colonial
transfers) for the sake of generating employment elsewhere. This fact deters any fiscal effort
even in the United States to boost demand within a neoliberal setting. 7
Therefore, it follows that state spending cannot provide a counter to the ex ante
tendency toward global overproduction within a regime of neoliberal globalization, which makes
the world economy precariously dependent on occasional asset-price bubbles, primarily in the
U.S. economy, for obtaining, at best, some temporary relief from the crisis. It is this fact
that underlies the dead end that neoliberal capitalism has reached. Indeed, Donald Trump's
resort to protectionism in the United States to alleviate unemployment is a clear recognition
of the system having reached this cul-de-sac. The fact that the mightiest capitalist
economy in the world has to move away from the rules of the neoliberal game in an attempt to
alleviate its crisis of unemployment/underemployment -- while compensating capitalists
adversely affected by this move through tax cuts, as well as carefully ensuring that no
restraints are imposed on free cross-border financial flows -- shows that these rules
are no longer viable in their pristine form.
Some Implications of This Dead End
There are at least four important implications of this dead end of neoliberalism. The first
is that the world economy will now be afflicted by much higher levels of unemployment than it
was in the last decade of the twentieth century and the early years of the twenty-first, when
the dot-com and the housing bubbles in the United States had, sequentially, a pronounced
impact. It is true that the U.S. unemployment rate today appears to be at a historic low, but
this is misleading: the labor-force participation rate in the United States today is lower than
it was in 2008, which reflects the discouraged-worker effect . Adjusting for this lower
participation, the U.S. unemployment rate is considerable -- around 8 percent. Indeed, Trump
would not be imposing protection in the United States if unemployment was actually as low as 4
percent, which is the official figure. Elsewhere in the world, of course, unemployment
post-2008 continues to be evidently higher than before. Indeed, the severity of the current
problem of below-full-employment production in the U.S. economy is best illustrated by capacity
utilization figures in manufacturing. The weakness of the U.S. recovery from the Great
Recession is indicated by the fact that the current extended recovery represents the first
decade in the entire post-Second World War period in which capacity utilization in
manufacturing has never risen as high as 80 percent in a single quarter, with the resulting
stagnation of investment. 8
If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a
beggar-my-neighbor policy, does lead to a significant export of unemployment from the
United States, then it will invite retaliation and trigger a trade war that will only worsen
the crisis for the world economy as a whole by dampening global investment. Indeed, since the
United States has been targeting China in particular, some retaliatory measures have already
appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be
because the export of unemployment from the United States is insubstantial, keeping
unemployment everywhere, including in the United States, as precarious as it is now. However we
look at it, the world would henceforth face higher levels of unemployment.
There has been some discussion on how global value chains would be affected by Trump's
protectionism. But the fact that global macroeconomics in the early twenty-first century will
look altogether different compared to earlier has not been much discussed.
In light of the preceding discussion, one could say that if, instead of individual
nation-states whose writ cannot possibly run against globalized finance capital, there was a
global state or a set of major nation-states acting in unison to override the objections of
globalized finance and provide a coordinated fiscal stimulus to the world economy, then perhaps
there could be recovery. Such a coordinated fiscal stimulus was suggested by a group of German
trade unionists, as well as by John Maynard Keynes during the Great Depression in the 1930s.
9
While it was turned down then, in the present context it has not even been discussed.
The second implication of this dead end is that the era of export-led growth is by and large
over for third world economies. The slowing down of world economic growth, together with
protectionism in the United States against successful third world exporters, which could even
spread to other metropolitan economies, suggests that the strategy of relying on the world
market to generate domestic growth has run out of steam. Third world economies, including the
ones that have been very successful at exporting, would now have to rely much more on their
home market.
Such a transition will not be easy; it will require promoting domestic peasant agriculture,
defending petty production, moving toward cooperative forms of production, and ensuring greater
equality in income distribution, all of which need major structural shifts. For smaller
economies, it would also require their coming together with other economies to provide a
minimum size to the domestic market. In short, the dead end of neoliberalism also means the
need for a shift away from the so-called neoliberal development strategy that has held sway
until now.
The third implication is the imminent engulfing of a whole range of third world economies in
serious balance-of-payments difficulties. This is because, while their exports will be sluggish
in the new situation, this very fact will also discourage financial inflows into their
economies, whose easy availability had enabled them to maintain current account deficits on
their balance of payments earlier. In such a situation, within the existing neoliberal
paradigm, they would be forced to adopt austerity measures that would impose income deflation
on their people, make the conditions of their people significantly worse, lead to a further
handing over of their national assets and resources to international capital, and prevent
precisely any possible transition to an alternative strategy of home market-based growth.
In other words, we shall now have an intensification of the imperialist stranglehold over
third world economies, especially those pushed into unsustainable balance-of-payments deficits
in the new situation. By imperialism , here we do not mean the imperialism of this or
that major power, but the imperialism of international finance capital, with which even
domestic big bourgeoisies are integrated, directed against their own working people.
The fourth implication is the worldwide upsurge of fascism. Neoliberal capitalism even
before it reached a dead end, even in the period when it achieved reasonable growth and
employment rates, had pushed the world into greater hunger and poverty. For instance, the world
per-capita cereal output was 355 kilograms for 1980 (triennium average for 1979–81
divided by mid–triennium population) and fell to 343 in 2000, leveling at 344.9 in 2016
-- and a substantial amount of this last figure went into ethanol production. Clearly, in a
period of growth of the world economy, per-capita cereal absorption should be expanding,
especially since we are talking here not just of direct absorption but of direct and indirect
absorption, the latter through processed foods and feed grains in animal products. The fact
that there was an absolute decline in per-capita output, which no doubt caused a decline in
per-capita absorption, suggests an absolute worsening in the nutritional level of a substantial
segment of the world's population.
But this growing hunger and nutritional poverty did not immediately arouse any significant
resistance, both because such resistance itself becomes more difficult under neoliberalism
(since the very globalization of capital makes it an elusive target) and also because higher
GDP growth rates provided a hope that distress might be overcome in the course of time.
Peasants in distress, for instance, entertained the hope that their children would live better
in the years to come if given a modicum of education and accepted their fate.
In short, the ideology of neoliberal capitalism was the promise of growth. But with
neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological
prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop
and finds fascism. This changes the discourse away from the material conditions of people's
lives to the so-called threat to the nation, placing the blame for people's distress not on the
failure of the system, but on ethnic, linguistic, and religious minority groups, the
other that is portrayed as an enemy. It projects a so-called messiah whose sheer
muscularity can somehow magically overcome all problems; it promotes a culture of unreason so
that both the vilification of the other and the magical powers of the supposed leader
can be placed beyond any intellectual questioning; it uses a combination of state repression
and street-level vigilantism by fascist thugs to terrorize opponents; and it forges a close
relationship with big business, or, in Kalecki's words, "a partnership of big business and
fascist upstarts." 10
Fascist groups of one kind or another exist in all modern societies. They move center stage
and even into power only on certain occasions when they get the backing of big business. And
these occasions arise when three conditions are satisfied: when there is an economic crisis so
the system cannot simply go on as before; when the usual liberal establishment is manifestly
incapable of resolving the crisis; and when the left is not strong enough to provide an
alternative to the people in order to move out of the conjuncture.
This last point may appear odd at first, since many see the big bourgeoisie's recourse to
fascism as a counter to the growth of the left's strength in the context of a capitalist
crisis. But when the left poses a serious threat, the response of the big bourgeoisie typically
is to attempt to split it by offering concessions. It uses fascism to prop itself up only when
the left is weakened. Walter Benjamin's remark that "behind every fascism there is a failed
revolution" points in this direction.
Fascism Then and Now
Contemporary fascism, however, differs in crucial respects from its 1930s counterpart, which
is why many are reluctant to call the current phenomenon a fascist upsurge. But historical
parallels, if carefully drawn, can be useful. While in some aforementioned respects
contemporary fascism does resemble the phenomenon of the 1930s, there are serious differences
between the two that must also be noted.
First, we must note that while the current fascist upsurge has put fascist elements in power
in many countries, there are no fascist states of the 1930s kind as of yet. Even if the fascist
elements in power try to push the country toward a fascist state, it is not clear that they
will succeed. There are many reasons for this, but an important one is that fascists in power
today cannot overcome the crisis of neoliberalism, since they accept the regime of
globalization of finance. This includes Trump, despite his protectionism. In the 1930s,
however, this was not the case. The horrors associated with the institution of a fascist state
in the 1930s had been camouflaged to an extent by the ability of the fascists in power to
overcome mass unemployment and end the Depression through larger military spending, financed by
government borrowing. Contemporary fascism, by contrast, lacks the ability to overcome the
opposition of international finance capital to fiscal activism on the part of the government to
generate larger demand, output, and employment, even via military spending.
Such activism, as discussed earlier, required larger government spending financed either
through taxes on capitalists or through a fiscal deficit. Finance capital was opposed to both
of these measures and it being globalized made this opposition decisive . The
decisiveness of this opposition remains even if the government happens to be one composed of
fascist elements. Hence, contemporary fascism, straitjacketed by "fiscal rectitude," cannot
possibly alleviate even temporarily the economic crises facing people and cannot provide any
cover for a transition to a fascist state akin to the ones of the 1930s, which makes such a
transition that much more unlikely.
Another difference is also related to the phenomenon of the globalization of finance. The
1930s were marked by what Lenin had earlier called "interimperialist rivalry." The military
expenditures incurred by fascist governments, even though they pulled countries out of the
Depression and unemployment, inevitably led to wars for "repartitioning an already partitioned
world." Fascism was the progenitor of war and burned itself out through war at, needless to
say, great cost to humankind.
Contemporary fascism, however, operates in a world where interimperialist rivalry is far
more muted. Some have seen in this muting a vindication of Karl Kautsky's vision of an
"ultraimperialism" as against Lenin's emphasis on the permanence of interimperialist rivalry,
but this is wrong. Both Kautsky and Lenin were talking about a world where finance capital and
the financial oligarchy were essentially national -- that is, German, French, or British. And
while Kautsky talked about the possibility of truces among the rival oligarchies, Lenin saw
such truces only as transient phenomena punctuating the ubiquity of rivalry.
In contrast, what we have today is not nation-based finance capitals, but
international finance capital into whose corpus the finance capitals drawn from
particular countries are integrated. This globalized finance capital does not want the world
to be partitioned into economic territories of rival powers ; on the contrary, it wants the
entire globe to be open to its own unrestricted movement. The muting of rivalry between major
powers, therefore, is not because they prefer truce to war, or peaceful partitioning of the
world to forcible repartitioning, but because the material conditions themselves have changed
so that it is no longer a matter of such choices. The world has gone beyond both Lenin and
Kautsky, as well as their debates.
Not only are we not going to have wars between major powers in this era of fascist upsurge
(of course, as will be discussed, we shall have other wars), but, by the same token, this
fascist upsurge will not burn out through any cataclysmic war. What we are likely to see is a
lingering fascism of less murderous intensity , which, when in power, does not
necessarily do away with all the forms of bourgeois democracy, does not necessarily physically
annihilate the opposition, and may even allow itself to get voted out of power occasionally.
But since its successor government, as long as it remains within the confines of the neoliberal
strategy, will also be incapable of alleviating the crisis, the fascist elements are likely to
return to power as well. And whether the fascist elements are in or out of power, they will
remain a potent force working toward the fascification of the society and the polity, even
while promoting corporate interests within a regime of globalization of finance, and hence
permanently maintaining the "partnership between big business and fascist upstarts."
Put differently, since the contemporary fascist upsurge is not likely to burn itself out as
the earlier one did, it has to be overcome by transcending the very conjuncture that produced
it: neoliberal capitalism at a dead end. A class mobilization of working people around an
alternative set of transitional demands that do not necessarily directly target neoliberal
capitalism, but which are immanently unrealizable within the regime of neoliberal capitalism,
can provide an initial way out of this conjuncture and lead to its eventual transcendence.
Such a class mobilization in the third world context would not mean making no truces with
liberal bourgeois elements against the fascists. On the contrary, since the liberal bourgeois
elements too are getting marginalized through a discourse of jingoistic nationalism typically
manufactured by the fascists, they too would like to shift the discourse toward the material
conditions of people's lives, no doubt claiming that an improvement in these conditions is
possible within the neoliberal economic regime itself. Such a shift in discourse is in
itself a major antifascist act . Experience will teach that the agenda advanced as part of
this changed discourse is unrealizable under neoliberalism, providing the scope for dialectical
intervention by the left to transcend neoliberal capitalism.
Imperialist
Interventions
Even though fascism will have a lingering presence in this conjuncture of "neoliberalism at
a dead end," with the backing of domestic corporate-financial interests that are themselves
integrated into the corpus of international finance capital, the working people in the third
world will increasingly demand better material conditions of life and thereby rupture the
fascist discourse of jingoistic nationalism (that ironically in a third world context is not
anti-imperialist).
In fact, neoliberalism reaching a dead end and having to rely on fascist elements revives
meaningful political activity, which the heyday of neoliberalism had precluded, because most
political formations then had been trapped within an identical neoliberal agenda that appeared
promising. (Latin America had a somewhat different history because neoliberalism arrived in
that continent through military dictatorships, not through its more or less tacit acceptance by
most political formations.)
Such revived political activity will necessarily throw up challenges to neoliberal
capitalism in particular countries. Imperialism, by which we mean the entire economic and
political arrangement sustaining the hegemony of international finance capital, will deal with
these challenges in at least four different ways.
The first is the so-called spontaneous method of capital flight. Any political formation
that seeks to take the country out of the neoliberal regime will witness capital flight even
before it has been elected to office, bringing the country to a financial crisis and thereby
denting its electoral prospects. And if perchance it still gets elected, the outflow will only
increase, even before it assumes office. The inevitable difficulties faced by the people may
well make the government back down at that stage. The sheer difficulty of transition away from
a neoliberal regime could be enough to bring even a government based on the support of workers
and peasants to its knees, precisely to save them short-term distress or to avoid losing their
support.
Even if capital controls are put in place, where there are current account deficits,
financing such deficits would pose a problem, necessitating some trade controls. But this is
where the second instrument of imperialism comes into play: the imposition of trade sanctions
by the metropolitan states, which then cajole other countries to stop buying from the
sanctioned country that is trying to break away from thralldom to globalized finance capital.
Even if the latter would have otherwise succeeded in stabilizing its economy despite its
attempt to break away, the imposition of sanctions becomes an additional blow.
The third weapon consists in carrying out so-called democratic or parliamentary coups of the
sort that Latin America has been experiencing. Coups in the old days were effected through the
local armed forces and necessarily meant the imposition of military dictatorships in lieu of
civilian, democratically elected governments. Now, taking advantage of the disaffection
generated within countries by the hardships caused by capital flight and imposed sanctions,
imperialism promotes coups through fascist or fascist-sympathizing middle-class political
elements in the name of restoring democracy, which is synonymous with the pursuit of
neoliberalism.
And if all these measures fail, there is always the possibility of resorting to economic
warfare (such as destroying Venezuela's electricity supply), and eventually to military
warfare. Venezuela today provides a classic example of what imperialist intervention in a third
world country is going to look like in the era of decline of neoliberal capitalism, when
revolts are going to characterize such countries more and more.
Two aspects of such intervention are striking. One is the virtual unanimity among the
metropolitan states, which only underscores the muting of interimperialist rivalry in the era
of hegemony of global finance capital. The other is the extent of support that such
intervention commands within metropolitan countries, from the right to even the liberal
segments.
Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing
for long. It has no vision for reinventing itself. Interestingly, in the period after the First
World War, when capitalism was on the verge of sinking into a crisis, the idea of state
intervention as a way of its revival had already been mooted, though its coming into vogue only
occurred at the end of the Second World War. 11
Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize
itself. And weapons like domestic fascism in the third world and direct imperialist
intervention cannot for long save it from the anger of the masses that is building up against
it.
Samuel Berrick Saul, Studies in British Overseas Trade, 1870–1914
(Liverpool: Liverpool University Press, 1960).
Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York:
Monthly Review Press, 1966).
One of the first authors to recognize this fact and its significance was Paul Baran in
The Political Economy of
Growth (New York: Monthly Review Press, 1957).
For the role of such colonial transfers in sustaining the British balance of payments and the
long Victorian and Edwardian boom, see Utsa Patnaik, "Revisiting the 'Drain,' or Transfers
from India to Britain in the Context of Global Diffusion of Capitalism," in Agrarian
and Other Histories: Essays for Binay Bhushan Chaudhuri , ed. Shubhra Chakrabarti and
Utsa Patnaik (Delhi: Tulika, 2017), 277-317.
Federal Reserve Board of Saint Louis Economic Research, FRED, "Capacity Utilization:
Manufacturing," February 2019 (updated March 27, 2019), http://fred.stlouisfed.org .
This issue is discussed by Charles P. Kindleberger in The World in Depression,
1929–1939 , 40th anniversary ed. (Oakland: University of California Press,
2013).
Joseph Schumpeter had seen Keynes's The Economic Consequences of the Peace as
essentially advocating such state intervention in the new situation. See his essay, "John
Maynard Keynes (1883–1946)," in Ten Great Economists (London: George Allen
& Unwin, 1952).
Utsa Patnaik is Professor Emerita at the Centre for Economic Studies and Planning,
Jawaharlal Nehru University, New Delhi. Her books include Peasant Class Differentiation (1987),
The Long Transition (1999), and The Republic of Hunger and Other Essays (2007). Prabhat Patnaik
is Professor Emeritus at the Centre for Economic Studies and Planning, Jawaharlal Nehru
University, New Delhi. His books include Accumulation and Stability Under Capitalism (1997),
The Value of Money(2009), and Re-envisioning Socialism(2011).
"... The real unemployment rate is probably somewhere between 10%-12%. ..."
"... The U-6 also includes what the labor dept. calls involuntary part time employed. It should include the voluntary part time as well, but doesn't (See, they're not actively looking for work even if unemployed). ..."
"... But even the involuntary part time is itself under-estimated. I believe the Labor Dept. counts only those involuntarily part time unemployed whose part time job is their primary job. It doesn't count those who have second and third involuntary part time jobs. That would raise the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and 'missing labor force' is grossly underestimated. ..."
"... The labor dept. also misses the 1-2 million workers who went on social security disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment insurance. That number rose dramatically after 2008 and hasn't come down much (although the government and courts are going after them). ..."
"... The way the government calculates unemployment is by means of 60,000 monthly household surveys but that phone survey method misses a lot of workers who are undocumented and others working in the underground economy in the inner cities (about 10-12% of the economy according to most economists and therefore potentially 10-12% of the reported labor force in size as well). ..."
"... The SSDI, undocumented, underground, underestimation of part timers, etc. are what I call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%. ..."
The real unemployment rate is probably somewhere between 10%-12%. Here's why: the 3.7% is
the U-3 rate, per the labor dept. But that's the rate only for full time employed. What the
labor dept. calls the U-6 includes what it calls discouraged workers (those who haven't looked
for work in the past 4 weeks). Then there's what's called the 'missing labor force'–i.e.
those who haven't looked in the past year. They're not calculated in the 3.7% U-3 unemployment
rate number either. Why? Because you have to be 'out of work and actively looking for work' to
be counted as unemployed and therefore part of the 3.7% rate.
The U-6 also includes what the labor dept. calls involuntary part time employed. It
should include the voluntary part time as well, but doesn't (See, they're not actively looking
for work even if unemployed).
But even the involuntary part time is itself under-estimated. I believe the Labor Dept.
counts only those involuntarily part time unemployed whose part time job is their primary job.
It doesn't count those who have second and third involuntary part time jobs. That would raise
the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and
'missing labor force' is grossly underestimated.
The labor dept. also misses the 1-2 million workers who went on social security
disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment
insurance. That number rose dramatically after 2008 and hasn't come down much (although the
government and courts are going after them).
The way the government calculates unemployment is by means of 60,000 monthly household
surveys but that phone survey method misses a lot of workers who are undocumented and others
working in the underground economy in the inner cities (about 10-12% of the economy according
to most economists and therefore potentially 10-12% of the reported labor force in size as
well). The labor dept. just makes assumptions about that number (conservatively, I may
add) and plugs in a number to be added to the unemployment totals. But it has no real idea of
how many undocumented or underground economy workers are actually employed or unemployed since
these workers do not participate in the labor dept. phone surveys, and who can blame them.
The SSDI, undocumented, underground, underestimation of part timers, etc. are what I
call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%.
Finally, there's the corroborating evidence about what's called the labor force
participation rate. It has declined by roughly 5% since 2007. That's 6 to 9 million workers who
should have entered the labor force but haven't. The labor force should be that much larger,
but it isn't. Where have they gone? Did they just not enter the labor force? If not, they're
likely a majority unemployed, or in the underground economy, or belong to the labor dept's
'missing labor force' which should be much greater than reported. The government has no
adequate explanation why the participation rate has declined so dramatically. Or where have the
workers gone. If they had entered the labor force they would have been counted. And their 6 to
9 million would result in an increase in the total labor force number and therefore raise the
unemployment rate.
All these reasons–-i.e. only counting full timers in the official 3.7%;
under-estimating the size of the part time workforce; under-estimating the size of the
discouraged and so-called 'missing labor force'; using methodologies that don't capture the
undocumented and underground unemployed accurately; not counting part of the SSI increase as
unemployed; and reducing the total labor force because of the declining labor force
participation-–together means the true unemployment rate is definitely over 10% and
likely closer to 12%. And even that's a conservative estimate perhaps." Join the debate on
Facebook More articles by: Jack Rasmus
Jack Rasmus is author of the recently published book, 'Central Bankers at the End of
Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He blogs
at jackrasmus.com and his twitter handle
is @drjackrasmus. His website is http://kyklosproductions.com .
The motivator is " Gap
Psychology ," the human desire to distance oneself from those below (on any scale), and
to come nearer to those above.
The rich are rich because the Gap below them is wide, and the wider the Gap, the richer
they are .
And here is the important point: There are two ways the rich widen the Gap: Either gain
more for themselves or make sure those below have less.
That is why the rich promulgate the Big Lie that the federal government (and its agencies,
Social Security and Medicare) is running short of dollars. The rich want to make sure that
those below them don't gain more, as that would narrow the Gap.
Negative sum game, where one wins but the other has to lose more so the party of the first
part feels even better about winning. There is an element of sadism, sociopathy and a few
other behaviors that the current systems allow to be gamed even more profitably. If you build
it, or lobby to have it built, they will come multiple times.
Shibboleths falling left and right ... how soon before some 'free' trade fundamentalists like
Krugman finally come around to acknowledging that it was all laissez-faire rebranded as
'free' trade? It was all about cheap labor, property rights, profits, and avoiding taxes and
paying for externalities ... pure laissez-faire... stuff that Krugman and his ilk refuse to
address or rectify in their corporatist columns lauding 'free' trade.
Exactly, problem is that many Democrats remain totally loyal even though the party switched
directions 30 years ago and these gullible folks have yet to figure out that the New
Democrats incorporated the policies of Bush 41 Republicans while trying to maintain a fake
veneer of FDR.
Economy Adds 164,000 Jobs in July, Employment Rate Hits New High for Recovery
By Dean Baker
Total hours in manufacturing is down by 0.2 percent over the last year.
The Bureau of Labor Statistics reported that the economy added 164,000 jobs in July, with
the employment-to-population ratio (EPOP) inching up to 60.7 percent, a new high for the
recovery. The unemployment rate was unchanged at 3.7 percent. There were downward revisions
of 41,000 to the prior two months' data, bringing the average rate of job growth for the last
three months to 140,000.
The big job gainers in July were professional and technical services, which added 30,800
jobs, and health care, which added 30,400 jobs. The former is slightly above the 25,000
average of the last 12 months, while the latter is somewhat below the average of 33,800.
The goods-producing sector fared poorly in July. Mining and logging lost 5,000 jobs. Coal
mining was especially hard hit, losing 800 jobs, which is 1.5 percent of employment in the
industry. Construction added just 4,000 jobs, well below its average of 16,800 over the last
year.
Manufacturing added 16,000 jobs, slightly above its average gain of 13,100, but this was
accompanied by a decline of 0.3 hours in the length of the average workweek. The index of
aggregate hours in manufacturing is now down by 0.2 percent over the last year. For
production workers, it is down by 0.7 percent.
Manufacturing wages have also lagged. The average hourly wage is up just 2.5 percent over
the last year. With the decline in hours, the average weekly wage in manufacturing is up just
1.0 percent over the last year.
Restaurants added 15,400 jobs, down from an average of 21,100 over the last year. Hotel
employment fell by 5,200, possibly reflecting the drop in foreign tourism. Retail employment
fell 3,600, bringing its drop to 59,900 (0.4 percent of total employment) over the last
year.
Employment in insurance jumped 11,400 in July, compared to an average of just 2,800 over
the last year. There was also an anomalous jump in local education employment of 11,700,
likely reflecting changes in the timing of the school year.
Year-over-year wage growth was up slightly at 3.2 percent, but the annualized rate of wage
growth comparing the last three months (May, June, July) with prior three months (February,
March, April), is just 2.8 percent.
... ... ...
Involuntary part-time employment fell by 363,000 and is now well below its prerecession
share of employment. By contrast, voluntary part-time employment is lower in the first seven
months of 2019 than the year-round average for 2018. Voluntary part-time had jumped in 2014,
following the implementation of the ACA, as workers were no longer as dependent on employers
for health insurance. However, it is now falling as a share of total employment.
Another discouraging item is a drop of 0.9 percentage points in the share of unemployment
due to quits. The current 13.8 percent share is low given the 3.7 percent unemployment rate
and suggests workers are reluctant to quit jobs without a new job lined up.
On the whole, this is clearly a positive employment report. However, it does indicate job
growth is slowing and it is not clear that wage growth is picking up steam.
A legacy of 'free' trade deals, pitting US labor against slave labor abroad while the
profiteers stuck their windfall profits into tax havens offshore.
Lol, free trade my ass. US has been doing "free trade" since 1934. John, my advice, stop the
sheet. The entire goods part of the economy crested in 1979 and that has little to do with
trade, considering pre 1934 economy had vast inequality, even worse in some respect than now.
That is what happens when the rest of the world recovers from war. You either do free
trade and develop a financial stranglehold,, or socialize the means of production and consume
less.Your free lunch posts sicken me.
"Thus we see how the neoliberal utopia tends to embody itself in the reality of a kind of infernal machine, whose necessity imposes
itself even upon the rulers. Like the Marxism of an earlier time, with which, in this regard, it has much in common, this utopia
evokes powerful belief - the free trade faith - not only among those who live off it, such as financiers, the owners and managers
of large corporations, etc., but also among those, such as high-level government officials and politicians, who derive their justification
for existing from it.
For they sanctify the power of markets in the name of economic efficiency, which requires the elimination of administrative or
political barriers capable of inconveniencing the owners of capital in their individual quest for the maximisation of individual
profit, which has been turned into a model of rationality. They want independent central banks.
And they preach the subordination of nation-states to the requirements of economic freedom for the masters of the economy, with
the suppression of any regulation of any market, beginning with the labour market, the prohibition of deficits and inflation, the
general privatisation of public services, and the reduction of public and social expenses."
Excellent article, I agree.
As regards clear language and definitions, I much prefer Michael Hudson's insistence that, to
the liberal economists, free markets were markets free from rent seeking, while to the
neoliberals free markets are free from government regulation.
"As governments were democratized, especially in the United States, liberals came to endorse
a policy of active public welfare spending and hence government intervention, especially on
behalf of the poor and disadvantaged. neoliberalism sought to restore the centralized
aristocratic and oligarchic rentier control of domestic politics." http://michael-hudson.com/2014/01/l-is-for-land/
– "Liberal"
Does the New York Times Have an Editing Program that Automatically Puts "Free" Before
"Trade?"
By Dean Baker
Readers must be wondering because it happens so frequently in contexts where it is clearly
inappropriate. The latest example is in an article * about the state of the race for the
Democratic presidential nomination following the second round of debates.
The piece told readers:
"After a few candidates used the Detroit debate to demand that Mr. Biden account for Mr.
Obama's record on issues such as deportations and free trade, Mr. Biden was joined by some of
the former president's advisers, who chastised the critics for committing political
malpractice."
The word "free" in this context adds nothing and is in fact wrong. The Obama
administration did virtually nothing to promote free trade in highly paid professional
services, like physicians services, which would have reduced inequality. It only wanted to
reduce barriers that protected less educated workers, like barriers to trade in manufactured
goods.
And, it actively worked to increase patent and copyright protections, which are the
complete opposite of free trade. These protections also have the effect of increasing
inequality.
Given the reality of trade policy under President Obama it is difficult to understand why
the New York Times felt the need to modify "trade" with the adjective "free." Maybe it needs
to get this editing program fixed.
The Democratic leadership and their megaphones in the media refuse to consider the
possibility that 'free' trade deals had anything to do with rising income inequality and the
resentment that led to Trump's election. It's much easier to promote the notion that hapless
Hillary's loss could be pinned on Putin or on racism and to dismiss Trumps voters as hopeless
deplorables.
However, Dean Baker noted last week: "The basic point is a simple one that has a long
pedigree in economics dating back to the famous Stolper-Samuelson trade theorem. The United
States has relatively more highly-educated workers (college degree or more) than developing
countries and relatively fewer less-educated workers (less than a college degree). This means
that when we open trade to China and other developing countries, we would expect to see more
highly educated workers benefit and less highly educated workers lose.
We saw this story in action in the last decade in a really big way. From 2000 to 2007 we
lost 20 percent of all manufacturing jobs in the United States. (This is before the Great
Recession; the job loss was due to the explosion of the trade deficit in these years, not the
collapse of the housing bubble.) We lost 40 percent of the jobs held by union members in
manufacturing in these years.
It is important to remember that the Stolper-Samuelson prediction on non-college educated
workers being losers (roughly two-thirds of the labor force) is a balanced trade story. The
picture is of course worse when the U.S. runs a large trade deficit, since most of what we
import is manufactured goods, a sector which employs a disproportionate number of non-college
educated workers." http://cepr.net/blogs/beat-the-press/the-u-s-china-trade-war-will-workers-lose
This theory is bolstered by a Brookings report: In "The Decline of the U.S. Labor Share,"
authors Michael Elsby of the University of Edinburgh, Bart Hobijn of the Federal Reserve Bank
of San Francisco, and Aysegul Sahin of the Federal Reserve Bank of New York find that the
decline of the labor share, which has been driven by a decline in the share of payroll
compensation in national income over the last 25 years, is likely due to the offshoring of
the labor-intensive component of the US supply chain. https://www.brookings.edu/bpea-articles/the-decline-of-the-u-s-labor-share/
Back in 1992 many Democrats opposed NAFTA, but Bill Clinton triangulated with Republicans
to get it passed. Then Clinton signed China PNTR, granting China full access to WTO,
whereupon the great sucking sound of jobs going to China began at full throttle.
It was a neat trick that Republicans played--let Democrats take the fall for the eventual
unpopularity and resulting resentment for the adverse effects of 'free' trade. Surprisingly
enough, the corrupt, sclerotic Team Pelosi still embraces 'free' trade, basically serving up
the Rust Belt to Trump on a silver platter.
And people who should know better, think Krugman, still find little to criticize about the
way 'free' trade was implemented, despite rising inequality and right-wing populism that it
engendered. Back in 2000 Krugman even had the chutzpah to claim that 'free' trade would be
good for labor! Such behavior tends to beg the question of whose side the Democratic
leadership and Krugman and his ilk are really on hint: Wall Street really loves 'free'
trade.
The political economic establishment is replete with diverse but largely complementary
motives. Global humanists raise the standard of living in poor countries while wealthy
capitalists collect rents from the arbitrage of lower standards of living in poor countries.
Establishment elites all have their price, but not all have the same price.
Yet, diverse elites hanging out together is more fun than a backyard barbeque with factory
workers no matter how good the barbeque and coleslaw is. Coleslaw does not pair well with
caviar, at least not real caviar, the kind made of fish roe. Cowboy and cowgirl caviar is
another thing entirely, pairing well with barbeque and coleslaw as long as you have some
tortilla chips too.
It is a rainy day here today and I have not had brunch yet.
"Global humanists raise the standard of living in poor countries "
maybe b/c it takes very little to raise up the global poor, but have you seen what
happened in Greece and Puerto Rico?
These places like Mexico should have moved to first world status after the Cold War ended
but are still stuck and getting worse.
I think the global situation is more of a mixed back. Countries are going authoritarian
b/c of neoliberalism: Putin, Turkey, Trump, Brexit, Hungary, etc.
I like to say about immigrants and refugees. At least the jobs they're working are here
and not in China. Which means they're spending the money they earn here and not in China.
'Free' trade was not advertised as being a zero sum game. It was supposed to have been an
example of large benefits and small losses on both sides.
However, the way it was designed by those who designed it (chiefly multi-nationals), the
enormous benefits got captured by a small minority, while a large majority suffered losses,
at least in the United States.
Sad to see that the 'free' trade zealots still refuse to do anything constructive to
mitigate the losses, or even acknowledge that there were major adverse effects and so we have
Trump as a result
Yes, indeed. Multinational corporations perversely redefined comparative advantage to mean
global arbitrage opportunities against labor and regulatory standards. Low wages buy poison
air and water while corporations just collect the rents.
"Yes, indeed. Multinational corporations perversely redefined comparative advantage to mean
global arbitrage opportunities against labor and regulatory standards. Low wages buy poison
air and water while corporations just collect the rents."
Which corporations exactly have or are extracting high rents from pollution in China or
India or Africa in ways that have not profited you personally?
The only big rent seeker related to pollution are big oil, and its been the opposition to
a high carbon tax in the US that's failed to drive out pillage and plunder rents.
If Trump were true to his rhetoric, his first tariff would have been $50 a barrel on
imported oil based on Saudi Arabia taking advantage of stupid Americans, getting rich selling
US oil and then forcing US to spend trillions waging wars to protect Saudi rent extraction
screwing Americans.
China, in contrast, has built so much capital, it's destroyed most global corporate rent
seeking. China is, as a national policy, determined to bankrupt big oil, Saudi Arabia,
etc.
China is "stealing" US corporate monopoly power by creating competing corporations which
price at costs, ie, at zero rent.
Some argue that hiring employees of US global corporations is theft.
But that was something that corporations in California accused each other of doing in the
90s.
And something employers did as industry rose in the US, leading to company towns, and
goons to prevent workers from stealing from their employer by setting themself up in business
based on their unique skills and knowledge honed by working for big business.
Eg, Tesla "stealing" from Edison by going to work for Westinghouse.
US businesses invented golden handcuffs in the era defined by IBM. It was California that
challenged the golden handcuff corporate establishment.
What did these Californians promise? Wealth from high rent extraction.
But China has destroyed that California rent extraction gravy train as a means of stealing
from each other.
Chinese Apple suppliers face toxic heavy metal water pollution charges
Foxconn denies allegations, Apple reiterates zero-tolerance stance
By Rik Myslewski 5 Aug 2013 at 18:54
Chinese environmental regulators have launched an investigation into two Apple suppliers
– one being the giant iDevice assembler Foxconn – in response to allegations that
the companies' factories are using nearby rivers as dumping grounds for huge amounts of toxic
heavy metals.
"If you're severely exceeding emissions standards, then we will punish you," Chinese
environmental regulator Ding Yudong told The Wall Street Journal, speaking of the
investigations into Foxconn and UniMicron.
Both companies are based in Taiwan, are listed among Apple's suppliers, and have
manufacturing plants in mainland China. The factories in question are in the industrial area
of Kushan, located between Shanghai and Suzhou.
According to the WSJ, the investigations were sparked by allegations from Chinese activist
and 2012 Goldman Environmental Prize winner Ma Jun, a director of China's Institute of Public
& Environmental Affairs (IPE).
Four other environmental groups joined the IPE in accusing Foxconn and UniMicron of
dumping heavy metals into the Huangcangjing and Hanputang rivers. Those two rivers flow into
the Yangtze and Huangpu rivers, which supply Shanghai with drinking water.
Foxconn has denied the charges, telling Bloomberg that its Kushun factory follows all
applicable environmental regulations. Plant manager Yang Jixian was said much the same,
according to China's Xinhua News Agency. UniMicron remains mum.
Apple spokeswoman Kitty Potter told Bloomberg, "We do not tolerate environmental
violations of any kind and regularly audit our suppliers to make sure they are in
compliance."
The WSJ interviewed a few Kushan locals about the levels of pollution in nearby rivers.
One, Zhao Pingxing, said, "We used to catch cuttlefish there, and it was so clear we could
see a meter down," he said – and told the WSJ that although he occasionally fishes
there these days, he doesn't eat what he catches.
Another, identified only by his surname Yao, said, "Even if my hands were dirty, I
wouldn't wash them in this water."
That water, however, is second in line in China's environmental cleanup plans. Late last
month, the Middle Kingdom announced that it would spend $277bn on an effort it's calling the
Airborne Pollution Prevention and Control Action Plan in response, no doubt, to such events
as the choking "Airpocalypse" that blanketed the Beijing area this January.
Water pollution, however, is on the Chinese government's list for cleanup efforts over the
next five years, according to China Daily. Perhaps after that program begins, the regulations
that Foxconn, UniMicron, and others will face will be more stringent, Zhao will be able to
eat his fish, Yao will be able to wash his hands, and Potter will no longer have to issue
canned "We do not tolerate environmental violations" statements.
*
[US firms can collect rents just by sourcing from Chinese firms that pay low wages and
pollute just as well as they can exploit their hands-on partnerships. Rents laundered at arms
length are no less destructive to either exploited workers or displaced workers. Most
partnerships between Chinese and US firms places the direct exploitation in Chinese hands
while most of the rents go to US firms.
I got the money, honey, if you got the crime.]
Rising returns to US capital demonstrate that the rentier is far from dead. ]
I'm reading aboout US coal companies declaring bankruptcy to shed their mine reclamation
costs, while already having shed hundreds of billions in coal pollution from mining
techniques since circa 1980, plus coal ash pollution, also largely since the 80s.
The US has burned coal for two centuries, but swag, 40% of the coal burned in the US has
been since the passaage of tthe clean water and clean air acts.
China has acted several times faster, and punished pollution violations much harsher, than
the US, England, ....
Understood, but when I refer to pollution then I am not just referring to CO2 or even
primarily CO2 or even CO2 at all. Anthropogenic climate change is a much different beast that
biological and chemical pollutants that poison the water and air. We are all dying slowly
anyway and at least we will not be lying cold in the ground.
Don't get me wrong though. I have long believed that climate change poses a serious threat
and possibly even an existential risk to much of humanity. OTOH, semantics prevents me from
lumping a dangerous excess of otherwise beneficial and necessary atmospheric compounds
together with pathogens. We breath out CO2 and plants make sugar from it using
photosynthesis. It is an essential part of the nature of living things.
I agree on all of this - however, I don't think that the way to solve this is by destroying
free trade. Instead, fix the distributional and environmental issues and redistribute the low
marginal utility $.
You are most likely correct to the extent that anything at all will be done to correct for
the use of trade as a tool of financial arbitrage in global labor and pollution markets.
OTOH, in some far distant time that may not be as far off as we would like to think, the
economy of localization of production will reassert itself against greatly rising
transportation costs. Of course, that will not happen all at once and it will come about in
move to optimize transportation of goods to market and resources to production that will be
accompanied by much substitution in production and consumption.
However, the world would have been better off if developed nations would have shared their
capital assets with developing nations to the ends of optimizing transportation and expanding
product development around the world from the get go. We once had the opportunity to make a
better world, but now we are faced only with the opportunity to survive the world that we
made instead - or not.
"Free' trade was not advertised as being a zero sum game. It was supposed to have been an
example of large benefits and small losses on both sides."
You are clearly very right wing in demanding a billion dollars in benefits at a dollar in
costs because you reject zero sum as a hard rule in all trade, whether in a store, a
community, within a nation, and between nations.
West Virginia has suffered, not from global trade, but because of local trade. Global
trade has slowed its economic decline because it can produce met coal which costs customers
ten times steam coal.
US policies that are supoosedly to cut costs, increased "costs" to WV workers, by killing
their jobs, which is a lower cost requiring lower benefits, eg less income to keep paying
higher living costs. Cutting living costs is not a good thing when its forced on you by lower
incomes.
If the US economic policy was to hike costs, say hiking taxes, fees, tolls, fares to pay
to build better transportation capital, then demand for steel in the US would be so high that
WV would be mining several times as much met coal, which costs consumers ten times as much as
steam coal.
"However, the way it was designed by those who designed it (chiefly multi-nationals), the
enormous benefits got captured by a small minority, while a large majority suffered losses,
at least in the United States."
Strange you consider at least 250 million Chinese workers to be a minority relative to a
much smaller number of American workers who are worse off from the left and right worship of
cutting living costs.
Zero sum is axiomatic, so lower living costs means lower benefits, especially lower wages.
High wages are a costly benefit that increase living costs.
"Global humanists raise the standard of living in poor countries while wealthy capitalists
collect rents from the arbitrage of lower standards of living in poor countries.
Establishment elites all have their price, but not all have the same price."
But as a "global humanist", the goal is to raise the living costs of poor nations up to
the living costs of say the US in 1950 in two generations instead of the maybe five
generations it took the US to get to 1950 living costs.
The only way to increase living costs is some agency which pays more workers more money to
work more. In the US, the agents were the railroad building from 1840 to 1990, the good roads
building fromm1920 to 1970, the lifting of education standards from 8th grade circa 1920 to
14th grade by 1970.
What confuses conservatives is the concept of price and cost. A lower price increases
costs. The current cost of going to the moon is zero because the price to send the first
person to the moon since 1972 is at least $10 billion, and a realistic business plan sets the
cost at $25-50 billion. A price of $10 million to go to the moon and return a year later will
result in massive increased costs to humans who pay the lower price of living on the moon for
an extended time.
Global trade increases living costs for poor people in order to improve their lives. But
increasing their living standard requires paying them to work produce more of somethings than
they can possibly consume, which is then sold to nations capable of producing more high cost
and price items than the global economy can afford.
For the US to be able to produce 10 billion bushels of grain when the global market is
only able to pay for 8 billion is a big problem. The pre-globalization solution was to kill
jobs in poor naations by the US government dumping grain on poor nations at a price of
zero.
Would you advocate isolationism that creates a great depression, a la the 20s and 30s US
economic policies. No exports, no trade, thus forcing costs down as prices are forced down
with higher and higher unemployment?
"... government for the centre ground has been about management- the days when the US New Deal funded by taxing the rich and which built the wealth Americans now miss, and the Labour post war government that built the NHS [and taxed the rich] is part of history. Instead we have no new innovation but a little bit of tweaking with banks and global business. ..."
"... In return the gutted communities become less smart and given bread and circuses but their privilege and lack of mobility means they don't travel to pick fruit elsewhere- yet they still demand food on the table and the only ones prepared to travel and work hard are the even greater poor. ..."
It wasn't just free trade that the white working class voters of the rust belt states were
angry about, it was also high immigration. Naomi doesn't mention this, probably because fluid
borders is one policy which the Davos class and left-liberals like herself agree on.
Such a[n intersection left] coalition is possible. In Canada, we have begun to cobble it
together under the banner of a people's agenda called The Leap Manifesto, endorsed by more
than 220 organisations from Greenpeace Canada to Black Lives Matter Toronto, and some of
our largest trade unions.
And if such a coalition of the usual suspects got off the ground in the USA it would just
about seal a second term for Donald.
government for the centre ground has been about management- the days when the US New Deal
funded by taxing the rich and which built the wealth Americans now miss, and the Labour post
war government that built the NHS [and taxed the rich] is part of history. Instead we have no
new innovation but a little bit of tweaking with banks and global business.
No government wants to upset the powers that run the economy- so a multinational can move
its workforce to a country with lower pay, lower environmental regulation- it can use the
inequality to move not only manufacturing but people.
In return the gutted communities become less smart and given bread and circuses but their
privilege and lack of mobility means they don't travel to pick fruit elsewhere- yet they
still demand food on the table and the only ones prepared to travel and work hard are the
even greater poor.
And the right simply blames the immigrants, the others and you believe them.
don't stop at 2011, the precedent started in 1934 in Nuremberg Germany. Trump used the
same how to manual written by Goebbels, he got the idea from the Romans.
"... The idea of the 'American dream' seems to have morphed into a nasty belief that if you're poor it's your own fault. You didn't 'want it enough'. You must be secretly lazy and undeserving, even if you're actually working three jobs to survive, or even if there are no jobs. ..."
"... It always seems very odd to me that so many people who think like that profess to be Christian. 'Poverty equals moral failure' is the complete opposite of what Jesus Christ got into so much trouble for saying. ..."
The idea of the 'American dream' seems to have morphed into a nasty belief that if
you're poor it's your own fault. You didn't 'want it enough'. You must be secretly lazy and
undeserving, even if you're actually working three jobs to survive, or even if there are no
jobs.
This view has taken hold in the UK too, where the tabloids peddle the view that anyone who
claims state benefits must be a fraud. But at least, people here and in mainland Europe have
the direct experience of war within living memory and we understand that you can lose
everything through no fault of your own. In the US, even when there's a natural disaster like
Katrina it seems to be the poor people's fault for not having their own transport and money
to go and stay somewhere else.
It always seems very odd to me that so many people who think like that profess to be
Christian. 'Poverty equals moral failure' is the complete opposite of what Jesus Christ got
into so much trouble for saying.
"... Both neoliberal-driven governments and authoritarian societies share one important factor: They care more about consolidating power in the hands of the political, corporate and financial elite than they do about investing in the future of young people and expanding the benefits of the social contract and common good. ..."
"... Michael Yates (economist) points out throughout his book 'The Great Inequality', capitalism is devoid of any sense of social responsibility and is driven by an unchecked desire to accumulate capital at all costs. As power becomes global and politics remains local, ruling elites no longer make political concessions to workers or any other group that they either exploit or consider disposable. ..."
"... At bottom, neoliberals believe in a social hierarchy of "haves" and "have nots". They have taken this corrosive social vision and dressed it up with a "respectable" sounding ideology which all boils down to the cheap labor they depend on to make their fortunes. ..."
"... The ugly truth is that cheap-labour conservatives just don't like working people. They don't like "bottom up" prosperity, and the reason for it is very simple. "Corporate lords" have a harder time kicking them around. ..."
Both neoliberal-driven governments and authoritarian societies share one important factor:
They care more about consolidating power in the hands of the political, corporate and
financial elite than they do about investing in the future of young people and expanding the
benefits of the social contract and common good.
Michael Yates (economist) points out throughout his book 'The Great Inequality', capitalism
is devoid of any sense of social responsibility and is driven by an unchecked desire to
accumulate capital at all costs. As power becomes global and politics remains local, ruling
elites no longer make political concessions to workers or any other group that they either
exploit or consider disposable.
At bottom, neoliberals believe in a social hierarchy of "haves" and "have nots". They have
taken this corrosive social vision and dressed it up with a "respectable" sounding ideology
which all boils down to the cheap labor they depend on to make their fortunes.
The ugly truth is that cheap-labour conservatives just don't like working people. They
don't like "bottom up" prosperity, and the reason for it is very simple. "Corporate lords"
have a harder time kicking them around.
Once you understand this about the cheap-labor
conservatives, the real motivation for their policies makes perfect sense. Remember,
cheap-labour conservatives believe in social hierarchy and privilege, so the only prosperity
they want is limited to them. They want to see absolutely nothing that benefits those who
work for an hourly wage.
You also need to remember that voting the coalition out, which you need to do, will not
necessarily give you a neoliberal free zone; Labor needs to shed some the dogma as well.
The Sham
of Shareholder Capitalism
Posted on
June 24, 2019
by
Yves
Smith
Yves here. While Richard Murphy makes some important points in his post, he unwittingly implies that
shareholder capitalism could work as advertised absent the way investors lose ownership rights when they
acquire stock through pooled vehicles.
In fact, the choice that legislators and regulators made to promote
liquidity in stock markets inevitably resulted in weak governance.
From a 2013 post
:
Amar Bhide, now a professor at the Fletcher School and a former McKinsey consultant and later proprietary
trader, questions the policy bias towards more liquidity in financial markets. Officials (and of course
intermediaries) favor it because they lower funding costs. Isn't cheaper money always better? Bhide argues
that it can come with hidden costs, and those costs are sometime substantial.
He first took up the argument in a 1993 Harvard Business Review article, "Efficient Markets, Deficient
Governance." Its assessment was pretty much ignored because it was too far from orthodox thinking. He
started with some straightforward observations:
US rules protecting investors are the most comprehensive and well enforced in the world .Prior to the
1930s, the traditional response to panics had been to let investors bear the consequences The new
legislation was based on a different premise: the acts [the Securities Act of 1933 and the Securities and
Exchange Act of 1934] sought to protect investors before they incurred losses.
He then explained at some length that extensive regulations are needed to trade a promise as ambiguous as
an equity on an arm's length, anonymous basis. Historically, equity investors had had venture-capital-like
relationships with the owner/managers: they knew them personally (and thus could assess their character),
were kept informed of how the businesses was doing. At a minimum, they were privy to its strategy and plans;
they might play a more active role in helping the business succeed.
By contrast, investors in equities that are traded impersonally can't know all that much. A company can't
share competitively sensitive information with transient owners. Stocks are also more liquid if ownership is
diffuse, which makes it harder for any investor or even group of investors to discipline underperforming
managers. It's much easier for them to sell their stock and move on rather than force changes. And an
incompetent leadership group can still ignore the message of a low stock price, not just because they are
rarely replaced, but also because they can rationalize the price as not reflecting the true state of the
company compared to its competitors, which is simply not available to the public.
Bhide's concern is hardly theoretical. The short term orientation of the executives of public companies,
their ability to pay themselves egregious amounts of money, too often independent of actual performance,
their underinvestment in their businesses and relentless emphasis on labor cost reduction and headcount
cutting are the direct result of anonymous, impersonal equity markets. Many small businessmen and serial
entrepreneurs hold the opposite attitude of that favored by the executives of public companies: they do
their best to hang on to workers and will preserve their pay even if it hurts their own pay. Stagnant worker
wages and underemployment are a direct result of companies' refusal to share productiivty gains with
workers, and that dates to trying to improve the governance problems Bhide discussed by linking executive
pay to stock market performance. That did not fix the governance weaknesses and created new problems of its
own.
An issue that we've also discussed regularly is that the idea that companies are to be operated for the
benefit of shareholders is an idea made up by economists with no legal foundation. Equity is a weak and
ambiguous claim: you get a vote on some matters, you get dividends if we make money and even then if we feel
like it, and we can dilute your interest at any time. Equity is a residual claim, the last in line after
everything else is taken care of.
By Richard Murphy, a chartered accountant and a political economist. He has been
described by the Guardian newspaper
as an "anti-poverty campaigner and tax expert". He is Professor of
Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a
non-executive director of
Cambridge
Econometrics
. He is a member of the
Progressive
Economy Forum.
Originally published at
Tax Research UK
The FT
published a report
last week that commented on an important issue. That is the collapse of shareholder
capitalism.
The issue is a simple one to summarise. Apparently about two thirds of all private owners of quoted shares
in the UK now own their shares through nominee pooled funds. As such they are not recorded as the legal owners
of these shares. They have no voting rights. And no right to attend shareholder meetings. They don't even have
the right to accounts. And they have given an institution, who does not own the shares in reality, the right to
exercise their vote in the company.
This matters for a number of reasons.
First, this makes a mockery of shareholder capitalism. The company has no idea who its shareholders are. And
it is wholly unaccountable to them. The idea that somehow shareholders are at the centre of corporate concern
is shown to be a sham, yet again, by this.
Second, this undermines audit. Bizarrely, audit reports are still addressed to shareholders. What is
apparent is that many do not get them. No wonder auditing is becoming so removed from reality.
Third, this breaks down any pretence that there is effective corporate governance. There cannot be when many
company members are disenfranchised.
Fourth, the concentration of power in the hands of passive nominee owners reinforces the control of a small
ruling elite in quoted businesses, who are insulated by this arrangement from any real accountability whilst
being able to pretend that it exists.
Fifth, this means tax fraud can be much more easily disguised.
And lastly, it shows the owners of shares just don't care and so are not the custodians for business that we
need.
In essence, we have a form of capitalism that claims to be for shareholders and yet that is clearly a sham.
No wonder it is not working.
Most shareholders lack the savvy to fuss over board member actions. So, today we have
mutual fund
manager capitalism
. It might work better. If I own 100 shares, who cares? If I own 1,000,000 shares,
board's better listen. Now if we can only get our mutual funds to kick ass about abuses like bonuses for
failure, worker abuse, etc.
Activist fund managers? Nope. Several years ago, and despite pointing out that high executive
compensation injures shareholder value, I was told that there is no interest in voting shares to limit
compensation of executives.
Fourth, the concentration of power in the hands of passive nominee owners reinforces the control of
a small ruling elite in quoted businesses, who are insulated by this arrangement from any real
accountability whilst being able to pretend that it exists.
Those nominee owners don't seem all that passive. Pay no attention to that man behind the curtain.
"Warren Buffett is the largest shareholder in Coke with a 9.1% stake in the business. He had abstained
from voting through the original pay guidelines, saying at the time "I could never vote against
Coca-Cola, but I couldn't vote for the plan either."
So much for investor activism on Buffett's part.
The article is titled "Warren Buffett Wins A Battle Against Coca-Cola's Plan To Pay Its Bosses $13
Billion" even though Buffett could not find his way to actually vote AGAINST the pay package and
abstaining simply means one's vote isn't counted.
If independently wealthy Buffett cannot find the courage to vote against a pay package he finds
egregious, one wonders if other fund managers, of lower independence and wealth will show much activism
in bucking corporate management.
Coase's theorem isn't a theorem -- and it's not even right! Worshipping liquidity so that equilibrium models
fit (which is backwards, right?) is insane. Coase is a religion, not a scientific model (and definitely not a
theorem).
And these kind of things show how bad an equilibrium analysis is of economic systems. Even the tiniest bump
in the manifold, and you get turbulence which can lead to storms. Dumping liquidity into a turbulent system and
you get more turbulence (which eventually becomes self-sustaining structures in the face of the very even flow
you were trying to create )
I mis-read the lead as "The Sham
e
of Shareholder Capitalism". Whatever happened to corporations
that had responsibilities/commitments to anything besides shareholders? Since said shareholders are, in effect,
absentee landlords, executives are running the game for what? Their own benefit? I'm shocked, shocked I tell
you.
The major shareholders, mostly the CEO, CEO et al, are there to feather their own nest. While the right
wingers repeat that the corporation should take care of shareholder interest, they actually mean these majority
shareholders, who loot the corporation for their own benefit.
I've always been struck by one contradiction inherent in the pooled fund model, with its customary emphasis
on performance relative to indices or comparable funds. If an extremely large mutual fund goes underweight a
listed stock (relative to its target benchmark index or the competition) you could easily end up with the
largest holder of that stock having a financial interest in the stock's underperformance.
A theoretical economic justification for almost any aspect of large scale capitalism is prima facie
ridiculous. Like everything else, capitalism is a game of power and although it's pleasant to dream about
countervailing power being held by consumers, investors, competitors and employees, the only enduring form of
resistance to CEO governance is government. Unfortunately, the part of government that has been charged with
controlling the corporation has been AWOL for a long, long time. The Democrats, the supposed champion of
everyone who is not a CEO have long ago crossed the line and serve the other side (hopefully, prayerfully, with
some exceptions).
Just as an exercise that might shed light on the effectiveness of the funds (hedge & mutual)
ability/willingness to constrain the CEOs, it would be interesting to know how frequently these funds put forth
any resistance to debt funded stock buy backs, which, at least temporarily, enhance the funds' holdings.
Liquidity. Without it the system doesn't work and is prone to freezing up. So naturally, shareholders looked
like liquidity incarnate in 1990. Liquidity made more urgent by all the mismanagement of the economy and the
inability to understand and control inflation; Paul Volker's rate hike. And to make those nominee funds look
like honest business Milton Friedman began to tout shareholder rights and values. It makes sense – how it all
happened. I remember thinking, What happened to good old fashioned capitalism? more than once. This went hand
in hand with the new and improved MBA, preferably from Harvard and the valuation of efficiencies that were
short sighted and superficial. How many corporations got rid of their excess baggage, fired all their old
hands, hired new managers, etc? Then off-shoring. It amounted to decimation in order to free up liquidity –
sounds like an oxymoron now. It was based on nothing more than optimism. Which to my thinking runs sorta
parallel to ponzi. It was inevitable that shareholder capitalism was used as an excuse for tax loops and fraud.
Agents, "nominee funds", are happily removed from reality. It became open season for private equity, money
laundering, whatever. Liquidity became synonymous with profit taking. All those equities were "ambiguous
promises " which were nothing more than "residual claims" offered by nominee proxies offering no good corporate
governance. So the question pops up, What happens now that liquidity has blown itself up? Its fitting that all
the central banks are infusing money into the system as fast as they can because they must balance out the
massive inequality that occurred – even though that money isn't getting to the right party. It's so beyond
nuts. How do we make things work again? And so to the point – what does a share really mean – does it carry
both rights and obligations?, what does it mean to be a shareholder and what are the corporate obligations to
shareholders and to society? -to labor (therefore to management and good corporate governance). All those
questions just got left in the dust.
Until 1982 it was illegal for a company to borrow money in order to buy back their own shares. Il-Le-Gal.
Because it was so obviously share price manipulation by insiders.
Just reinstate that, and clean up shareholder options issuance while you're at it.
Result? Share prices would more accurately reflect the company's financial performance. You remember that
stuff: things like earnings per share, market share, new product launches, cost containment. Good governance
would follow.
Instead what we have today is just one big casino, run for the benefit of insiders.
Very grateful for this bit of rare clarity about financial intermediaries and the games they play.
Back in the beginning of joint-stock companies everyone knew they were dodgy investments run by dodgy
people. You put only a small amount of your capital in them and the bulk in government stock.
Now they have bought the protection they need, secured limited liability for their acts and got a corrupt
Treasury to enact that a company is a person. Speaks volumes about our political representatives.
A sensible article from the viewpoint of one outside looking in. But as I see it Murphy is still living in
the 19th Century.
Me? I'm retired and have $100,000 to invest for an income to sustain me. I can invest that $100,000 in one
company, pore over its accounts, watch its director's every move and snap at their heels if I don't think I'm
getting the return I should be. Of course if it's a $1billion company my snapping isn't going to have much
effect. And if the Company goes under I've lost my retirement savings.
Or I could invest $10,000 in ten companies. I'd have to choose the ten, of course, on the basis of public
information and wouldn't be able to scrutinize them all equally, and my stake would make my snapping at the
heels of the directors even less of a consideration. However I have only a 10% chance of a total loss, and a
10% chance of sharing any spectacular success.
Or I could put the $100,000 in a managed – or even a passive – fund. There I'd have less than a 1% loss if
the Company goes under and a return that should pretty much reflect what the general economy was doing. I'd
only get a tiny slice of any spectacular commercial successes, but that's the consequence of not gambling which
is what choosing to invest in one or two companies in fact is.
In short, for someone in retirement, pooled investment makes the best sense. And while I don't know the
actual figures I would be prepared to gamble a small amount that a considerable slice the total amount invested
in the stock market is 'owned' by the retired, or the sooner or later to be retired.
What has been very noticeable about the development of bureaucracy in the public and private
spheres over the last 40 years (since Thatcher govt of 79) has been the way systems are
designed now to place responsibility and culpability on the workers delivering the services -
Teachers, Nurses, social workers, etc. While those making the policies, passing the laws,
overseeing the regulations- viz. the people 'at the top', now no longer take the rap when
something goes wrong- they may be the Captain of their particular ship, but the
responsibility now rests with the man sweeping the decks. Instead they are covered by tying
up in knots those teachers etc. having to fill in endless check lists and reports, which have
as much use as clicking 'yes' one has understood those long legal terms provided by software
companies.... yet are legally binding. So how the hell do we get out of this mess? By us as
individuals uniting through unions or whatever and saying NO. No to your dumb educational
directives, No to your cruel welfare policies, No to your stupid NHS mismanagement.... there
would be a lot of No's but eventually we could say collectively 'Yes I did the right thing'.
Staff distress? Cleaning ( in another county) was privatised to make profit in Thatcher
times.The work of two cleaners became the task of one person. Extra duties were loaded on
-serving meals and drinks, fetching blankets and equipment. Wages dropped by a small degree
-but important when we ere earning, say, £65 a week. Indemnity/insurance against
catching infections was withdrawn. Firstly owned by Jeyes and then sold on to Rentokill
,obviously good for shareholders. A new 'manager' appeared with their own office.
'The left wing dialogue about neoliberalism used to be that it was the Wild West and that
anything goes. Now apparently it's a machine of mass control.'
It is the Wild West and anything goes for the corporate entities, and a machine of control
of the masses. Hence the wish of neoliberals to remove legislation that protects workers and
consumers.
As someone who thinks von Mises and Hayek made invaluable contributions to economics I was
surprised to see such a ringing endorsement for Mises's ideas in the Guardian:
"Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd."
That is spot on. Yes, Mises thought that workers should no more be allowed to corner a
market in labour than companies should be allowed to create monopolies in products, and this
is certainly a point where he can be criticized. Using the name "neoliberal" to cover
such very different ideas as Milton's and Hayek's though is absurd - they had completely
opposite ideas about vast government spending to recover from recession. Try looking up John
James Cowperthwaite, who oversaw post-war development in Hong Kong by getting government out
of the way.
He forbade the use of any performance targets of the type Blair brought in, and refused to
compile GDP statistics, thinking the government would game them.
Both von Mises and Hayek would be horrified at the money printing of modern central banks,
especially since 2008. To ascribe modern policy to their ideas is simply nonsense - they did
not (as far as I know) ever suggest central control of interest rates , stock buying by
central banks or saving a bank that has failed through fraud and greed.
If "neoliberalism" is our present dominant ideology, then please do not use the word to
describe their work.
As a matter of semantics, neo-liberalism delivered on the promise of freedom...for
capitalists to be free of ethical accountability, social responsibility, and government
regulation and taxes...
Finally. A writer who can talk about neoliberalism as NOT being a retro version of classical
laissez faire liberalism. It is about imposing "The Market" as the sole arbiter of Truth on
us all.
Only the 'Market' knows what is true in life - no need for 'democracy' or 'education'.
Neoliberals believe - unlike classical liberals with their view of people as rational
individuals acting in their own self-interest - people are inherently 'unreliable',
stupid.
Only entrepreneurs - those close to the market - can know 'the truth' about anything.
To succeed we all need to take our cues in life from what the market tells us.
Neoliberalism is not about a 'small state'. The state is repurposed to impose the 'all
knowing' market on everyone and everything. That is neoliberalism's political project. It is
ultimately not about 'economics'.
But the world didn't work like that, and the people who didn't fit had to be shoved
under the wheel of history.
This is a remarkably similar summation of Rand's worldview of entire classes of people: if
you are poor, you deserve it. Expect nothing from the State to raise you from the cycle of
poverty. The State is evil and should be eliminated. No evil can come from the Business
Culture (or more accurately the Business Cult). The U.S. Republican worldview summed up right
there.
The only sane response to Ayn Rand is the creation of the Human Values Project ,
where creating a better world for all is its manifesto and mandate.
Many thanks for the article. The Right keep erecting her on a pedestal and saying her
ideas are infallible like the Pope. She can't be pulled down off that pedestal enough
times.
"... Your claim is not that people decide rights via participation in political process (social contract), it is that there are universal natural individual rights that cannot be violated based in... something; there is no negotiability like there is with the social contract. Your apparantly foundationless rights cannot be changed by political process - so where do they come from? ..."
"... Your claim is that some quality of people grants immutable rights, not that rights are decided by people. Are you of the strain that thinks we should be allowed to starve our kids (Rothbard)? Or that non-capitalist societies are fair game to be killed and enslaved, to have thier land put to 'better' use (Locke)? Perhaps that latter one underlies the feeling that it would be easy to up sticks and move to some undefined piece of land. ..."
"... You have changed the nice things you listed now, you said maternity leave/pay, weekends, etc. Those were granted by collective potitical action, not the generosity of the capitalists. If Jeff Bezos could hire 1st graders he obviously would. ..."
"... The State is the gun. Always has been, always will be. And yes, there is a place for the gun in society - defence - but not in extorting money from peaceful people. ..."
Your claim is not that people decide rights via participation in political process (social
contract), it is that there are universal natural individual rights that cannot be violated
based in... something; there is no negotiability like there is with the social contract. Your
apparantly foundationless rights cannot be changed by political process - so where do they
come from?
Your claim is that some quality of people grants immutable rights, not that rights are
decided by people. Are you of the strain that thinks we should be allowed to starve our kids
(Rothbard)? Or that non-capitalist societies are fair game to be killed and enslaved, to have
thier land put to 'better' use (Locke)? Perhaps that latter one underlies the feeling that it
would be easy to up sticks and move to some undefined piece of land.
You have changed the nice things you listed now, you said maternity leave/pay, weekends,
etc. Those were granted by collective potitical action, not the generosity of the
capitalists. If Jeff Bezos could hire 1st graders he obviously would.
So you having to leave because you don't wamt to participate in tax paying is coercion,
but people having to leave because they don't want to live under Libertarianism isn't?
Incidentally, which countries at the top of the PISA or OECD rankings do not have massive
state education?
As for Hong Kong, its entire existence is predicated on extreme acts of aggression by the
British. The opium trade and its profits started the ball rolling after an aggressive war.
The Hong Kong authority also owns most of the land, leasing it; they therefore have massive
influence on who gets what and what they do with it - more so than most other nations.
"As you are free to leave, no individual state institution is is forcing you to
participate under pain of violence. If the fact you have no place to go that does not take
tax means that you are coerced, then someone who cannot live but by participation in
free-market capitalism would also be coerced into participation"
I think we won't agree on this because we have a fundamentally different understanding of
coercion. The way I see it, I should not have a leave the place I live in to not have
coercive action taking away my money. I should be able to say, no thanks. It is the
difference between my willingly purchasing something and a mugger taking my money at
gunpoint. The State is the gun. Always has been, always will be. And yes, there is a place
for the gun in society - defence - but not in extorting money from peaceful people.
And people can and do live without being part of the capitalist system. They can live off
the land. They can set up communes. They can use a barter system if they want. Capitalism
just gives people more opportunities, but they can opt out if they want. Or move to a place
that doesn't have capitalism, like many places in Africa or South America or Cuba. Funny who
must people try to leave those places though. Millions do not flock there. They do the other
way round.
"In your opinion."
Yes, true. In my opinion. But I have backed that opinion up with a well reasoned argument
for my position. It didn't just come out of thin air. It comes from recognising the nature of
government is force, violence and coercion. Again, it is the gun in society. And in my
opinion, I think it is wrong, immoral and will always lead to bad outcomes to use the gun to
solve societies more tricky problems. And we can clearly see the bad results of public /
State education, socialised healthcare, welfare, government involvement in the economy, etc,
etc, etc. All do badly.
"Did I? I didn't sign up before birth to participate, and I have no other options but to
participate or die."
You have other options, as previously mentioned. Live off the land, move to a
non-capitalist country, set up a commune, etc.
"Still unsure upon what these rights are based. The mere fact that people can reason
does not necessarily instill or ground right."
Where else can they come from? If you say "government". Well when does government get its
power and decide on your rights? From the people that make up government. So we are back to
people again.
"You tell us elsewhere that we don't really have capitalism, the state and other actors
dominate and fiddle etc. Now you clam capitalism has provided all these nice things* - pick
one."
No. It is not a case of picking one. It is not an "either / or" situation. Economic
freedom and economic oppression exist on a sliding scale. You have more free economies, like
the US (especially prior to 1913) and you have less free economies, like the USSR or Cuba.
The parts of freedom we have, give us the good stuff, gives us innovation and allows society
to grow richer and lift more people out of poverty. The more bad stuff that gets involved,
the less we have, the more society stagnates. The USSR was a lot poorer and dirtier
(environmentally) and had a lot more famine and waste because it was highly centrally
controlled.
"So it had nothing to do with quasi-British authorities selling narcotics to mainland
China then?"
Not much. There may have been some of that but nowhere near enough to explain the
explosion of wealth in HK.
We ARE social animals. Which is why I laugh when I hear right-wing opinions compared to
the laws of the jungle. As far as I can gather, in the jungle, there are no such things as
property laws, inheritance, land enclosure, or indeed money! Humanity's development is as
socialised societies, with surpluses, consent, and so on.
And there has never been free-market capitalism. A misnomer if ever there was one.
1. Hayek's book 'The Road to Serfdom' uses an erroneous metaphor. He argues that if we allow gov regulation, services and spending
to continue then we will end up serfs. However, serfs are basically the indentured or slave labourers of private citizens and
landowners not of the state. Only in a system of private capital can there be serfs. Neo liberalism creates serfs not a public
system.
2. According to Hayek all regulation on business should be eliminated and only labour should be regulated to make it cheap
and contain it so that private investors can have their returns guaranteed. Hence the purpose of the state is to pass laws to
suppress workers.
These two things illustrate neo-liberalism. Deception and repression of labour.
"... A suicide occurs in the United States roughly once every 12 minutes . What's more, after decades of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do homicides , even though the murder rate gets so much more attention. ..."
"... In some states the upsurge was far higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%). ..."
"... Since 2008 , suicide has ranked 10th among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between 35 and 45, fourth. The United States also has the ninth-highest rate in the 38-country Organization for Economic Cooperation and Development. Globally , it ranks 27th. ..."
"... The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own guns than in cities and suburbs, leading to a higher rate of suicide involving firearms, the means used in half of all such acts in this country. ..."
"... Education is also a factor. The suicide rate is lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill themselves. Suicide rates also tend to be lower among people in higher-income brackets. ..."
"... Evidence from the United States , Brazil , Japan , and Sweden does indicate that, as income inequality increases, so does the suicide rate. ..."
"... One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways) than African Americans, their suicide rate is significantly higher . ..."
"... The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne Case and Angus Deaton have labeled " deaths of despair " -- those caused by suicides plus opioid overdoses and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and its ripple effects do appear to matter. ..."
"... Trump has neglected his base on pretty much every issue; this one's no exception. ..."
Yves here. This post describes how the forces driving the US suicide surge started well before the Trump era, but explains how
Trump has not only refused to acknowledge the problem, but has made matters worse.
However, it's not as if the Democrats are embracing this issue either.
BY Rajan Menon, the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New
York, and Senior Research Fellow at Columbia University's Saltzman Institute of War and Peace Studies. His latest book is The Conceit of Humanitarian Intervention
Originally published at
TomDispatch .
We hear a lot about suicide when celebrities like
Anthony Bourdain and
Kate Spade die by their own hand.
Otherwise, it seldom makes the headlines. That's odd given the magnitude of the problem.
In 2017, 47,173 Americans killed themselves.
In that single year, in other words, the suicide count was nearly
seven times greater than the number
of American soldiers killed in the Afghanistan and Iraq wars between 2001 and 2018.
A suicide occurs in the United States roughly once every
12 minutes . What's more, after decades
of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since
the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do
homicides , even
though the murder rate gets so much more attention.
In other words, we're talking about a national
epidemic of self-inflicted
deaths.
Worrisome Numbers
Anyone who has lost a close relative or friend to suicide or has worked on a suicide hotline (as I have) knows that statistics
transform the individual, the personal, and indeed the mysterious aspects of that violent act -- Why this person? Why now? Why in
this manner? -- into depersonalized abstractions. Still, to grasp how serious the suicide epidemic has become, numbers are a necessity.
According to a 2018 Centers for Disease Control study , between
1999 and 2016, the suicide rate increased in every state in the union except Nevada, which already had a remarkably high rate. In
30 states, it jumped by 25% or more; in 17, by at least a third. Nationally, it increased
33% . In some states the upsurge was far
higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%).
Alas, the news only gets grimmer.
Since 2008 , suicide has ranked 10th
among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between
35 and 45, fourth. The United States also has the ninth-highest
rate in the 38-country Organization for Economic Cooperation and Development.
Globally , it ranks 27th.
More importantly, the trend in the United States doesn't align with what's happening elsewhere in the developed world. The World
Health Organization, for instance, reports
that Great Britain, Canada, and China all have notably lower suicide rates than the U.S.,
as do all but
six countries in the European Union. (Japan's is only slightly lower.)
World Bank statistics show that, worldwide,
the suicide rate fell from 12.8 per 100,000 in 2000 to 10.6 in 2016. It's been falling in
China ,
Japan
(where it has declined steadily for nearly a
decade and is at its lowest point in 37 years), most of Europe, and even countries like
South Korea and
Russia that
have a significantly higher suicide rate than the United States. In Russia, for instance, it has dropped by nearly 26% from a
high point of 42 per 100,000 in
1994 to 31 in 2019.
We know a fair amount about the patterns
of suicide in the United States. In 2017, the rate was highest for men between the ages of 45 and 64 (30 per 100,000) and those 75
and older (39.7 per 100,000).
The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New
Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own
guns than in cities and suburbs, leading to a
higher rate of suicide involving firearms, the means used in half
of all such acts in this country.
There are gender-based differences as well.
From 1999 to 2017, the rate for men was substantially higher than for women -- almost four-and-a-half times higher in the first of
those years, slightly more than three-and-a-half times in the last.
Education is also a factor. The suicide rate is
lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill
themselves. Suicide rates also tend to be lower
among people in higher-income brackets.
The Economics of Stress
This surge in the suicide rate has taken place in years during which the working class has experienced greater economic hardship
and psychological stress. Increased competition from abroad and outsourcing, the results of globalization, have contributed to job
loss, particularly in economic sectors like manufacturing, steel, and mining that had long been mainstays of employment for such
workers. The jobs still available often paid less and provided fewer benefits.
Technological change, including computerization, robotics, and the coming of artificial intelligence, has similarly begun to displace
labor in significant ways, leaving Americans without college degrees, especially those 50 and older, in
far more difficult straits when it comes to
finding new jobs that pay
well. The lack of anything resembling an
industrial policy of a sort that exists in Europe
has made these dislocations even more painful for American workers, while a sharp decline in private-sector union membership
-- down
from nearly 17% in 1983 to 6.4% today -- has reduced their ability to press for higher wages through collective bargaining.
Furthermore, the inflation-adjusted median wage has barely budged
over the last four decades (even as
CEO salaries have soared). And a decline in worker productivity doesn't explain it: between 1973 and 2017 productivity
increased by 77%, while a worker's average hourly wage only
rose by 12.4%. Wage stagnation has made it
harder for working-class
Americans to get by, let alone have a lifestyle comparable to that of their parents or grandparents.
The gap in earnings between those at the top and bottom of American society has also increased -- a lot. Since 1979, the
wages of Americans in the 10th percentile increased by a pitiful
1.2%. Those in the 50th percentile did a bit better, making a gain of 6%. By contrast, those in the 90th percentile increased by
34.3% and those near the peak of the wage pyramid -- the top 1% and especially the rarefied 0.1% -- made far more
substantial
gains.
And mind you, we're just talking about wages, not other forms of income like large stock dividends, expensive homes, or eyepopping
inheritances. The share of net national wealth held by the richest 0.1%
increased from 10% in the 1980s to 20% in 2016.
By contrast, the share of the bottom 90% shrank in those same decades from about 35% to 20%. As for the top 1%, by 2016 its share
had increased to almost 39% .
The precise relationship between economic inequality and suicide rates remains unclear, and suicide certainly can't simply be
reduced to wealth disparities or financial stress. Still, strikingly, in contrast to the United States, suicide rates are noticeably
lower and have been declining in
Western
European countries where income inequalities are far less pronounced, publicly funded healthcare is regarded as a right (not
demonized as a pathway to serfdom), social safety nets far more extensive, and
apprenticeships and worker
retraining programs more widespread.
Evidence from the United States
, Brazil ,
Japan , and
Sweden does indicate that, as income inequality increases,
so does the suicide rate. If so, the good news is that progressive economic policies -- should Democrats ever retake the White
House and the Senate -- could make a positive difference. A study
based on state-by-state variations in the U.S. found that simply boosting the minimum wage and Earned Income Tax Credit by 10%
appreciably reduces the suicide rate among people without college degrees.
The Race Enigma
One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways)
than African Americans, their suicide rate is significantly
higher . It increased from 11.3 per 100,000
in 2000 to 15.85 per 100,000 in 2017; for African Americans in those years the rates were 5.52 per 100,000 and 6.61 per 100,000.
Black men are
10 times more likely to be homicide victims than white men, but the latter are two-and-half times more likely to kill themselves.
The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate
effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne
Case and Angus Deaton have labeled "
deaths of despair
" -- those caused by suicides plus
opioid overdoses
and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and
its ripple effects do appear to matter.
According to a study by the
St. Louis Federal Reserve , the white working class accounted for 45% of all income earned in the United States in 1990, but
only 27% in 2016. In those same years, its share of national wealth plummeted, from 45% to 22%. And as inflation-adjusted wages have
decreased for
men without college degrees, many white workers seem to have
lost hope of success of
any sort. Paradoxically, the sense of failure and the accompanying stress may be greater for white workers precisely because they
traditionally were much
better off economically than their African American and Hispanic counterparts.
In addition, the fraying of communities knit together by employment in once-robust factories and mines has increased
social isolation
among them, and the evidence that it -- along with
opioid addiction and
alcohol abuse -- increases the risk of suicide
is strong . On top of that,
a significantly higher proportion of
whites than blacks and Hispanics own firearms, and suicide rates are markedly higher in states where gun
ownership is more widespread.
Trump's Faux Populism
The large increase in suicide within the white working class began a couple of decades before Donald Trump's election. Still,
it's reasonable to ask what he's tried to do about it, particularly since votes from these Americans helped propel him to the White
House. In 2016, he received
64% of the votes of whites without college degrees; Hillary Clinton, only 28%. Nationwide, he beat Clinton in
counties where deaths of despair rose significantly between 2000 and 2015.
White workers will remain crucial to Trump's chances of winning in 2020. Yet while he has spoken about, and initiated steps aimed
at reducing, the high suicide rate among
veterans , his speeches and tweets have never highlighted the national suicide epidemic or its inordinate impact on white workers.
More importantly, to the extent that economic despair contributes to their high suicide rate, his policies will only make matters
worse.
The real benefits from the December 2017 Tax Cuts and Jobs Act championed by the president and congressional Republicans flowed
to those on the top steps of the economic ladder. By 2027, when the Act's provisions will run out, the wealthiest Americans are expected
to have captured
81.8% of the gains. And that's not counting the windfall they received from recent changes in taxes on inheritances. Trump and
the GOP
doubled the annual amount exempt from estate taxes -- wealth bequeathed to heirs -- through 2025 from $5.6 million per individual
to $11.2 million (or $22.4 million per couple). And who benefits most from this act of generosity? Not workers, that's for sure,
but every household with an estate worth $22 million or more will.
As for job retraining provided by the Workforce Innovation and Opportunity Act, the president
proposed
cutting that program by 40% in his 2019 budget, later settling for keeping it at 2017 levels. Future cuts seem in the cards as
long as Trump is in the White House. The Congressional Budget Office
projects that his tax cuts alone will produce even bigger budget
deficits in the years to come. (The shortfall last year was
$779 billion and it is expected to
reach $1 trillion by 2020.) Inevitably, the president and congressional Republicans will then demand additional reductions in spending
for social programs.
This is all the more likely because Trump and those Republicans also
slashed corporate taxes
from 35% to 21% -- an estimated
$1.4
trillion in savings for corporations over the next decade. And unlike the income tax cut, the corporate tax has
no end
date . The president assured his base that the big bucks those companies had stashed abroad would start flowing home and produce
a wave of job creation -- all without adding to the deficit. As it happens, however, most of that repatriated cash has been used
for corporate stock buy-backs, which totaled more than
$800 billion last year. That, in turn, boosted share prices, but didn't exactly rain money down on workers. No surprise, of course,
since the wealthiest 10% of Americans own at least
84% of all stocks and the bottom
60% have less than
2% of them.
And the president's corporate tax cut hasn't produced the tsunami of job-generating investments he predicted either. Indeed, in
its aftermath, more than 80% of American
companies stated that their plans for investment and hiring hadn't changed. As a result, the monthly increase in jobs has proven
unremarkable compared to President Obama's
second term, when the economic recovery that Trump largely inherited began. Yes, the economy did grow
2.3%
in 2017 and
2.9% in 2018 (though not
3.1% as the president claimed). There wasn't, however, any "unprecedented economic boom -- a boom that has rarely been seen before"
as he insisted in this year's State of the Union
Address .
Anyway, what matters for workers struggling to get by is growth in real wages, and there's nothing to celebrate on that front:
between 2017 and mid-2018 they actually
declined by 1.63% for white workers and 2.5% for African Americans, while they rose for Hispanics by a measly 0.37%. And though
Trump insists that his beloved tariff hikes are going to help workers, they will actually raise the prices of goods, hurting the
working class and other low-income Americans
the most .
Then there are the obstacles those susceptible to suicide face in receiving insurance-provided mental-health care. If you're a
white worker without medical coverage or have a policy with a deductible and co-payments that are high and your income, while low,
is too high to qualify for Medicaid, Trump and the GOP haven't done anything for you. Never mind the president's
tweet proclaiming that "the Republican Party Will Become 'The Party of Healthcare!'"
Let me amend that: actually, they have done something. It's just not what you'd call helpful. The
percentage of uninsured
adults, which fell from 18% in 2013 to 10.9% at the end of 2016, thanks in no small measure to
Obamacare , had risen to 13.7% by the end of last year.
The bottom line? On a problem that literally has life-and-death significance for a pivotal portion of his base, Trump has been
AWOL. In fact, to the extent that economic strain contributes to the alarming suicide rate among white workers, his policies are
only likely to exacerbate what is already a national crisis of epidemic proportions.
Trump is running on the claim that he's turned the economy around; addressing suicide undermines this (false) claim. To state
the obvious, NC readers know that Trump is incapable of caring about anyone or anything beyond his in-the-moment interpretation
of his self-interest.
Not just Trump. Most of the Republican Party and much too many Democrats have also abandoned this base, otherwise known as
working class Americans.
The economic facts are near staggering and this article has done a nice job of summarizing these numbers that are spread out
across a lot of different sites.
I've experienced this rise within my own family and probably because of that fact I'm well aware that Trump is only a symptom
of an entire political system that has all but abandoned it's core constituency, the American Working Class.
Yep It's not just Trump. The author mentions this, but still focuses on him for some reason. Maybe accurately attributing the
problems to a failed system makes people feel more hopeless. Current nihilists in Congress make it their duty to destroy once
helpful institutions in the name of "fiscal responsibility," i.e., tax cuts for corporate elites.
I'd assumed, the "working class" had dissappeared, back during Reagan's Miracle? We'd still see each other, sitting dazed on
porches & stoops of rented old places they'd previously; trying to garden, fix their car while smoking, drinking or dazed on something?
Those able to morph into "middle class" lives, might've earned substantially less, especially benefits and retirement package
wise. But, a couple decades later, it was their turn, as machines and foreigners improved productivity. You could lease a truck
to haul imported stuff your kids could sell to each other, or help robots in some warehouse, but those 80s burger flipping, rent-a-cop
& repo-man gigs dried up. Your middle class pals unemployable, everybody in PayDay Loan debt (without any pay day in sight?) SHTF
Bug-out bags® & EZ Credit Bushmasters began showing up at yard sales, even up North. Opioids became the religion of the proletariat
Whites simply had much farther to fall, more equity for our betters to steal. And it was damned near impossible to get the cops
to shoot you?
Man, this just ain't turning out as I'd hoped. Need coffee!
We especially love the euphemism "Deaths O' Despair." since it works so well on a Chyron, especially supered over obese crackers
waddling in crusty MossyOak™ Snuggies®
This is a very good article, but I have a comment about the section titled, "The Race Enigma." I think the key to understanding
why African Americans have a lower suicide rate lies in understanding the sociological notion of community, and the related concept
Emil Durkheim called social solidarity. This sense of solidarity and community among African Americans stands in contrast to the
"There is no such thing as society" neoliberal zeitgeist that in fact produces feelings of extreme isolation, failure, and self-recriminations.
An aside: as a white boy growing up in 1950s-60s Detroit I learned that if you yearned for solidarity and community what you had
to do was to hang out with black people.
" if you yearned for solidarity and community what you had to do was to hang out with black people."
amen, to that. in my case rural black people.
and I'll add Hispanics to that.
My wife's extended Familia is so very different from mine.
Solidarity/Belonging is cool.
I recommend it.
on the article we keep the scanner on("local news").we had a 3-4 year rash of suicides and attempted suicides(determined by chisme,
or deduction) out here.
all of them were despair related more than half correlated with meth addiction itself a despair related thing.
ours were equally male/female, and across both our color spectrum.
that leaves economics/opportunity/just being able to get by as the likely cause.
Actually, in the article it states:
"There are gender-based differences as well. From 1999 to 2017, the rate for men was substantially higher than for women -- almost
four-and-a-half times higher in the first of those years, slightly more than three-and-a-half times in the last."
which in some sense makes despair the wrong word, as females are actually quite a bit more likely to be depressed for instance,
but much less likely to "do the deed". Despair if we mean a certain social context maybe, but not just a psychological state.
Suicide deaths are a function of the suicide attempt rate and the efficacy of the method used. A unique aspect of the US is
the prevalence of guns in the society and therefore the greatly increased usage of them in suicide attempts compared to other
countries. Guns are a very efficient way of committing suicide with a very high "success" rate. As of 2010, half of US suicides
were using a gun as opposed to other countries with much lower percentages. So if the US comes even close to other countries in
suicide rates then the US will surpass them in deaths.
https://en.wikipedia.org/wiki/Suicide_methods#Firearms
Now we can add in opiates, especially fentanyl, that can be quite effective as well.
The economic crisis hitting middle America over the past 30 years has been quite focused on the states and populations that
also tend to have high gun ownership rates. So suicide attempts in those populations have a high probability of "success".
I would just take this opportunity to add that the police end up getting called in to prevent on lot of suicide attempts, and
just about every successful one.
In the face of so much blanket demonization of the police, along with justified criticism, it's important to remember that.
As someone who works in the mental health treatment system, acute inpatient psychiatry to be specific, I can say that of the
25 inpatients currently here, 11 have been here before, multiple times. And this is because of several issues, in my experience:
inadequate inpatient resources, staff burnout, inadequate support once they leave the hospital, and the nature of their illnesses.
It's a grim picture here and it's been this way for YEARS. Until MAJOR money is spent on this issue it's not going to get better.
This includes opening more facilities for people to live in long term, instead of closing them, which has been the trend I've
seen.
One last thing the CEO wants "asses in beds", aka census, which is the money maker. There's less profit if people get better
and don't return. And I guess I wouldn't have a job either. Hmmmm: sickness generates wealth.
The politics of economic growth are complex and contested as never before. In rich
countries, rates of GDP growth have declined, decade after decade since the 1960s. The 2008
crash was deep, and the post-crisis recovery has been slow. This poses problems for
governments, given that their 'performance legitimacy' requires some degree of popular approval
of their perceived success in charting a growth path that satisfies the citizenry's demand for
goods and services. Where growth is low and governments choose to respond with austerity
programmes, these bring additional misery and hardship -- including tens of thousands of
premature deaths
in Britain alone .
In the same decades, growth scepticism has thrived. It takes two main forms: one highlights
the impact of infinite growth on finite resources and on the natural environment. Recognition
of the dangers of climate breakdown has transformed this debate – while mainstream
opinion retains the traditional faith in growth, now refashioned as ' green growth ', the heretics are
rallying to ' degrowth '.
The other emphasises the disconnect between growth and social well-being. The days are long
gone when growth was seen as the fast track to general prosperity, as normal and natural as
sunrise. It is well established that the
relationship between growth and well-being is partial at best. Such a correlation does exist,
but weakens after a certain point -- roughly speaking when per capita GDP exceeds $15,000. At
higher levels, the translation of growth into improvements in health and well-being is tenuous.
Other variables, notably levels of equality, are critical.
In combination, these developments have motivated the '
Beyond GDP ' agenda. Whether for reasons of growth scepticism or out of concern that if GDP
growth remains slack governments' performance legitimacy will suffer too, political leaders,
civil servants and academics -- among them
Nicolas Sarkozy , Jacinda Ardern ,
Gus O'Donnell , Joseph Stiglitz and Amartya Sen -- are promoting alternative
yardsticks.
To assess these debates it helps to dig into the history and morphology of the 'growth
paradigm' -- the belief that economic growth is good, imperative, essentially limitless, and
the principal remedy for a litany of social problems – and ask the following: when and
how did this paradigm originate?
From Rain Dance to Nasdaq
One response was offered in 1960 by Elias Canetti. In
quasi-Nietzschean vein, he invoked a transhistorical 'will to grow'. Humans are always striving
for more . Whether the parent monitoring her child's weight or the state official
seeking to augment her power, or the community expanding its population, we all want growth.
The desire to accumulate goods, the drive for economic growth, the wish for prosperity –
they are all innate to human social being. Humans in groups are driven to seek increase: of
their numbers, of the conditions of production, and of the products they require and desire.
The very earliest homo sapiens sought the enlargement of their "own horde through a plentiful
supply of children." And later, in the age of modern industrial production, the growth drive
came into its own.
"If there is now one faith, it is faith in production, the modern frenzy of increase; and
all the peoples of the world are succumbing to it one after the other. Every factory is a unit
serving the same cult. What is new is the acceleration of the process. What in former days was
generation and increase of expectancy, directed towards rain or corn, has today become
production itself." A straight line runs from the rain dance to the Nasdaq.
But this is to confuse the wiring of our current economy with the wiring of the human brain.
Canetti's 'will to grow' doesn't withstand scrutiny. The diverse behaviours he describes can't
be reduced to a single logic. The 'will' behind creating babies is quite unlike the will to
accumulate acreage or gold. And the latter is relatively recent. For much of the human story,
societies were nomadic or semi-nomadic, and organised in immediate-return systems .
Stashes of food were set aside to tide the group over for days or weeks, but long-term storage
was impractical. The accumulation of possessions would hamper mobility. The measures that such
societies used to reduce the risks of scarcity centred not on accumulating stores of goods but
on knowledge of the environment, and interpersonal relationships (borrowing, sharing, and so
on). The moral economy of sharing necessitates a muscular egalitarianism that is undermined by
the accumulation of property.
Logics of accumulation -- and, in the loosest sense, growth -- were not initiated until the
Neolithic revolution. Its technological and institutional transformations included settled
agriculture and storage, class division, states, warfare and territoriality, and, later, the
invention of money. Population growth joined with class exploitation and interstate competition
to expand the sway of agrarian empires. Farmers enlarged the ploughlands, scholars penned
proposals for improving the organisation of agriculture or trade, merchants amassed wealth, and
rulers, seeking to enlarge population and tribute, extended their domains. Only now -- in the
post-Neolithic age -- did gold achieve its
fetish quality as the source and symbol of power.
Scour the documents from ancient civilisations and you'll find tales of competition for
territory and the accumulation of property, but nothing that resembles the modern growth
paradigm. No conception of 'an economy' that can grow, still less of one that tends to the
infinite. And you'll find little, if any, notion of linear historical progress. Instead,
cyclical cosmologies prevailed. A partial exception is the fourteenth century polymath,
Ibn
Khaldun . He developed a sophisticated analysis of growth dynamics. But his ideas weren't
widely adopted, and his theory is cyclical: it describes negative feedback mechanisms that
ensure any economic upticks will necessarily hit barriers and retreat.
When, then, did the modern growth paradigm originate -- and why?
Petty's Arithmetic
The evolution of the growth paradigm was integrally connected to the capitalist system and
its colonial thrusts. The basic link between the growth drive and capitalism is transparent.
The latter is a system of competitive accumulation. The former, in suggesting that the system
is natural and brings benefit also to the '99%', provides ideological cover in that growth
serves as an idealised and democratised redescription of capital accumulation. But there's more
to it than that. The capitalist transition was to a system of generalised commodity production,
in which formal 'productive' economic activity takes the shape of commodities interacting
through the price mechanism, in a regularised manner. If earlier political-economic thought had
construed its subject as the affairs of the royal household, during the capitalist transition a
new model emerged, with an interconnected market field posited as essentially outside the
state.
In seventeenth-century England, just as the universe was being re-imagined by Newton et al
as a machine determined by lawful regularities, the idea that economic
behaviour follows natural laws became commonplace. By the close of the following century,
Richard Cantillon had presented the market system as self-equilibrating, a machine that
functions in a law-like manner; Quesnay's Tableau had depicted the economic system as a
unified process of reproduction; Adam Smith had theorised the dynamics of economic growth; and
philosophers (such as William Paley) had developed the creed that steady
economic growth legitimates the social system and renders system-critical demands
unnecessary and dangerous.
The same centuries experienced a revolution in statistics. In the England of 1600, the
growth paradigm could scarcely have existed. No one knew the nation's income, or even its
territory or population. By 1700
all these had been calculated , at least in some rough measure, and as new data arrived
England's 'material progress' could be charted. Simultaneously, the usage of 'growth' had
extended from the natural and concrete toward abstract phenomena: the growth of England's
colonies in Virginia and Barbados, the ' growth
of trade ,' and suchlike.
But the capitalist transition revolutionised much more than the formal economy and economic
concepts. As land came to be regarded as a commodity-like object, the idea -- found to some
degree in antiquity -- that nature exists to serve the purposes of landowners and is
fundamentally external to human beings, gained definition. The early-modern regimes of
abstract social labour
and
abstract social nature (i.e. the constitution of labour and nature as commodities) were
sustained by the scientific revolution, and also by the construction of capitalist time .
Over centuries, time became flattened into an abstract, infinite and divisible continuum, one
that permitted economic life to be re-imagined as subject to continuous
growth and cultivation . Morality was upended, too, most significantly in the discarding of
the age-old proscriptions against acquisitiveness.
The more that economic activity came to be marshalled behind the imperatives of capital
accumulation, the more it became subject to regimes of 'improvement' and quantification. In
Jacobean and Cromwellian England, these practices and discourses proliferated.
Agrarian-capitalist improvement was fuelled by scientific discoveries. These, in turn, were
spurred on by the navigational and martial demands of explorers, freebooters and conquerors.
European settlers in the New World not only exterminated and subjugated 'new' peoples, but
turned to objectifying and cataloguing them, drawing comparisons with their own kind and
'improving' them. 'Improvement' and its theologically-intoxicated transplantation to colonial
locations generated new data and new demands for detailed knowledge. How profitable is this
tract of land, and its denizens? How can
they be made more profitable ? Answering such questions was enabled by modern accounting
techniques, with their sharper definition of such abstractions as profit and capital.
No surprise, then, that the first statistically rigorous accounting of the wealth of a
country (as distinct from, say, a royal household) was conducted by a capitalist on a
colonial mission . William Petty planted quantification at the heart of scientific
economics, crafted to the purposes of English merchants and empire, and gaining ideological
force from the sheen of objectivity with which economic statistics -- or 'political arithmetic'
as he termed it -- comes coated. In his work the conquest of nature and the idea of nature as a
machine, and of the economy as a productive engine, blended to produce a new concept of wealth
as " resources and the productive power
to harness them " in contrast to the mercantilist concept, centred on the accumulation of
bullion.
Colonisation of the New World contributed powerfully to capital accumulation in Western
Europe, but it also spurred Europe's philosophers to elaborate a racialised progress ideology .
The question of what to make of the peoples encountered in the Americas, and what implications
followed from their property arrangements, stimulated a new reading of the human story: a
narrative of social progress. From the vantage point of the colonialists, if 'they' were at the
primitive stage, had 'we' once occupied it too?
Centred on a mythical ladder that climbs up from barbarism to civilisation, the progress
idea hammered the diversity of human populations into a single temporal-economic chain .
By indexing the richer and higher-tech nations (and 'races') as history's vanguard, it
justified their bossing of the rest. It was a manifesto that drummed out capital's rhythms, and
later found new forms as ' modernisation theory ,' 'the development project,'
and so forth, articulated through a grammar of 'growth.' Through its marriage to progress and
development, in the belief that social advance requires a steady upward ratchet in national
income, growth gained its ideological heft.
The Globalisation of an Ideology
In the nineteenth and twentieth centuries, the consolidation and globalisation of capitalist
relations was accompanied by the growth paradigm. The first half of the twentieth century saw
its definition sharpen. A pronounced shift occurred from a rather vague sense -- long prevalent
-- that government should preside over economic 'improvement' and 'material progress' to an
urgent conviction that promoting growth is a matter of national priority. Factors behind the
shift included intensified geopolitical rivalry, and the increasing 'muscularity' of states,
with their expanded bureaucratic apparatuses, surveillance systems and welfare provision, as
well as the segue from the age of empires to that
of nation states , a shift that helped consolidate the discourse of the 'national economy.'
In many countries the expansion of suffrage was an additional factor: rights were extended and
an infrastructure and ideology of national belonging was constructed with the aim of
incorporating the lower orders as citizens into the body politic. With the Great Depression,
restoring growth became an urgent project of states, and provided the context for the national
income accounting that eventually led to GDP.
The acme of the growth paradigm was reached in the mid twentieth century. Growth was firmly
established everywhere: in the state-capitalist economies of the 'Second World,' the market
economies of the West, and the postcolonial world too. It became part of the economic-cultural
furniture, and played a decisive part in binding 'civil society' into capitalist hegemonic
structures -- with social democratic parties and trade unions crucial binding agents. It came
to be seen as the key metric of national progress and as a magic wand to achieve all sorts of
goals: to abolish the danger of returning to depression, to sweeten class antagonisms, to
reduce the gap between 'developed' and 'developing' countries, to carve a path to international
recognition, and so on. There was a military angle too. For the Cold War rivals, growth
promised geopolitical success. "If we lack a first-rate growing economy," cautioned JFK on the
campaign trail, "
we cannot maintain a first-rate defense ." The greater the rate of growth, it was
universally supposed, the lesser the economic, social and political challenges, and the more
secure the regime.
The growth paradigm, I suggest, is a form of fetishistic consciousness. It functions as
commodity fetishism at one remove. Growth, although the result of social relations among
people, assumes the veneer of objective necessity. The growth paradigm elides the exploitative
process of accumulation, portraying it instead as a process in the general interest. As
Mike Kidron and Elana
Gluckstein note, as a system of competition "capitalism depends on the growth of capital;
as a class system it depends on obscuring the sources of that growth."
For a long time, GDP growth was widely assumed to be the route to prosperity. Since then,
cracks have appeared. In the rich world, we are beginning to realise that continuous GDP growth
leads not simply to wealth and wellbeing, but to environmental collapse and barbecued
grandchildren. But growth is not its own cause. GDP mirrors the power structure and form of
value of capitalist society, but it doesn't define the system's core goal. That goal is the
competitive accumulation of capital, and the accounting principles that guide it are those at
the level of the firm, not the state. Put differently, the relentless increase in global
resource throughput and environmental despoliation is not principally the result of states
aspiring to a metric – higher GDP – but of industrial and financial firms, driven
by market competition to expand turnover, develop new products, and increase profits and
interest.
If the above analysis is correct, insofar as critical debates on growth focus solely on GDP
while being coy about capital, they are enacting a form of displacement .
In writing a dissertation in 2014 I read Alchian's theory of the firm where he said
cooperation is what fosters a peaceful condition for growth to occur, where as competition
does the opposite. I've lived by that idea since, at least for us here in Lagos we have a
chance to build a more cooperative and less competitive society
If we were actually pursuing growth things would be a lot better.
The current goal is making money (capital accumulation).
What is this GDP thing anyway?
In the 1930s, they pondered over where all that wealth had gone to in 1929 and realised
inflating asset prices doesn't create real wealth, they came up with the GDP measure to track
real wealth creation in the economy.
The transfer of existing assets, like stocks and real estate, doesn't create real wealth
and therefore does not add to GDP. The real wealth creation in the economy is measured by
GDP.
Inflated asset prices aren't real wealth, and this can disappear almost over-night, as it
did in 1929 and 2008.
The economics of globalisation precedes the GDP measure when they thought inflating asset
prices created real wealth.
Real wealth creation involves real work, producing new goods and services in the
economy.
We need an economics that focuses on GDP to grow GDP.
Neoclassical economics makes you think you are creating real wealth by inflating asset
prices and we have been faffing about doing that.
The new scientific economics of globalisation = 1920's neoclassical economics with some
complex maths on top.
" Distinctions must be kept in mind between quantity and quality of growth, between its
costs and return, and between the short and the long term. Goals for more growth should
specify more growth of what and for what "
This is not by me, but by the creator of the GDP formula, Simon Kuznets. GDP is a very
poor indicator for many reasons, even apart from those mentioned above. Borrowing money and
squandering it adds to GDP while the resulting debt is ignored. Extracting and burning fossil
fuels adds to GDP while the future depletion is ignored. Stripmining and deforesting nature
adds to GDP while you get my drift. To paraphrase Bastiat, the growth in GDP that is seen
tends to mask decline in areas like nature and wellbeing that are not seen.
It is tragic to see politicians and pundits thoughtlessly raving about a few tenths of a
percent change in GDP while never seeming to realize how poorly this represents things that
are really important to humanity.
When will people stop worshipping at the GDP altar?
Wonderful!
BrainyQuote attributes it ("Growth for the sake of growth is the ideology of the cancer
cell.") to Edward Abbey, who also came out with "Society is like a stew. If you don't stir it
up every once in a while then a layer of scum floats to the top."
Thank you.
"Anyone who believes exponential growth can go on forever in a finite world is either a
madman or an economist."
"Attributed to Kenneth Boulding in: United States. Congress. House (1973) Energy
reorganization act of 1973: Hearings, Ninety-third Congress, first session, on H.R. 11510. p.
248"
Where the author says 'For much of the human story, societies were nomadic or
semi-nomadic, and organized in immediate-return systems.' that is not entirely true that.
Here I am thinking of the early Bantu in their expansion in Africa. Their wealth for them
were in their cattle herds which being mobile, made possible the expansion of the Bantu down
eastern Africa and into Southern Africa. These were long-term investments and Bantu society
evolved to take care of these herds as they expanded. Your wealth in that society was in how
many cattle you had.
I suppose when you think about it, the paradigm of growth works – to an extent –
when there are more lands to discover, more continents to be opened up, more frontiers to be
discovered. But all of that ran out a century ago and so with no more new resources to be
found to be exploited, we have now reached the point where where we have come up hard against
the natural limits of this planet. And yet, our economies still use the same mode of
operating when we lived in an ever-expanding world. We are far beyond the point where we
should have evolved into a closed-loop economy.
More than that. For example. A young man could only really use cattle to be the dowry that
he would need to attract a bride so cattle was a sign of his wealth. The status came with it.
Cattle shaped their society immensely. Their villages were huge rings where the cattle would
be locked in of a night and were called kraals. The people were so familiar with their cattle
that a herdsman at a glance of a herd of several hundred cattle would be able to tell
straight away if one were missing. It was a fascinating society.
The statement "For much of the human story, societies were nomadic or semi-nomadic, and
organized in immediate-return systems" is absolutely true. Please see the book "Limited
Wants, Unlimited Means" for a good primer. It includes an excerpt from Marshall Sahlins' "The
Original Affluent Society" – a great introduction to hunter-gatherer societies. There
is also a wonderful comparison of immediate return and delayed return societies as
exemplified in the Hadza people, and the problems that arise once an immediate return society
begins to settle, even minimally.
The Bantu evolved later and are agro-pastoralists, not foragers. The Hadza have persisted
as foragers even after contact with the Bantu and other groups. They have also repeatedly
resisted government and missionary efforts to introduce farming and Christianity. The Hadza
are perhaps the best example of how human beings lived on earth for over 99% of our
existence, that being in a largely cooperative, egalitarian manner, devoid of concepts such
as wealth.
Bantu people were not cattle herders, west central and much of Southern Africa is
basically forest, there's no way in this world anyone could move herds this way; it's our
northern brothers and sisters that are cattle herders. That being said, culturally we (Bantu)
generally moved to set up new families/villages that's how we spread not through some farming
technique, that's false
When I comment with someone, my wife for instance, about the need to get rid of GDP growth
as the main political objective and think of small well being objectives I tipically receive
commiseration in their eyes: "Yes Nacho, you are right, go and rest for a while"
As usual, scale is ignored. In my (still living) 94 year old mother's lifetime, human
population quadrupled. In large mammals, this is sometimes called "plague phase." Add a
(minimally) tenfold increase in technological leverage in converting finite resources into
infrastructure, food, transportation, consumable goods and services, and the increasingly
rapid decline of the ecosphere is hardly a surprise. Dematerialization of the economy is a
myth! And don't expect money printing or cyber tokens as solutions. They are simply power
tools to access real stuff.
One of the drivers of growth in the UK in the late 18th century that was missing, was
money. It reached a crisis stage in 1797.
A chronic shortage of coins, silver specie in particular.
Then, the freebooters came to the rescue!
Silver 8 Reales coins plundered from the Spanish were reworked into being coins of the
British realm & many other outposts in the colonies.
The first effort was pretty weak, all that was done was they were counterstamped with a
small portrait of King George III upon the countenance of King Charles IIII, which led to
this ditty:
"In order to enable the Spanish Dollar to pass, the head of a fool was struck on the neck
of an ass."
A couple of drivers of growth showed up both around the same time, the Haber Bosch process
that allowed for pretty much unlimited food resources, and worldwide fiat money, which also
had no limits to production.
We've quadrupled the world's population since these 2 events.
The Haber-Bosch process allowed for a vast, but in no way unlimited, expansion of
production.
Fiat money can be produced in unlimited amounts, but, according to both common sense and MMT,
actual production also has actual limits.
Setting the world free from first gold and then silver restraints (the last silver coins
issued for circulation in the 1st world was in 1969) allowed for a as much as you'd like fiat
economy, beyond limits and also risk. (for now, that is)
For what it's worth, there has never been an instance of hyperinflation in the cyber money
age.
As much wood, steel and cement, or as many doctors, teachers and entertainers as you'd
like, without limits, just because money can be printed without limits?
It's a fundamental issue: money is an abstraction that can increase without limits; the
real world, the real economy, is not. MMT does address that, but I think it's a root source
of the persistent inflation that plagued the economy until rather recently. Apparently the
Fed, or somebody, can stop it if they wish. However, I think that that history is one reason
for the resistance to MMT – it sounds like a formula for more inflation. Since it
hasn't actually been tried as a policy (the Pentagon's limitless funds are really just
corruption), we won't know for sure until it's tried. There always seems to be a lot that the
economists don't know or won't admit.
Politicians don't have the analytical tools to pick apart the "constant growth" argument
so they default to trumpeting it as a cure for all social ills (no doubt with encouragement
from mainstream economists). On the other end of the spectrum, the growth story seduces
ordinary people because they're told their share of the spoils, courtesy of the trickling
down effect, will lead them to a "better life". As such, nothing short of a massive
ideological decolonization effort is needed to strip growth of the superhero status it enjoys
in contemporary economic discourse.
The only positive hope is that enough people take it upon themselves to rise to the
occasion. People who have freed themselves from the tyranny of the current economic system
need to be examples for others to follow. Those that can, must change their lifestyles. They
indirectly become leaders by example.
There is a spiritual component in this transformation that has not really surfaced yet,
but feels like it is stirring under the surface. There is so much denial going on that
something will burst forth. What form that takes is anyones guess, but most people are just
looking for leadership when pressed.
Instead of the neoliberal message of selfish pursuits lead to a better life, the message
of self-sacrifice and service to something greater resonates with most people. Instead of
being just lip-service or propaganda, this sentiment must be channeled into concrete policies
and actions- beginning with oneself.
Underlying all this is the need for peace. The Big Lie of growth pales in comparison to
the Big Lie of perpetual war. Both lies reinforce each other.
How to explain the conflict between capitalists and well, all the rest, other than a
spiritual war. Where does one place ones faith? Violent and selfish Nationalism will not
suffice.
Strength in humility instead of conquest is the dividing line. The decolonization of the
human mind must be followed by an awareness and consciousness that the world is here to live
in, not conquer. That is an enormous shift in human action and consciousness- those that live
this ideal must be valued and emulated.
The growth paradigm, I suggest, is a form of fetishistic consciousness.
Elsewhere today Lambert talks about religion as Marx's "opiate of the people" but there
are many versions of that drug and our secular overlords seem to have replaced the Bible with
other unquestioned assumptions, many of them economic. Perhaps at some point rationality has
its limits and illusions of some kind of are necessary to make the engine go. The problem
unfortunately is that the current engineers seem to believe those illusions themselves and
follow them blindly. They are addicts too. Is it time to "just say no"?
Good essay. The author gets the the heart of it with this –
The evolution of the growth paradigm was integrally connected to the capitalist system
and its colonial thrusts. The basic link between the growth drive and capitalism is
transparent. The latter is a system of competitive accumulation. The former, in suggesting
that the system is natural and brings benefit also to the '99%', provides ideological cover
in that growth serves as an idealised and democratised redescription of capital
accumulation.
– where the theory of growth is an attempt to rationalize the greed of the few who
really like playing capitalist at the expense of everyone else. How about they get their
jollies playing Monopoly and leave the rest of us alone?
I'll just leave this here, a beautiful tune by one of my favorite bands, Old Crow Medicine
Show. Four minutes that will make you feel better after reading of all the nastiness in the
world, and very apropos to this article –
is an attempt to rationalize the greed of the few who really like playing capitalist at
the expense of everyone else.
As noxious as their displays of wealth are, and as much as it's possible to make a case
that pathological narcissism infuses the system, the motive to accumulate to compete with
rivals, current and future, is central. It's politically useful to attack the way that this
motive draws others into its van, i.e. to make them personally despicable. But it might be
worthwhile to consider how much the accumulation motive is embodied as a kind of social
contract in the firm's organization. I imagine that individual capitalists say to themselves
"I've made my pile, time to sail away in my yacht," but the firm and those who will stay on
want to keep things going.
. The moral economy of sharing necessitates a muscular egalitarianism that is
undermined by the accumulation of property.
this really stuck out to me.
and I can't really identify why, however I couldn't stop thinking about the growing
proliferation of plastic while reading the article
Back in the early 80s, the professor for whom I was a grad assistant frequently urged me
to read Canetti's "Crowds and Power." It's a powerful and useful book. Well-written and
accessible and full of thought-provoking ideas. I'd recommend it for anyone who wants to
ponder social relations.
In this case, Dale seems to use Canetti's book as a kind of straw-man entry to his real
topic:an intro to his discussion of growth/degrowth. I guess you gotta start somewhere? Maybe
he should have simply directly referenced Canetti on his notion of "feast crowds" (pg 62 of
my edition of Crowds and Power.)
The above comments by Sound of the Suburbs and Joe Oskam are incisive, imo. The essence of
the matter boils down to developing a more rigorous distinction (and understanding) of the
difference between productive economic activity and non-productive economic activity. Hudson
is really good on this.
Go back further and Gustave Le Bon's The Crowd from 1896 ages well, because human
motives don't change much
"The masses have never thirsted after truth. Whoever can supply them with illusions is
easily their master; whoever attempts to destroy their illusions is always their
victim."
"A crowd thinks in images, and the image itself calls up a series of other images,
having no logical connection with the first A crowd scarcely distinguishes between the
subjective and the objective. It accepts as real the images invoked in its mind, though
they most often have only a very distant relation with the observed facts .Crowds being
only capable of thinking in images are only to be impressed by images."
"We see, then, that the disappearance of the conscious personality, the predominance of
the unconscious personality, the turning by means of suggestion and contagion of feelings
and ideas in an identical direction, the tendency to immediately transform the suggested
ideas into acts; these, we see, are the principal characteristics of the individual forming
part of a crowd. He is no longer himself, but has become an automaton who has ceased to be
guided by his will."
As I read these quoted words it is hard not to think of the crowds that surround Trump on
his so-called "rallies" for his base. One cannot but help ask, Why is anyone listening to
this man? Ans: "He is no longer himself, but has become an automaton who has ceased to be
guided by his will."
What makes the masses the masses is that they are followers. This is a double edged sword
the elite exploit relentlessly- that is what makes them the elite. They hold the power, and
desire, to manipulate the masses through narrative and image. These stories and images make
the world and human experience comprehensible. When corruption sinks in, that whole group is
doomed to eventual failure if a self-correcting mechanism is not present. Leaders/elite and
masses both fail.
It is very self-serving for the elite to blame the masses when the "illusions" stop
working their magic. Have the elite ever "thirsted after truth" either? Truth meaning a
universal truth applicable to all, or the Truth embodied in a personal view as apposed to a
public view? Such Truths tend to obfuscate the drive for personal power, which doesn't sit
well within groups of people let alone groups of differing cultural or ethnic
experiences.
Manipulation of the masses is not the problem, it is manipulation to what end that is the
issue. In that respect, the elite leadership should take more responsibility and bear a
greater portion of blame for failure- for in fact, they are driving the whole process.
In a nutshell, this is the failure of the current human situation. A greedy elite
incapable or unwilling to use the powers at hand to bring about a fair and equatable world.
It is just too easy for them to continue their deceitful manipulations and blame hapless or
trusting victims.
Another way is for the elite leadership to listen to the people/masses and take their
needs and desires into account when molding public opinion. Such an elite will foster the
population's wellbeing, not fear them or treat them as a mob. That process makes the elite
leadership legitimate.
The most stupid leadership is one that fails to change course when the images and
narratives moving its society are failing. The whole society becomes weak and ineffective on
multiple levels.
At some point, the factional fighting must stop. It seems inevitable that human society
will rebalance itself to manageable levels. The question becomes how violent that transition
will be.
LeBon writes of crowds as though there is a complete discontinuity between a person's
thought and behavior when they are in a crowd and when they are not. That's nonsense, a
cocktail party generalization. I've been in plenty of political crowds and the remarkable
transformation he purports was not evident. Le Bon was a rank conservative and his analysis
reflected his detestation of the French left, fueled by his experience of the Commune. He's
writing in a way that helps justify the massacres that concluded it.
I often wondered about this fetishisation of growth in GDP (I'm in my sixties now), when
in developed countries it seemed to have as many negatives as positives.
Then I realised that capital, in its most general sense, doesn't invest in the hope of
getting its money back, but in the hope of its money back plus some more . The only way that
can carry on for very long is through growth.
I'm not an economist, but that explanation really rang true for me.
Just Thank You. Thank You tons. I will remember the name Gareth Dale and The Ecologist.
And the reference to the (unexplained) runaway condition of human economics as "Capitalist
Time" v. (of course) real time. Because as we have learned here at NC "financial time goes
much faster than real time." And etc. This essay was wonderful, and now we have an outline of
why that is true.
"roughly speaking when per capita GDP exceeds $15,000. At higher levels, the translation
of growth into improvements in health and well-being is tenuous."
The implications of this statement are large, for it multiplies out to a US GDP of 330E6 x
15E3 = 4.95 Trillion or about ONE FOURTH of the current USA economic output (19.39 trillion
in 2017).
Forget the Green New Deal, shrink economic output by 3/4 in the USA while drastically
lowering inequality to share the shrunken economic pie and one should observe a large
positive effect on future climate change while having a reasonable USA citizen
well-being,.
You stated, "Let's also ignore the fact that the sons and grandsons of the unionised
postwar generation for the most part subsequently rejected blue collar work no matter what
the pay. This is a sign of decadence I will grant you, and I am guilty as charged. "
This canard doesn't hold up in the face of empirical evidence. One example: 20,000 waiting
in line for lousy warehouse jobs at Amazon. The fact is, open borders and illegal immigration
are NeoLiberal tactics to promote wage arbitrage. In California, those impacted the most by
illegal immigration are African Americans. Whole sectors, such as hotel maintenance and
janitorial service, had been unionized, and had principally employed black workers whose
salaries enabled them to move into the middle class. The hotel industry welcomed the influx
of illegal immigrants willing to work for drastically lower wages. Black workers were
replaced and the union destroyed. Unfortunately, many in the US and globally have been so
propagandized about illegal immigration that even mentioning illegal immigration gets one
falsely labeled racist. in the US, Democrats use illegal immigration as a "demographic
strategy," which enables Democrats to remain in power while remaining wholly loyal to Wall
Street and doing nothing to ameliorate the misery of the bottom 90%.
Two important posts from Michael Roberts' Facebook.
About the USA:
The end of the American dream (if it ever existed)..
In America and also much of Europe, the current post-war baby boomer generation will be
the first that cannot expect their children to get higher living standards than them. The
percentage of 30-year olds earning more than their parents is at its lowest level ever
recorded.
Inequality of income is at its highest in 100 years, when you compare the share of the
top 1% to the bottom 90%.
The economic mobility rate in the US is now one of the worst in the developed world. In
the US, people in the bottom income quartile have a 40% chance of having a father in the
bottom quartile (in the father's prime earning years) and people in the top quartile have
only about an 8% chance of having a father in the bottom quartile, suggesting half of the
average probability of moving up and one of the worst probabilities of all the countries
analyzed.
About Japan and Germany:
Two key G7 economies continue to show a significant slowdown in economic growth.
German industrial production plunged 1.9 percent from a month earlier in April 2019,
much worse than market expectations of a 0.4 percent fall and after a 0.5 percent gain in
the previous month.
That was the biggest drop in output since August 2015, amid falls in the production of
capital goods (-3.3 percent), intermediate goods (-2.1 percent), energy (-1.1 percent) and
consumer goods (-0.8 percent). Year-on-year, industrial production dropped 1.8 percent in
April, following a 0.9 percent fall in March. Manufacturing output dropped 3.4% over the
year. Both exports and imports fell.
The German Bundesbank cut its GDP growth forecast for this year to just 0.6%, down from
1.6% at the beginning of 2019.
Japanese wages fell for the fourth consecutive month and overall household spending
slowed sharply. Unemployment, currently at record lows, is set to rise.
"... "A half-century ago, a top automobile executive named George Romney -- yes, Mitt's father -- turned down several big annual bonuses. He told his company's board he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today). ..."
"... "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself." John Kenneth Galbraith ..."
"... It is worth remembering just how much the companies of the mega-rich depend on tax paid for services and infrastructure. Where would Amazon be with out the road and US postal service? ..."
"... AOC is a ground-breaker on taxing the rich. I hope she takes on raising the corporate tax, which Bernie has hinted at. ..."
"... Neoliberal capitalism has gutted the American middle and working classes, leaving only gig economy jobs, like Saturn eating his children. Tax 'em and put their money to use on health care, education, the Green New Deal and job creation, affordable daycare, and rebuilding communities. ..."
NYT David Leonhardt "When the Rich Said No To Getting Richer". Quite a contrast. "A half-century ago, a top automobile
executive named George Romney -- yes, Mitt's father -- turned down several big annual bonuses. He told his company's board he
believed that no executive should make more than $225,000 a year (which translates into almost $2 million today).
He worried that "the temptations of success" could distract people from more important matters. This belief seems to have stemmed
from both Romney's Mormon faith and a culture of financial restraint that was once commonplace in this country. Romney didn't
try to make every dollar he could, or anywhere close to it. The same was true among many of his corporate peers. In the early
1960s, the typical chief executive at a large U.S. company made only 20 times as much as the average worker, rather than the current
271-to-1 ratio. Today, some C.E.O.s make $2 million in a single month. The old culture of restraint had multiple causes. One was
the tax code. When Romney was saying no to bonuses, the top marginal tax rate was 91%." That was under GOP Eisenhower. And jobs
here, unions strong, state college tuition tax subsidized-- the middle/working class had upward mobility and faith in the future.
Now, per the international GINI Index of middle class security and upward economic mobility, the USA ranks behind many other capitalist
democracies. What would George Romney say about Trump as president?
@Tom: Could it be possible too many loopholes and deductions are written into the system to make it effective? We have been
defunding the IRS and building a tax system that favors creative returns for decades. Maybe it's time to go in another direction.
@Ron Cohen "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently
in the nature of a warm personal gesture by the individual to himself." John Kenneth Galbraith
@WPLMMT; You mistunderstand. The 70% applies only to income OVER the threshold. So theoretically, the first 50 thousand (above
the standard deduction) could be taxed at ,say 10%, the next 50K at 20%, from 100K - 500K at 30%, from 500k to a million at 50%.
So the takehome from a million would be 715K, enough for anyone to live on. The exact details don't matter. It is the idea that
only income above a very high number would be taxed at the marginal rate.
If the goal is to raise revenue by taxing high earners at a higher rate, it seems to me that a good place to begin would be
to raise the effective tax rate on the rich to around 40% by eliminating the 50% discount on capital gains, and the depreciation
allowances for real estate investments.
Income tax rate increases at high income levels would help but they miss the point. The real wealth in this country is from
those who own assets, not those who draw a paycheck. The real deal would be to raise taxes on passive income and estate taxes
on an ever increasing scale where, say, anything over $1m in annual passive income and $50m in estate value is taxed at 50% or
higher. America is the land of opportunity; if those of us lucky enough to make it just leave it all to our heirs, they will have
little incentive to work and add value to their own lives as well as to society. Plus the velocity of capital that would occur
from heirs being forced to sell companies, real estate and other assets to pay estate taxes will place those assets in the hands
of those best able to maximize their value going forward. Paul and AOC, I hope you are reading this and plugging it into your
thinking.
I only wish the democrats would try to educate what the marginal tax means when they discuss policy in the public sphere. The
media is going to go nuts with this 70% rate without taking the time to explain that it's only an additional bracket at the tippy
top of the scale. This proposal wouldn't affect 99% of the country.
Every day I see and hear more about this young woman, I am more impressed. Disclaimer: I am a 68 year old white guy (Jew).
She is smart, articulate, talks truth to power, and is also very hot! A tough combination to beat.Her Twitter comebacks against
old Republican men are witty and hilarious, and hit home. I say AOC has a great future. She will learn the political ropes quickly.
In ten years, stand by to stand by.
A high percentage of wealthy people inherited their money. There are many examples of highly successful men who marry beautiful,
but not necessarily intelligent women. Their children's IQs are somewhere in between their parents IQ numbers. The end result
is greed-driven wealth management and less than honorable decisions, including buying politicians. Narcissism runs rampant among
this group with POTUS and some of his children as a prime example. Thomas Jefferson strongly felt that large inheritances should
be heavily taxed to prevent the harmful activities of the very rich from destroying our democracy. He was right.
We all benefit from living in this great nation of opportunity. Once you make more than 100K per month you should pay 70% tax.
It is OFFENSIVE that our great nation does not provide free education through college, provide health insurance (especially, since
there are people making millions ripping off the medical system), provide free daycare, housing and food for those who need support.
TAX INCOME OVER 1 million....if this is a disinsentive then there is something seriously wrong with you.
The U.S. has had a long history of a graduated income tax. In the Reagan era, the tax rate was at 50 percent having come down
from 70 percent. We are not funding government spending, and are instead running up substantial deficits. Moreover, as the baby-boom
population retires, social security and medicare will become unsustainable. While we can certainly reduce government spending
significantly (especially the sacred cow of military spending), we will need to increase tax revenues. Tax increases are inevitable,
and the most fair way to distribute the burden of increased taxes is through a graduated income tax. Those with the ability to
pay, should pay more. After all, they are certainly enjoying the benefits of a free and stable country more than those at the
other end of the income spectrum. While we can argue what the top marginal rate should be, it certainly should be 50 percent or
greater. We should also eliminate the special tax preference given to dividends and capital gains, which mainly inure to the wealthy.
To those whom much is given, much is expected.
@Jason First, no one is talking about taxing businesses at 73%, only individuals who are at extreme high levels of income.
Second, why do the rich always seem to think that the "unwashed masses" owe them something? Go to Canada where in addition to
a higher tax rate on your business you will also be paying for single payer health care for employees and subject to common sense
regulations that businesses here are no subject to. The grass is always greener.
@NR Agreed and same here with our money. How much does anyone really need, beyond a certain point? Wherever that point is,
I passed it decades ago. It's so disheartening to see how many people, often quite poor people, fully believe the mantra that
taking money from rich people will reduce jobs and growth. Very little of my wealth goes towards growth. It's in index funds and
T-bills and other instruments that mostly hold it until it's traded to some other wealthy person, hopefully at a profit to me.
About the only way my money leads to growth is through the start-ups I have self-funded over the years. And even these were sold
to large corporations (or they failed) by the time they had a few hundred employees. Most exits occurred with just a dozen or
so employees. Mostly the wealthy barter and trade pieces of their portfolios with one another. It's just a game.
The most obvious thought to share here is about the laughable efforts of people who don't know economics from shoe boxes to
try and sound more knowledgeable than a Nobel prize winning economist quoting... Nobel prize winning economists. The second most
obvious thought is that the threat/boogie man of all the "rich people" leaving the US for "greener pastures" is both ludicrous
and historically refuted. They simply DID NOT LEAVE in the 20th century, despite the economy becoming more mixed. They DID NOT
LEAVE when the top MARGINAL tax rates were above 75%. And they did not leave when their research (you know, there actually is
a fairly high correlation between affuence and intelligence...) revealed the FACT that the best places in the world to live are
almost universally even more "mixed" than the US, are almost universally further left than what passes for a "left" in the US,
and almost universally have significantly higher taxes. Folks, they just aren't going to bag up their bucks and blow town.
Before Ronald Reagan, the top marginal tax rate was 70%. The country was doing fine and the rich were doing well also. Reagan
reduced it to 50% and the rate was further reduced in subsequent administrations. For the last 40 years, there has been a massive
transfer of wealth from the middle and the bottom earners to the very top. A main reason for the income inequality that we see
in the country today. The top marginal rate should be raised above 70%. Money made by labor and money made by money (investment)
should be taxed at the same rate if we want to narrow the income inequality in the country and also find the money for investments
in infrastructure etc. What AOC is saying is nothing radical but common sense.
"You see, the mere thought of having a young, articulate, telegenic nonwhite woman serve is driving many on the right mad --
and in their madness they're inadvertently revealing their true selves." Actually, professor, the mere thought of having a young,
articulate, telegenic nonwhite man as president for 8 years DROVE many on the right mad- and in their madness they're inadvertently
revealing their true selves.
But rich people also benefit from raising their taxes in that the society as a whole takes a huge leap forward. Investment
in our society leads to lower crime rates and less incarceration lead to a bigger tax base. Improvements to infrastructure and
health care reduce enormous drains on the economy. Investment in education increase the value of labor, and most of all eliminating
the deficit makes us strong at home and abroad. Everyone wins.
@Red Sox, '04, '07, '13, '18, It is worth remembering just how much the companies of the mega-rich depend on tax paid for
services and infrastructure. Where would Amazon be with out the road and US postal service?
@Billy Walker At less than $100k/year in income, you needn't worry. In income tax terminology, the term "marginal" means a
rate that's applied only to income above a high threshold affecting the top percentile of earners. In your IRS Form 1040, you'll
note that you are taxed at a certain percentage based on your adjusted gross income (AGI). Your AGI places you in a tax bracket,
or income range. A marginal rate of 70% would apply to the highest tax bracket, because it would affect only those dollars that
exceed a certain threshold (such as the $10 million mentioned by Ocasio-Cortez) - a threshold most of us will never even imagine
earning, much less topping. Don't let the number scare you, Billy Walker - unless you hit the Powerball.
Professor Krugman, I am delighted that you are back to writing what you know best and help the nation understand what is behind
the noisy rhetoric. Ocasio-Cortez is an impressive politician. By getting good advice from experts, whether it is economists,
sociologist, climate scientists and political philosophers, she will deliver to the congress a much needed intelligent and sunny
feedback to propose and implement good policy. Please seek her out and offer her your advice. People like Saez, Piketty, Reich,
Stiglitz and yourself are treasures (except for the second and perhaps the first national treasures) politicians should tap into.
We need the GOP out of our lives. Rational taxation policy is one of the key elements of a successful Democratic government. It
will help pay for all the good ideas: universal healthcare (you are lagging behind there), free public education from Kindergarten
through College, environmental sanity. Regulation of Big Pharma, Wall Street (tax algorithmic trading for one, bring back G-S
for another), Big Tech and of course Big Healthcare will all help getting back our country to sound governance of the FDR era,
tax policies included. Thank you in advance.
@Charlie in NY I do get tired of this type of comment, 'outsourced their military defence to the US'. The cold reality is that
US administrations have very much wanted to have the largest military and a stunning number of military bases around the world.
Your governments have embraced the role of world's police force including covertly (and openly) pursuing regime change in many
jurisdictions. Over the decades your country has very much wanted this role, at the expense of other important priorities and
needs in your country. Don't blame the rest of us for wanting a more balanced approach to military and other spending. Your wars
in the Middle East, which have nothing to do with Europe, have cost you tremendously.
AOC is a ground-breaker on taxing the rich. I hope she takes on raising the corporate tax, which Bernie has hinted at.
Chris Rock once explained, "Shaq is rich, but the white man who signs his check is wealthy." Raise Bezos' income and capital gains
taxes, sure, but go for the big money -- tax Amazon's profits, assets, stock trading, acquisitions, and end all tax break/corporate
welfare. Apple spent its Trump tax break buying back stock to enrich stockholders and executives; Sheldon Adelson put his on Republicans
in the '18 election. Hedge funds bought, dismembered and stripped, then bankrupted Toys R Us and Sears, and another is ripping
off Puerto Rico.
Neoliberal capitalism has gutted the American middle and working classes, leaving only gig economy jobs, like Saturn eating
his children. Tax 'em and put their money to use on health care, education, the Green New Deal and job creation, affordable daycare,
and rebuilding communities.
@Michael Evans-Layng, PhD Yes, I agree with this comment. It's not even possible to conclude that there is a correlation here;
my guess is that a correlation would not hold up to statistical analysis. However, it is certainly clear that, "high taxes on
the wealthy and solid economic performance can coexist just fine". And that's all one needs to know, as a higher marginal rate
will bring many benefits without having to hold the burden of being a single-variable driver of growth.
If 20% of this country understands what marginal rates are, then I'd be surprised. I have been a financial professional for
30+ years, and I rarely have a client - no matter how sophisticated - that understands it. And somehow I wonder how much of Congress
understands it. Our country experienced strong growth and a healthy economy when marginal rates were high. And the concentration
of wealth did not exist back then. We are just rationalizing a greed is good mentality by using terms like 70% tax rate - to scare
people - instead of just saying raise taxes on the top 5%.
The Republicans are looting the country with no one stopping them. The rich control all three branches of our government, which
explains our current fiscal policy. The rich obviously don't want to be part of America other than to own it.
@MV This reminds me of when, I believe it was towards the end of the last recession, I accidentally found myself on a Republican
phone list. I got a call during which they were pitching tax breaks for the wealthy saying how it would create jobs. My response
was to say that they wouldn't add jobs, just spend it on more Hermes scarves. (They go from several hundred to a couple thousand
dollars.) I thought I was wise-cracking but sure enough I saw in the news a day or two later that Hermes stock was doing remarkably
well.
@Jason, the rationale here is that society is better served with more equitable wealth distribution, as seen in Scandinavian
countries, rather then the obscene wealth disparities seen here in the U.S. Your answer to this is, if you try and raise my taxes
in order to benefit society as a whole, rather then just me I will run to anywhere that has the lowest tax rate. Well this is
the mantra of every wealthy individual and business globally and as a result we have a tax base comprised of higher rates for
middle income Americans who are squeezed financially in every direction and actually need the money, who carry the financial burden,
while the wealthy use their money to buy political influence and over time further lower their tax rate for themselves and the
business's they own, thus skirting their financial responsiblity to society which they benefit from. The rich have done plenty
wrong, that is the point. We would not be in the horrible situation we are in now as a country without the sociopathic levels
of greed seen in the upper echelons of wealth. Its time to take back the country from people like yourself who would rather run
and preserve or hide their wealth then be willing to pay their fair share of taxes.
@Allan Reagan I doubt very seriously that you or just about anyone else regularly works 75 hours a week. That would very roughly
translate into just under 11 hours a day seven days a week. Meaning you are at the office by 8:00 AM and leave around 8:00 PM
seven days a week. I am being very conservative in allocating only one hour for eating, bathroom breaks, personal phone calls,
etc... Your wealth would likely mean a mansion in the suburbs. Figure a minimum of 45 minutes each way drive time. Total round
trip an hour and a half. An hour to shower, shave, have coffee and quickly check the daily newspaper. I have allocated zero time
for dinner time, shopping for clothes or food, etc... Zero family time. The math just does not add up. If by some freak of nature
you really do work 75 hours a week then you are an all-time terrible husband and/or father. No matter how big your bank account
is or how many houses you own. Ask your family....would they rather have less things and you only working 45-50 hours a week or
more things. If they even care anymore. Promoting absentee husbands and fathers is certainly not the way to craft a truly civil
society.
Zillionaires work harder by investing smarter. Investing smarter often means certainty in return on that investment. How better
to insure that certainty than to invest in a "low tax" congressperson? Much easier and better expected return than say R&D or
infrastructure.
@Barking Doggerel Intel is a prime example. The first Intel CEO who was a Republican, was a Bush supporter named Paul Otellini.
He famously told Steve Jobs that Intel did not want to make the microprocessor for the iPhone. Intel then went from being the
number one maker of microprocessors to being the number two. The second Intel CEO who was a Republican, was a Trump supporter
named Brian Krzanich. He was an "expert" at manufacturing. Under his leadership Intel went for being the number one semiconductor
company to being the number two. Apparently Republicans have a penchant for turning everything into number two.
@vulcanalex: As a frequent commenter here, you SHOULD know about marginal tax rates, namely, that even with a top tax rate
of 90%, nobody would pay that on their entire income. In the days when that rate was in force, it kicked in at an income level
that would be equal to about $4 million per year. In order to avoid that, rich people upped their charitable contributions and
did other things that might benefit society. Best of all, none of them starved.
@Andrew You are right - Warren Buffett stated that he pays less income tax than his secretary as his income derives from capital
gains and dividends, and hers from employment.
His article was about personal income tax, not business tax. Unless you relinquish your US citizenship, you will have to pay
income tax regardless of where your business is located. The point of discussing an increase in income tax on the ultra rich is
to be able to fund social security, Medicare and Medicaid, and the other federal programs and agencies. Why is this relevant?
Because Republicans routinely cut taxes for the wealthy and then say they need to cut funding for all these programs to balance
the federal budget. If we can generate sufficient revenue for the federal government then we don't need to cut funding for all
these federal programs.
The Trump tax cut has added $2trillion to the national debt -- -an increase of 10%. The tax cut was supposed to pay for itself,
because the increase in wages and profits would provide enough in tax revenue ( even at the lower tax rate). The deficits would
shrink and eventually go away. None of these fantasies have ever been realized. Not under Reagan, W, or Trump. Its time to Ms.
Cortez-Ocasio's "insane" ideas -- a 90% tax on income over $10 million per year is no crazier than these Republican tax schemes
and the "suffering" only affects a tiny nunber of citizens. A return to Eisenhower-era tax rates hardly constitutes Bolshevism.
There are a lot of comments here criticizing AOC and Professor Krugman over the idea of such a high tax on the mega-wealthy.
To them I simply say this: You can't get away from our country's history. We were collectively at our most prosperous as a nation
for the twenty-five years after the Second World War, during which time our middle class was the envy of the world. During that
time, taxes on the very rich were in line with what AOC is proposing. Corporate taxes were also high. Union membership was also
high. Our country was much better off for all of those things. I'm already a fan of AOC. She's going to make a lot of right-wing
heads explode.
I'd be interested in knowing to what extent much higher tax rates on the wealthy drive severe tax avoidance behavior, like
parking money overseas. Clearly higher rates would have to be accompanied by stricter enforcement and tighter rules to avoid losing
the expected revenue windfall.
@hammond Good point about the postwar conditions that went along with high marginal rates. But even if we avoid the mistake
of concluding that high rates caused growth, there is still no reason to conclude that high rates impede growth.
Maybe a higher marginal tax rate with stricter enforcement woudl have driven Trump out of the country and saved us the horror
of the last two years. :-)
@Barking Doggerel: "And the very wealthy I've known are not smarter, more creative or virtuous than the folks who work for
them or for other wealthy executives." That goes for politicians and economists, too.
What is stupendous wealth good for? The marginal utility of wealth is quickly decreasing for ordinary survival goods like food
and tents. But very expensive goods can only be had by the most wealthy. To get the most expensive and desirable things you must
outbid other wealthy people. If you want to influence a key senator, for instance, you're going to have to come up with more than
the opposition. If you want an original Van Gogh to impress others, you're going to have to outbid everybody else. If you need
a kidney transplant quickly it won't be cheap. Wealth buys power. A mere millionaire nowadays only has leverage against common
folk but is seen as a whiff by any billionaire. Power is roughly proportional to wealth, it's a relative thing. Those more wealthy
can always kick sand in your face and that's still aggravating despite that you can kick sand in the faces of the myriads of the
poor. The wealthy believe in the legitimacy of wealth and strive to purify this. There are always illegitimate jerks trying to
beat the system, trying to circumvent the power of wealth. Jerks yammer about things like truth, science and justice. What they're
really trying to do is get power without properly paying for it. It's necessary to put down those upstarts who whine about such
things. This is another thing wealth is good for and another reason why you can never have enough.
You quote economists in defense of your argument, or as the Republicans would say 'pointy-headed intellectuals'. But if Ocasio-Cortez
is crazy, what would the Republicans call Dwight David Eisenhower? He thought a marginal tax rate of 91% was just right. So he's
obviously far crazier than Ocasio-Cortez. Dan Kravitz
@Rima Regas The Rich really do believe they're entitled to rob the poor, and they've created various laws that make it easy
and legal, which further entitles them, or so they believe. It's all part of the Rich-person alt-reality - a perk of being rich.
Just a reminder – and of course this is obvious to most readers – but neither the article nor many of the comments make it
clear that the 73% or 80% is the last step of a progressive scale. Krugman and AOC are not proposing that ALL income be taxed
at that rate. The maximum rate would apply only to that portion of a taxpayer's income above a certain dollar amount. The 73%
or 80% rate could actually be set at a very high level of income, say $1 million or more. The benefits to all would be enormous.
The detriment to high earners would be small.
@vulcanalex And what is good for the country and your fellow citizens? I would hope that it is not all about you. If one's
goal is to have a vibrant economy, good infrastructure and education are needed. I have two suggestions as to where to look for
the needed funds: corporations (especially those paying employees less than a living wage and depending on taxpayers to provide
food stamps and subsidize health care) and the very high income individuals. You may not be in the latter class. I believe a fact-based
national conversation about tax rates (individual and corporate, earned and unearned income and capital gains) would benefit the
nation. I am not optimistic this could occur without significant leadership.
Paul, I must plainly admit, not too often do a shed a tear when reading, your article today was such a moment. It was on a
sidewalk in Paris or New York to celebrate my daughters birthday, that surfaced as I read on. Pretty sure it was Paris, as we
walked along, I noticed a family. I looked only at the father - sitting on some cardboard, his two children and his wife beside
him - I gave what i could and his eyes spoke thanks and my eyes spoke hope for his obviously wonderful family(and himself as well).
Paul, as the good man said "the times they are a changin" and I believe with all my heart that Equality really needs to be spoken
of at many dinner tables. Sincerely, Peter
Very interesting how AOC understands economics in this country, and how many GOP'er bugaboos are about to get skewered :) Why,
we might even find ourselves in a public discussion of democracy and unrestrained capitalism being polar opposites, with GOP'ers
having to admit there was democracy in this country - which heavily restrained capitalism - long before the vaunted animal spirits
of free marketeer piracy descended upon us. As in, democracy provided the environment for capitalism to succeed, not the other
way 'round, and that democracy should take precedence over free marketeering piracy. After all, the original settlers and colonists
only allowed corporations to exist with charters which had automatic expiration dates, corpoorations were only allowed to exist
for the purpose of some public works project, and a corporation's charter was immediately revoked if it was found to be trying
to influence a political campaign; in no sense of the word were corporations people, too, my friend (quoting a famous American).
My, my, my, what an interesting history discussion is about to occur - could Elizabeth Warren please be the Professor, Professor
Professeur K. ?
Hate to disagree, but there's clear evidence AOC doesn't understand economics. For instance, she has argued it's impossible
for her to find affordable housing in Washington DC. Whereas it's become plain that she is living rent-free in the heads of many
Republicans.
@Red Sox, '04, '07, '13, '18, The rich that benefit from profits of large companies, like Walmart for example, do not do the
actual work themselves. Instead they rely on the working poor to create their profits and then they hoard it all, while the rest
of us provide money for food stamps etc.
@Kenneth Johnson The 73% rate would only be on income above a stipulated amount, say $10,000,000 a year. Are your yearly earnings
above $10.000.000 a year? The problem with unregulated capitalism is that it leads to people eventually wanting to impose an unrealistic
form of socialism. Experience strongly suggests that a mixed capitalist-socialist economy is as good as it gets.
@MV "Those who get that little extra $1,000 will easily spend it on a necessity, like an appliance". Exactly. And, given the
tax giveaway the Republicans gave to corporations and the 1% last year, there probably won't be that little extra $1,000 for the
appliance buyers this year. They'll probably owe.
@SandraH. Exactly. Impose high marginal rates on capital gains at the same time. We could make them a bit lower than income
tax rates to incentivize capital investment. But now, even with low income tax rates, the difference between capital gains and
income tax rates is a scandal--basically a fat loophole for rich capitalists.
@Billy Walker How much of Jeff Bezo's (for example, nothing against him specifically) billions in annual income would have
been possible without the existence of the interstate highway system? How about without the existence of the US postal service?
How about without the internet (it wouldn't exist without DARPA's pioneering research)? Seems to me the government and US taxpayers
were equal partners (or greater) in his earnings.
I would be more inclined to not laugh at Ms. Ocasio-Cortez if she had articulate and well reasoned thoughts. Instead she spouts
leftist talking points and when asked for detail or context she almost always struggle to provide it. But because leftists like
what she is saying they give her credibility just like Mr. Krugman.
My father was a CPA during the years from 1947 to 1983. We had this discussion about tax rates early on when the highest rate
(during the Eisenhower administration) was 90%. When I asked him about it as a child, he said simply that no one paid 90% of their
income to the government. First of all the tax code had many more loopholes than later on, and secondly, he taught me the idea
of a "graduated tax", which we still have on the books. All of us pay 10% on the first 15,000 or so that we earn, then 12% on
the next 10,000 or so, then 15% on the next, and so to the top rate of 36%. The problem, as AOC and Prof. Krugman point out is
that those at the very top of the income scale pay practically nothing compared to those below. The same is true when speaking
about the Social Security tax (FICA) which is something like 6% of you pretax income and is capped, at I believe, around 128,000.
Which simply means that if you make 100,000 a year your paying 6000 into the system, if you make 10 million, your still paying
only around 6000 into the system (or about 0.0006%).
So much greed by these socialists. No, you do not have a right to someone else's properties simply because they have more than
you do. The rich already pays an oversized amount of taxes, while the bottom 50% pay zero in federal taxes. That does not sound
fair. In America, everyone is free to start a business and make money, and most billionaires in this country are self made. They
worked harder than anyone else. Bill Gates, for instance, started Microsoft at age 18, when most other guys his age were wasting
their time at meaningless night clubs. He worked hard and long, and for ten years, did not take a single day off from work. Eventually,
it began to pay off. The the greedy socialists came out of the woodwork, demanding to "tax the rich" to pay their "fair" share.
Well, the rich already pay more than their fair share.
The comments to this piece have reinforced my belief that a sizable portion of American taxpayers do not have a clue as to
how the calculation of their federal tax bill is actually structured. At the very least, the term "marginal tax rate" is synonymous
with "total tax rate" for most. To those who are trying to effect a sane change to our country's taxation policies, I say you
need a structured PR campaign to raise awareness of just what the heck "marginal tax rate" actually means. You could start by
showing how, even under current rates, it's possible for someone making an average income (Warren Buffett's secretary?) to pay
a higher effective/total tax rate than someone (Warren Buffett?) whose income puts them in the top 0.1%. If you don't believe
me, next time you're discussing taxes with friends, ask them the following math problem: John's adjusted gross income is $1M;
The top marginal rate on that income is 37%; How much tax does John pay? If the answer you get is, $370k, well, that's my point.
Most people won't say that there's too little information given to solve the problem. (This is, the current top rate on that income,
by the way.) Once a sizable majority of Americans actually understand this, getting the support to enact a top MARGINAL rate of
70% shouldn't be too hard of a sell.
@Charlie in NY The Scandinavian countries are facing a whole lot less difficulties than the US. The military spending argument
is a red herring. The US deal with NATO is/was that the Europeans would provide the cannon fodder for WW3, while the US would
provide the nukes and high tech systems. This allowed the US to funnel money into the defense industry, while not maintaining
as large an army as would otherwise be required. Back out of NATO, and all those European countries will "go nuclear" as fast
as they can buy the technology from Israel. Is this in the US's best interests? We didn't think so after WW2. The saying was:
NATO was designed to Keep the US in, the Russians out, and the Germans down.
@Freda Pine the top rate 70% would not apply to you and if it did, the author of this opinion piece and most of its supporters
would likely agree that you should not pay anywhere near 70% if you are making 300,000$
"We can have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can`t have both."
--Supreme Court Justice Louis D. Brandeis A fundamental reason for higher tax rates on the rich.
I think it would serve progressives well to clarify their rhetoric and policy proposals and speak about raising taxes on the
ULTRA RICH? I think there are many people who might be considered "rich", who already pay quite a bit in taxes, but aren't earning
enough to engage in the complicated tax-dodging schemes that the ultra rich use. They bear the brunt of a tax code that allows
ultra rich earners off the hook while they pay a lot in relation to their earnings. I know many upper-middle class people who
might otherwise agree with Democratic policies, but when they hear "tax the rich" they vote Republican because they can't imagine
paying more in taxes. It's the Jared Kushners of the world who should pay more, not the small business owner with a few million
in a retirement portfolio.
A more pedestrian way to view Prof. Krugman's argument is to compare social unease and income/wealth distribution during what
many, including conservatives, regard as the nostalgic fifties (fifty years ago, they commonly were labeled the fabulous fifties)
with those of today. The 1950s, while it certainly had its problems and the civil rights movement still was in its nascency of
emerging from 150 years of overwhelming oppression, nevertheless marked a decade of arguably America's most prosperous period
when the prosperity metric is distributed proportionately across all socio-economic classes. The wealthiest lived very well indeed.
Private railroad cars still adorned rail lines before the advent of private jets. While extreme poverty existed, especially among
urban blacks and other minorities, and some rural communities, for the most part, the vast middle class was progressing and living
comfortably. Top-tier marginal tax rates for large corporations and the wealthiest hovered close to AOC's proffered 80%. Most
importantly, large corporations still operated on the principle that they were accountable to their stakeholders, i.e., investors,
employees, customers, suppliers and communities, not solely to shareholders. Companies offered retirement pension plans rather
than 401ks and they honored them. Management was compensated reasonably for their services, not with get-ultra-rich schemes that
were backed by ludicrous fail-safe parachutes for malperformance. AOC is right.
@hammond Look at the dates on the graph, the high growth came AFTER 1960. Which war are you thinking "supercharged" the manufacturing
sector? As far as causality and causation, gee wiz, this is a newspaper, not an academic journal, the man can only give so much
evidence without losing readers. For a more complete presentation, read Jacob Hacker, "American Amnesia: How the War on Government
Made Led Us to Forget What Made America Prosper." Government investment is critical for high growth rates, and the wealthy need
to pay taxes for that to happen.
@Jason The rich do something wrong every day. From the perspective of someone concerned with labor rights, which perhaps you
aren't, they receive compensation vastly disproportional to the amount of labor they expend, and outrageously disproportional
to the amount of labor expended by people who aren't rich who work equally long hours and make similar sacrifices. That is what
is wrong with the notion of a free market. It is immoral and unethical, and you have to put an academic faith in the superiority
of the free market system above your concern for what's right in order to participate in a system like that, and most of us either
do or simply don't have any choice in the matter. Not everyone cares about that. From the perspective of someone who is just concerned
with incentives and outputs, who has bought into the notion of a free market system, what is wrong is that, as Krugman points
out, we don't operate within perfectly competitive markets, not even close. From that perspective, the rich profit from a system
that naturally favors them completely independent of variables like labor, risk, demand, etc. I don't guess you have to go to
confession for having done something wrong, but a little humility and perspective never hurt.
@Bruce Rozenblit " To top off the entire royalty thing, much of their wealth was most likely generated from tax breaks, tax
giveaways, tax shelters and the like. Odds are that a substantial portion of their wealth was never taxed to begin with and with
the loss of the estate tax, they get to will it to their heirs tax free." Example #1. Trump and his family. Example #2 Mitt Romney,
whose Bain Capital wealth derived from tax breaks earned by bankrupting once solid corporations and raiding their pension funds,
etc, then delivering the bill to the tax payers to pay through the Federal Pension Insurance agency and other tax payer funded
sources like welfare, Medicaid and unemployment insurance for those who lost their jobs and benefits.
Bravo, AOC. Hopefully this will mean growth in the middle class. Many of the very wealthy don't like to admit that their wealth
was largely contingent upon economic and tax policies that drove many from the middle class down to have-not status. Hopefully
this kind of policy will right that wrong.
Squeezing the top 5% will not be enough to fill the Federal coffers. The super rich have superbly qualified accountants. In
our borderless economy, tax havens and loopholes galore to attract and retain rich folks from all over the world. They exist right
now but the incentives to hide from Uncle Sam are far less than the overtaxed, nanny states of Europe. Cortex the conquistador
needs to earn money on her own by working first, pay taxes, meet payroll or know people who are not on the doll in order to understand
taxes make the wealthy flee. And, investment will sink. Talks like this has already made her the East Coast counterpart of the
elder stateswomen of stupidity, Rep. Maxine Waters. It is hard to recover from absurd public pronouncements that are etched in
hard disks forever.
A 90% tax rate on anybody doesn't seem to be a fair number. Nor 80% or 70%. Sorry but how about institute a luxury tax penalty
on corporations who give out huge CEO payouts. Works for the NBA
The unstated but glaringly obvious assumption in Paul Krugman's and Sandy Ocasio's worldview is that "The Rich" are not citizens
and human individuals with their own rights and interests, and families for which to care, but rather livestock to be farmed,
milked, and slaughtered for the sustenance of everyone else -- under the wise instruction of Paul Krugman and Sandy Ocasio, of
course, who as the will not be required to make the same sacrifices they demand of their fellows amongst The Rich. It's appalling
in its entitlement. No thanks, Comrades.
Diminished utility? How can they get that fourth mansion, complete with a set of cars and matching clothes in the closets of
all houses? How can they get a second, bigger yacht? How can they get that private plane upgrade? That costs tens of millions.
That is their utility. It just comes with much higher price tags. They need those things to be "part of the world" in which they
live. That is how they can lend a plane or a yacht to a politician. It is how they show they are real people, not just those little
tax payers. Readers may think I'm exaggerating here. I'm not. That really is their world. We are so far outside it we never see
it, but it does leak into the press, only to be hushed up. Remember Mitt Romney's car elevator? That was paid for with the retirement
funds of workers stripped out of closed companies wrecked by Bain Capital, a vulture capitalist firm. They have no retirement,
but he's got a car elevator. Utility.
Luke 12:48: "For unto whomsoever much is given, of him shall be much required." You'd think all those good Christians on the
right, even if they are not that much into economics could find some direction from the New Testament. Trickle Down is a Big Con.
The president is the Grifter in Chief. And the GOP knows it. They just don't want to kill the orange goose that laid their tax
rates (among other things).
Assume the Republican congress had drastically cut taxes on everyone named Howard (either first or last name). Our extra spending
would have stimulated the economy and created jobs. Could the reason that Republicans did not do this is that we Howards did not
band together and give the Republicans massive campaign contributions? If we had, I am sure the Republicans would have claimed
that the tax cuts to the Howards would have paid for themselves. This is the intellectual depth, or lack thereof, at which the
Republican Congress operates.
The unfortunate truth is that there are really three kinds of Republicans when it comes to tax policy. The ignorant; those
who have "faith" in the conservative shibboleth that low taxes drive growth and everyone benefits. Like most faithful, they deny
facts and endorse lies that support their superstition. There are the brainwashed; people who might be capable of rational thought,
but have been reciting the low tax mantra for so long they've stopped thinking about it and just repeat it from rote. Then are
the cynics; people who actually know they are selling snake oil, but don't care because it is so lucrative to them and their financial
supporters. These are the worst. They knowingly create misery and decimate the middle class for own economic advantage. It is
time to put an end to Republican rule.
Never-mind the validity of Alexandria Ocasio-Cortez's positions, which I totally support, but it's hard to understand the right's
hysteria surrounding AOC, until we remember their similar hysteria surrounding Barack Obama. Let's not forget that he was a secret
muslim who was born in Kenya and secretly wanted to take away our guns. What most irritated them was the fact that he was an articulate,
charismatic, highly educated man who was BLACK, and try as they might, they were unable to make the lies and stereotypes stick.
Now, we have an articulate, educated WOMAN who is HISPANIC, and they are breaking out the same tired bag of tricks. President
Obama, both because of his character but also because he was highly conscious of the image he had to portray being the first black
president, was always diplomatic and tended to ignore these racist attacks. AOC, however, grew up during the Obama years, and
she saw what that battlefield looked like. I love the fact that she always fights back, quickly, intelligently, and bitingly.
And each time she does, she shows up her critics as the hypocrites they are. Bravo.
@Freda Pine I'm thinking you have absolutely no idea how taxation works. No one would pay 70% on their income. They'd pay 70%
on income over $X, which in AOC's instance is $10 million. But... let's take your wrong approach and say it's a flat 70%. You
wouldn't "get out of bed" for $3 million? You must be quite rich. Not only would I get out of bed for $3 million, I'd show up
early and go home late. At $300,000, you would be paying about 30% as a GRADUATED tax, not flat. Please, if you're going to post
on this stuff, at least familiarize yourself with the BASIC concepts in taxation, like marginal versus effect rates.
I don't give a hoot about female, of color or young. If she has solid ideas, that's all that counts. If taxing the billionaires
works, I'm all for AOC. Personally, if you look at politicians for entertainment value, I much prefer her roof top steps to watching
a mouth unconnected to brain standing in front of "that dump" the White House.
@Payton Some politician's pipe dream legacy project... you mean like a certain Border Wall? And everything you've talked about
with wanting to keep track of money - X% in Education, Y% for Healthcare, Z% for Military Spending, is written down in the form
of the Congressional Omnibus Spending Bill, passed every year. It dictates what money goes where as a combination of smaller appropriations
bills. I suggest you read it. You might learn something. I would rather trust a (functioning) government with my money than a
collection of wealthy private individuals or corporations, because I can participate in government. I can vote my President out
of office.I cannot do anything to tell Tim Cook, or Jeff Bezos, or the Waltons to use my money more efficiently, or that I disagree
with what they're doing. Conservatives love to whine about government inefficiency any say the private sector does it better,
but that's simply because the private sector cuts corners to do it faster and cheaper. Those cut corners get people sick when
water infrastructure breaks down prematurely due to mismanagement by a private utility company, or a large farm corp dumps its
waste into the river system instead of going through proper disposal procedures. The government is not necessarily inefficient
- it is Thorough.
@Billy Walker With all due respect, Mr. Walker, if taxation is theft, it is theft regardless of the percentage taken. Your
notion that taxation becomes theft at a certain percentage is... just your notion.
@Mjxs "When did we begin to believe that mega-millions to CEOs will magically transform into wealth for all...?" We don't believe
that, but we've been told that we do. Additionally, some of our less useful democratic institutions--the Senate, the electoral
college--guarantee ongoing, electorally unearned power to the side that propagates this falsehood.
@SJP. In fact the EU and Scandinavian countries are facing great difficulties bordering on stagnation or worse in some cases.
It is also useful to recall that since the end of WWII, these Western countries mostly outsourced their military defense onto
the US - that huge savings was what underpinned their growth.
@George There's nothing like an anti-tax conservative who didn't even start fact-checking his own ideological prejudices ...
The wealthiest 1% don't have a $200k income, but at least a $390k income, with an average of $1.5 million. Now can you please
explain why asking billionaires to start paying back the debt (in part caused by massive tax cuts given to them, by the way) so
that people who were never lucky enough to earn so much can at least have access to decent healthcare and education would be a
bad idea ... ? How about putting America first, rather than the wealthiest 1%? Any objections?
November 2018 has Come; 2020 is Coming Vallejo Jan. 6
It's great to see that the age-old competitive male trick of casting every smart, well-spoken, attractive, or youngish woman
as a dumb "nit-wit" has lost its power. People who aren't unsuccessful right-wing males know that such men are simply frightened
by ambitious, smart, up-and-coming women. And, at long last, today's ambitious, smart, up-and-coming women are not one bit intimidated
by men who insist on taking absurd potshots at them. This is wonderful progress! Go Nancy, go AOC, go freshman House Democrats!
@Freda Pine: No, economists are not physiologists. They're not philologists or entomologists either. So what does physiology
have to do with any of this???
@Kenneth Johnson You are missing lots of things, including the fact that under such a system there would be more tax brackets
for higher incomes (rather than one bracket for all incomes over $500k.) And the tiered system would still apply, so the 73% rate
would only affect income above a certain amount. Re: moving out of the country, if your income is being generated in the US, it
would be subject to US taxes. Maybe use your affluence and tax savings in Texas to educate yourself?
Let's see if we can understand why tax cuts for the Rich or more generally, income and wealth inequality, is bad for the economy.
Economists have a concept called the velocity of money. It is the frequency, how often, that money changes hands in domestic commerce.
Here's an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts
the bucks in his basement, and forgets about it, that doesn't help the economy at all. That Billion has a velocity of 0. Also,
if Scrooge loses a financial bet to Daddy Warbucks, and the Billion moves from Scrooge's basement to Daddy's, that is a change,
but the velocity does not change because it is not a useful change. It doesn't affect commerce. Money going to the Rich has a
lower velocity than money going to the non-rich. The Rich spend a lower percentage of their money. What's a guy or gal who already
has so many houses he can't remember how many & an elevator for his horse gonna spend his money on? The answer is he is going
to use it to speculate.There is a correlation between inequality & financial speculation.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661746
Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain't
a good thing. Since 2007, the velocity of money has plunged.
https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-decrease-in-the-velocity-of-money /
I own three businesses and I as I write this on a Saturday night in a hotel away from my business trying to expand it I can
assure the professor I would not be doing this at a 70 percent tax rate!the ivory elite economists who write this drivel has never
owned a business created one job or made one payroll. Did you just see the last jobs report the growth rate after trump cut taxes
.
@Fourteen This sense of entitlement by the white patriarchy is rooted in America's original sin. From an essay I wrote in 2016:
"Now, there are three things that we must deal with and we're going to transform this neighborhood into a brotherhood. We've got
to deal with the problem of racism. We've got to deal with the problem of economic injustice or poverty. And we've got to deal
with the problem of war."" The issues King delineated for his audiences in the months leading up to his assassination are the
very same issues present day candidates are grappling with – the only difference is that in the intervening fifty plus years,
the three fundamental problems identified by King have grown exponentially. Inequality is far wider today. Today's poverty is
far deeper and encompasses a much wider segment of America's population. https://wp.me/p2KJ3H-1Tb
Nothing can change until we have truth, reconciliation, and reparations because if it is OK to go on without apologizing as a
nation, then it is OK to go on exploiting the classes in cycle after cycle of economic ups and downs and cycle after cycle of
racial divide and conquer.
I read this article as I sit on a patio at my Airbnb in Maui, looking out across the ocean. My girlfriend and I worked hard
and tucked away any extra pennies we had for this vacation - doing so for a couple years. We are here to celebrate her 30th birthday,
and it feels rich and lovely because this trip was hard-earned and marks a goal accomplished. It is unlikely we'll take another
vacation like this for quite some time. The thing that strikes me the most as I read this article is that I sit here looking across
the water toward the island of Lanai. Larry Ellison of Oracle owns 98% of that Hawaiian island (where the Dole pineapple plantation
used to be). It is not a small island. Why do the rich need such things? Why is it reasonable to say that an individual man should
even be able to purchase such a lavish, absurd amount of this beautiful paradise (and then only really allow the extremely wealthy
to visit at the Four Seasons there, where a "bad" room runs over $1000 per night)? Why? The rich are not taxed enough.
I'm not sure if this is still strictly true, but as of a couple of years ago the richest woman in the USA was the widow of
one of Sam Walton's (i.e., Walmart) sons. In other words, the wealthiest woman in America was the heiress of an heir of someone
who actually created a business. In case that isn't quite clear, the richest woman in America is someone who never, as far as
is known, never did a lick of actual labor in her life. What is utterly astonishing is how many people have been brainwashed to
believe our system is actually a meritocracy, and taxes on the wealthy are taxes on people who earned their wealth by the sweat
of their brow. . .
@Socrates The Rich have rigged the system to favor themselves against us. They don't know how to make money the old-fashioned
way. They'd be lost in a competitive market. Instead, these Takers live in an alt-reality echo-chamber slapping each other on
their backs for being "Makers." The Progressives see them clearly as parasites.
"...Republicans almost universally advocate low taxes on the wealthy, based on the claim that tax cuts at the top will have
huge beneficial effects on the economy." Trickle-down economics, voodoo economics; when will people stop accepting this drivel,
which was disproven by Reagan? As for the average middle-class American, what I find remarkable is that most people want lower
taxes AND more services; I read letters in Newsday about it all the time. Totally illogical.
@Andy The quote that comes to mind is, "It is difficult to get a man to understand something, when his salary depends on his
not understanding it." - Upton Sinclair
@Bruce Rozenblit I would add another prime motivation beyond wealth and power and control. For those with wealth and power
in excess of what they could ever need, why do they continue to arrogantly pile it up regardless of the cost to others? I believe
it is fear - the fear that people will object to the imbalance and try to right it. Great wealth and power engender insecurity.
The Rich are afraid of us.
@Plennie Wingo, true. Our first tax reform should be to tax all income at the same rates. We should also eliminate different
tax schedules for tax payers, depending on their marital status.
@Barking Doggerel Yes and no. In today's world, male privilege has given you that view. However, and this is not a small point,
that is YOUR view. In reality, MOST people at the top marginal rate that *I* know are not merely CEOs. The people that I know,
peeps that would qualify for this tax hike, are the upper managers, high wage earners, typically at the height of their career.
They tend to be first generation high earners...otherwise they would not need to work in this manner because their investments
would otherwise feed them. They do not have independent wealth but they are trying desperately to accumulate it. Because they
typically live in one of the two coasts, they tend to have high property taxes and a high cost of living. They have the means
to pay for their kids education, but they worry about their children ability to build on their current success. In my experience,
the high earners I know come in different flavors and nationalities. They only thing they all have in common is achievement: academic
and economic. But I will tell you something I do know about the CEO types and they don't grow on trees. Try and recruit talent
and not pay them. You won't be able to.... and it will make a difference to the bottom line, because I have seen it. This plan
will push down the upper middle class down the way that the GOP already decimated the other middle class. To combat income inequality,
close the "Mitt Romney" loopholes.
The wealthy CEO's don't even work an extra hour for that extra $1,000. They just negotiate for obscene amounts of compensation
that they cannot in any way spend. There was a study awhile ago - I think I read about it in the NYT - that suggested that a higher
marginal tax rate might reduce the incentive for CEO's to negotiate for higher and higher compensation, because that would bump
them up to a higher marginal tax rate. If that is correct, then corporations would have more to pay ordinary workers, and income
inequality would be reduced.
@Gwe, frankly, I think the executive management of American companies back in the 1950s and 1960s were more competent because
they were better at balancing the needs across a number of constituencies. Even after adjusting for inflation, they made much,
much less. Now THAT'S value! What has changed is an attitude of me-ism that an older generation that had to survive WWII and the
Great Depression did NOT have. Unfortunately, that sort of zeitgeist died with them and the country is poorer as a society for
it.
David Andrew Henry Chicxulub Puerto Yucatan Mexico Jan. 5
Paul, in your previous column you noted that corporations were sitting on a mountain of savings. The money is mostly in foreign
banks, because the corporations don't want to bring it home, because they can't find good investments. I recently visited with
a retired Canadian banker who said his best years were when he was working with young entrepreneurs...contractors, builders, small
business owners. He watched them grow and helped through some of the rough parts. Is there something wrong with today's bankers?
(Everyone please revisit The Big Short) Back to today's tax story. About forty years a go I needed three American engineers with
experience we couldn't find in Canada. They didn't want to come..."taxes are too high." I explained that their private health
insurance was a tax. When we factored in the cost of US health insurance they would have more after tax income in Canada. They
came to Canada. Please continue to write about taxes. Thank you. Ancient Canadian economist In a Mayan fishing village
My dad owned a small business on the Gold Coast of L.I. during the 60's which catered to old money WASPS whose wealth was taxed
at upwards of 90%. However, they all "summered" on L.I. or Cape Cod, had homes in Manhattan, Paris, London and yachts in the Caribbean.
And, as a middle class young adult, I was able to attend community college for $50 per semester. That's when we had real upward
mobility, a dynamic economy and a strong middle class.
Who is this "The Rich"? Let's face it, it's sort of a Boogeyman. The REAL tax amounts come from BUSINESSES. BIG BUSINESSES.
And that's who should be taxed and taxed well. There shouldn't even be an individual income tax. Everyone's income comes from
a BUSINESS one way or another and should be taken out and adjusted for on the Business end. And as we know Business just got a
HUGE break under Trump and the Republicans.
As Mr. Krugman is often fond of saying: "Your spending is my income, and my spending is your income." Or, to quote Barack Obama
in 2008: "When you spread the wealth around a bit, it's good for everyone." For his quote above, Obama was eviscerated by the
Right for "advocating socialism". Of course for those who believed Saint Ronnie when he said, "It's all YOUR money" - ALL taxation
is "socialism". That would be the GOP's mantra if it wasn't for the military-industrial complex (socialism for defense contractors).
But I digress. The message behind both the Krugman and Obama quotes above is simply that we are currently on a political and economic
path to neo-feudalism (where the Lords own 90% of the wealth and we Serfs squabble over the remaining crumbs). By contrast, "everyone"
benefits from a European-style "social democracy" - where government actually "provides for the General Welfare" so the average
citizen doesn't have to worry much about food, clothing, shelter, education and health care. These basics are the foundation of
Maslow's "hierarchy of needs". Once these basic needs are met, citizens are free to concentrate their energies on "productive
pursuits" (whether that's earning more money or writing a symphony). And everyone (even the wealthy) suffers from far less stress
than in our current jungle system where most Americans literally struggle from paycheck-to-paycheck - just one illness or job
loss from total destitution. Yet we continue to vote for serfdom.
@Jason Let the wealthy flee and see if living outside of the USA on a daily basis holds much of a candle to living every day
in the USA (e.g., Seattle, LA, or NYC) to name a few. Good luck.
I own a small forestry company. Despite a competent tax preparer I pay well over 20% in federal income taxes. A large forestry
company (Weyerhauser) with billions in revenue pays 0% federal tax. AOC knows exactly what she is talking about.
@Thomas Zaslavsky There no way to create wealth other than inventions and discoveries that 20-21st century science has shown
us. All the other money making schemes are either rent seeking or exploitational. So the way we compensate scientists and scientist
makers (teachers, aides etc) is so flawed that our sustainable scientific growth is in jeopardy (check the time it takes a PhD
in biology to get a permanent job!). I don't see CEO any better than the scientists I've met in my life. The only difference is
that CEOs are uber competitive whereas great scientists are excellent collaborators. There will be no capitalism, only feudalism
without scientific discovery and inventions ... stop lionizing the CEOs.
It's time to end the salary limit for Social Security taxes. Also, people like Warren Buffet, who don't get a salary but make
their income from dividends, should pay into Social Security by a 'Payroll Tax' on dividends.
@Jason People and capital are not more mobile than they have ever been. The median income in the US has been stagnant for decades,
and the buying power of that income declines every year. This is happening as the ultra-rich see tax breaks and hundred-percent
increases in their income.
@Allan Reagan I've seen 100s of scientists who forego consumption, risk their life on finding truth (less than 1 in 10 PhDs
land permanent jobs in Academia presently) that in turn help move the 20-21st century machine into creating wealth for all. I
don't see them asking for 10 million plus to get rewarded. Einstein refused a pay hike at Princeton to $8K (present value $40)
but without him there'll be no internet, mobile phones etc for supposedly "self-made" men (yes men) like you to make money from!
We're all incredibly hard working like you (mothers, teachers, drivers, painters etc). You're incredibly lucky to make 10 million
plus! Modesty would be a nice gesture ...
I wonder what our country would be like if we had the same distribution of income by deciles as we had in, say, 1980 before
the Regan tax cuts and subsequent cuts. How much more money would people in the bottom three quartiles have in their pockets?
With more money to enjoy life, could productivity have continued to increase rather than decrease. I suspect with all of that
money in their pockets they would have consumed more, GDP growth would have been higher, there would have been less impetus to
drive work to cheaper labor markets in Asia because people could afford things from higher labor markets like the good old USA.
We would have more money to invest in infrastructure. We would have enough money for universal health care. So in turns out, I
believe, the Republican tax policy is just one big scam to create a landed gentry in this country, something I doubt the founding
fathers would be ok with having just gotten out of a country where the landed gentry were everything. And my having a universal
health care growing at GDP rather than 2x GDP, would would have a low cost and better health care system.
Please don't repeat what you wrote here. It is tragically WRONG though it is widely repeated! No one pays 70% on ALL their
income. Each tax rate applies ONLY to monies in that bracket. If a theoretical 70% applied to income above $10,000,000, and someone
made $11,000,000, then they would pay the rate of 70% on $1,000,000. Furthermore, if there is an exemption for the first $12,000
of income, and a rate of 5% from $12,001-$20,000, then you, me and our millionaire example would all pay no tax on the first $12k,
$399.95 on the next bracket and so on. The end result is what's known as the effective tax rate and that's the progressive part
of it.
@Red Sox, '04, '07, '13, '18, I think if you scratch them deep, many very wealthy people in the U.S. would like to see better
infrastructure, universal healthcare, more people in homes than on the street, etc., plus a progressive program to deal with climate
change. And if a logical, sensible tax proposal could be put forth, they would vote and help pay for it, slowing our nation's
slide toward becoming a third world country.
Progressive taxation is a fraud and unfair. Everyone should pay a flat rate; around 20%. There is no reason not to tax all
taxpayers with the same rate.
Jesse "Big Daddy" Unruh -- when he was California State Assembly Speaker ran against incumbent Gov. Ronald Reagan in 1970 promising
a confiscatory tax of 100% on income above $1 million a year. Unruh, known for his quip "Money is the Mother's Milk of Politics"
ran as a progressive populist against Reagan, who was re-elected with a decisive margin of 52.8% to 45.1%. Post-election Analysts
were surprised that working class Democrats rejected Unruh because they said they strongly opposed his 100% tax on all income
above $1 million annually. After Unruh lost there was an apocryphal interview with a taxi driver who said "if I make more than
a million a year I don't want the state taking it away." When the reporter asked the cab driver if he really thought he'd ever
make that much, the cab driver said "who knows, I might get lucky." Stamped on the politically modified DNA of too many working
Americans is the fable that everyone is just a sliver of luck away from tycoon wealth. It's a fantasy of American Exceptionalism
that explains the celebrity and allure of privatized wealth trumping common good and common sense. To paraphrase Marx: Money lust
is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of
the people". To misquote the late Carter Ag Secretary Bob Bergland, "the rich know the cost of everything but the value of nothing."
Amen to that.
@Ron Cohen, exactly right. A reduction in incentive for the ultra-wealthy to make an extra million or two also can help reduce
the cutthroat nature of this economy & society. What would the rich guy have to do to add that extra couple of million? Lie about
the asbestos in his company's talcum powder? Ignore product safety standards to save on manufacturing cost? Fire a wad of people
and drive the remaining skeleton crew over the edge into stress-induced disease? Find a way to get that toxic waste off your hands,
say as an ineffective, downright toxic fire retardant for furniture and baby clothes? Anything society can do to lower the probability
of outcomes like those is a significant benefit for all.
"So why not tax them at 100 percent? The answer is that this would eliminate any incentive to do whatever it is they do to
earn that much money, which would hurt the economy." And yet, as both you and Thomas Piketty have pointed out, most of the wealth
being generated now is through investment, in other words making money from money. So nothing useful is being produced and these
people are not "job creators." Go ahead. Tax them at 100 percent.
@Matthew Carnicelli America isn't happier but rich Republican donors are. Republicans work for their rich donors, not for America
so the party is just doing its job.
@Mjxs Rather than restore the draft, have a national conversation on our outsized military, and its (our?) goals. Perhaps reducing
its budget significantly, instigating universal community domestic service for all our youth, and giving some of the savings to
repair our tattered safety net would get us to where we would like to be.
@Geoffrey Please read the comment from "Barking Doggeral," I think it answers your question. Basically, "super compensated"
does not equal super productive by a long shot.
I'll tell you how Ocasio-Cortez will perform as a member of Congress: She won't. She is too intelligent and her policies are
too sane and sensible to mesh with the crooks and corporate shills who control our modern political system. The people want wild,
outlandish, showbiz personalities, not a return to the stable social democracy that made us the greatest country in the world
during the 1950s. AOC may know how to use Twitter, but unlike Trump she doesn't know how to use fear and deceit to influence an
entrenched profit-driven plutocracy, and unlike Trump her ideas won't allow global megacorporations to consolidate their money
and control over us so any hope of financial support is out of the question. And her ideas concerning policy would promote America's
strength and stability, something that our foreign enemies will fight tooth and nail to prevent. With no corporate cash and an
army of foreign agents and their Republican employees undermining her, AOC's agenda will go nowhere. Furthermore, she will accomplish
nothing in Congress because there is no Congress. Trump has eliminated it. The shutdown is not a means to the end of building
the wall. The Wall fight is just a means to an end: Trump and his followers want the government to remain shut down. They want
to undermine our government and punish Federal employees by putting them out of work. Their motivations are resentment, spite,
and the driving need to hurt Americans. Trump's goal is two branches of government.
Imagine yourself a cardiologist making 900K a year. Now imagine taxing his income at 90% inclding state taxes. How likely is
he to get out of bed at 3 AM to do y our emergency angioplasty, since his income depends on aperformance based compensation model
and his sleepless night, before working the next day as well, isnt going to earn him beans a fter taxes?
Yes, but 80% -- holy cow! That just sounds outrageous. It's very bad optics if nothing else. How can the IRS agent, with a
straight face anyway, demand, "Okay, buddy, for the privilege of living here, you owe us eight out of every ten dollars you earn."
Really? Isn't that absurd overreach? No? It's fine with me personally: I'm poor, living on a modest Social Security check. It's
also fine with me if you outlaw booze and cigarettes, too, because I'm not a patron. I've no skin in these games. And I do love
the idea of financing our deeply in debt, democratic government and helping the poor, I'm one of them, but, yeow, 80%? That's
going to be a hard-sell just on the face of it, although I concede to the wisdom of my superiors -- the Ph.d. economists, especially
the Nobel-Prize winners. Just as I did when called upon to fight the noble Vietnam War. They know more than me, right? So, AO-C,
carry on, girl. You have the money gurus behind you, while this layman remains bemused, stymied, and not a little red-faced by
the paradox, appropriateness, and effectiveness of an 80% tax rate. Holy cow! Good morning, Vietnam.
"The controversy of the moment involves AOC's advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously
crazy, right? I mean, who thinks that makes sense? Naturally, Krugman and the cocktail waitress/tax policy savant known as "AOC"
don't even bother to define what constitutes "very high incomes", which demonstrates just how poorly thought out their magical
thinking really is. Try again, Paul.
". . . a tax rate of 70-80 percent on very high incomes . . . is a policy nobody has ever implemented, aside from the United
States, for 35 years after World War II -- including the most successful period of economic growth in our history." I've been
waiting for decades now for someone to notice this. For several years during world war II, the top tax rate was 95%. It dropped
a bit at the end of the war, but by 1950 it was back above 90%, and there it remained until 1963. When vast amounts of public
money flow into private pockets in the form of defense spending, which has been the case since the 1940s, high marginal tax rates
are what keep public money public. Anything less amounts to a huge transfer of wealth from the poor to the rich. Which is exactly
what's been happening since the Reagan-Thatcher years. Call it "socialism for the rich". It's time to get back to the common sense
policies of working for the common good, and that means progressive taxation.
Paul.....Taxing the wealthy is the ONLY way to provide income equality to all Americans. The rich never, ever, make their money
without the Democratic Capitalistic system for them to operate within. The US infrastructure, the laws, the labor of the many,
and other common benefits to all businesses provide Americans the opportunity to build personal wealth. If the wealth Gap gets
too big, the many "have nots" will revolt. It's in the interest of the 1% to make sure the 99% is taken care of. It's a matter
of survival.
Currently the 1% own 50% of global wealth, they will own 66% by 2030. Left unchecked, they will eventually own virtually all
wealth, which reduces you and I to serfs, and is intrinsically unstable. The reason for this is simple: the return on capital
is about 6-10% while GDP growth is 2-4% which means that wealth will accumulate with those who own capital: aka: the rich get
richer. That is a systemic outcome. The solution is simple: tax at the top, invest at the bottom.
@Jason You clearly didn't read the editorial: Why is it that the Conservatives never articulate a policy proposal based on
factual analysis ? Because, much like Jason's suggestion that he would move his business out of the country & Jason's criticism
that the left's answer is soak the rich, has no basis in reality. Jason may or may not move his business but this of little consequence
as his 'income' would be distinct from business profit. & the notion that the rich are soaked is difficult to reconcile with our
current economic situation. The Far-Right seems to misunderstand how tax structure works & how tax income is used. Jason's suggestion
that the private sector applies superior critical thinking skills is belied by his comments & this is driven home by the mere
fact of his comment being an 'Times Pick'
@SJP The only country that has tried a marginal income tax rate above 55% recently (France, 70%) abandoned it as unproductive,
i.e. it wasn't collecting much because people successfully avoided paying it. That speaks more to me than what may be optimal
in theory. With state and local taxes added in, marginal tax in US blue states is already about 50%. An 80% tax rate is a political
fantasy, even in Sweden (total top marginal rate 56%)
It sounds like a strategy to discriminate against a minority group based solely upon the one characteristic that defines their
minority status - their income. No law-abiding group should be targeted for disproportionate, punitive taxation based upon their
income. The ultra wealthy, who broke no laws while attaining their wealth, should not be financially exploited after the fact
simply because the majority would like to siphon off their wealth rather than innovate and work for their own. Who are you, or
anyone else to say how much of a person's hard earned income is "enough for them" or to decide how "bothered" they will be if
you forcibly take the portion of their money you've deemed to be excessive. What have you done that entitles you to deserve any
portion of another person's earnings? I could find a large group of impoverished, homeless people who would feel that the middle-class
income you earn is too much for you and that you should be forced to distribute any amount over a subsistence income to them since
they are less fortunate than you. I doubt you'd be as quick to advocate for their claim to your money as you are for your own
claim to the money of the wealthy.
@Annie. "What if we stopped believing that government could fix all of our problems?" The US Constitution is written so that
the Federal Government provides for the common good. If we stop believing that, we might as well move to Russia.
Of course Repubs say tax cuts for the rich will benefit the whole economy---that's you and me. What else can they say---the
truth? That they want to confiscate our national productivity---meaning what you and me produce at work? Because it's their due,
as superior beings who call the shots? Then decide how little to pay you and me in return? Or that it's perfectly ok to send our
jobs away to low wage countries, and leave us to scramble? Can they say that they should dominate our govt like the aristocrats
of olden days? Those ones we overthrew way back when? No, would sound awful. So they and well paid consultants make up these economic
slogans---and millions believe them! And many go along with it to be in with the influential and powerful. The politicians taking
donor money spread the lie. The big con is to equate corporate wealth with Americanism and Freedom. They manipulate us with the
implied threat and contrast of a true Communist dictatorship where the govt owns everything. But as Krugman's favorite 2016 candidate
Bernie Sanders said---Yes, of course we want capitalism, but regulated capitalism! If elected govt doesn't regulate corporations
then the corporations will regulate the govt. That's what we have now, disguised. Btw-- PK says, " if a rich man works..." How
about if a rich woman works? Or rich person, Or rich people. Times have changed. Hard habit to break. Man is not synonomous with
humanity.
@Allan Reagan I had an accountant in my early days of entrepreneurship who wisely explained to me that paying taxes was far
better than not paying them. He was right, as I earned more income, I paid more taxes and became more successful so I could earn
more income and pay more taxes. Paying the 70% rate on your earnings over $10m means you already earned $10m. In a year. Now stop
complaining already.
@Billy Walker Regardless of whether we are talking about marginal rates, the idea that taxation is "theft" is something that
the wealthy have been pounding into the heads of the population for decades now. If that were true, then those that don't want
to pay taxes should not be permitted to use OUR roadways, or seek protection from OUR police force, or expect their trash to be
picked up by OUR sanitation workers. If and when a natural disaster strikes and your home is destroyed, please don't look to US
for relief. If you are in trouble in a foreign country do not look to OUR embassy. When you want to sue your business partners
or you get into an accident and need to sue the negligent party or even when you are arrested and accused of a crime, please don't
look to OUR courts for redress. If you have not paid for these services, please don't steal them from those that have paid. Also,
if you have a business, please do not steal the use of OUR railways, roadways, bridges and tunnels, postal system, shipping ports,
waterways, rivers, lakes, airports, airways, traffic controllers, etc. Because the more you are making, the more you will be using
OUR infrastructure and services. Get your own and stop putting such heavy demands on what is OURS. Freeloading rich people will
not be tolerated despite the fact that they are and always have been amongst the most self entitled people to grace this country.
Pay your taxes or stop stealing.
Eisenhower said that high marginal income tax rates on wealthy people and corporations was not socialism but sound economic
policy. He said corporations would pay a greater portion of their profits from increased worker productivity to workers rather
than pay an increased amount in taxes to government. For decades workers received annual increases in wages and benefits when
marginal income tax rates were high. Then Reaganomics was introduced which lowered greatly those marginal income tax rates on
wealthy people and corporations while raising payroll taxes on workers and businesses. The result has been no growth or loss of
real income for 90% of the country, a small to moderate gain for the top 9%, and a huge gain in real income for the top 1% of
income earners. Businesses gave bonuses to management for increasing before tax profits. They did this by reducing the growth
rate of wages and benefits and moving production to Mexico and China where wages and benefits and regulations are much less than
in the US. It has been goodbye good industrial jobs and hello to bad service jobs for the past 35 years. It's time to go back
to that which helps most people and not the top 1%. Goodbye to trickle down economics which has never worked to help the bottom
99%.
@Ellen All correct, our infrastructure has already become third world. Next time you're stuck in traffic under a bridge, look
up at the rusted steel and spalled concrete. I do this often because I've been involved with road construction all my life and
I'm aware of the collapse of our infrastructure. However, few people ever look up at a bridge when below it, and don't recognize
what they see. The politicians don't look either, but the engineers do.
What's good for the USA is good for General Bullmoose!! https://youtu.be/Kj65AcbekIE
I've been saying this for years. The wealth of the wealthy is founded upon and maintained by the prosperity of America's working
people. Those among the ±1%, and most especially the 0.1%, who are not sociopaths ("It is not enough to succeed. Others must fail."
~ Gore Vidal et al.) must realize that the best investment that the well-to-do have ever made in all of human history was in America's
infrastructure and its middle class during the 3+ decades following WW II. Even though at the time the taxes on the wealthy were
overly confiscatory, not only did it result in remarkable economic prosperity for all, including the wealthy, it also meant that
the wealthy could sleep safely in their beds and not have to cower behind walls and private armies for fear that their heads might
end up on a pike. Sadly, those days seem to be passing. A person with no hope can be deadly, so, as the people lose more and more,
the rich must, perforce, fear more and more. Some of them know that, and know better, but... "We must make our choice. We may
have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." ~ Justice Louis D. Brandeis
When John D. Rockefeller was asked once, "How much money is enough money?" He replied, "Just a little bit more."
It's not just higher tax brackets for the wealthy. It's also tax breaks on dividends as opposed to dividends as well as all
of the other tax breaks that rich people receive. It's also unaudited and untracked overspending on the military, subsidies for
fossil fuel companies, and all of that stuff. The result is that young people pay for their education for the rest of their lives;
roads, bridges, railroads, airports, water systems, etc., are in a state of advanced decay and our society as a whole is suffering
from structural deterioration. So good for Krugman and Ocasio-Cortez. It's about time.
Taxing the rich at 75% is a fools errand. President Holland tried only to see rich leave France. In a global economy, the rich
move, when taxed too much, (in their opinion) to where taxes are lower. It is just as lovely to live in London - with the source
of your income conveniently located in the Channel Island) then in NYC
@WPLMMT I am a liberal and a progressive and what I want is for the ultra rich to stop grabbing everything for themselves aided
by unfair tax laws and bought politicians. Write back in 2.5 years, WPLMMT, and see if your prediction about her longevity comes
true. I wouldn't take the bet, if I were you.
@Robert Orban Reagan did not do it. Volcker did it, with the approval of Carter, before Reagan became president, and continued
the same policy under Reagan.
@Ron Cohen A bigger contribution to the "why" is the changes in accounting rules on options and stock compensation. This plus
the SEC rule changes regarding advanced advice (forecasting company performance) have allowed executives to play the expectations
game and manage their payout.
Krugman,as usual,you are wrong.When you pay 70% or more in taxes;what is your incentive to work.The people taxed at the 70%
rate will leave,just like France.Then France reduced the tax rate.Cortez is an individual with scant knowledge of economics/taxation.I
find it amazing she grew up in affluent Yorktown Heights in Westchester County yet wants us to believe she's a poor hispanic from
the Bronx.
@Billy Walker Under Dwight D Eisenhower, taxes on the wealthy were much higher percentage. Ocasio regurgitated a Republican's
tax plan and called it her own. During Ike's tenure, those monies were used to build the greatest infrastructure America ever
built, and the last time America made any meaningful investment in our infrastructure - because Reganonomics paved the way to
decrease taxes on the wealthy and there went America's infrastructure monies. Why are you so determined to make sure the rich
get richer?
@Geoffrey "Why not punish the unproductive with high taxes as an incentive for them to become more productive".... It's rich
to imply someone making $20 an hour is unproductive as opposed to one born to the investor or heir class who may have never lifted
a finger or even earned their original wealth in the first place.
@Plennie Wingo When considering tax rates, the so called payroll tax should be folded in. Most observers of our tax rates seem
to forget that part of the deal. Since the government uses the payroll taxes collected no differently than it uses any other funds
collected, I think it would be smart to get rid of it altogether. Right now, the payroll tax, which is supposedly funding Social
Security and Medicare has a surplus every year and is added ludicrously to the national "debt." Let's get rid of all of these
fictions and start over so that the actual taxes everyone pays will be more equitable.
@Billy Walker So who cares about the data, history, experts- you know what you know. Our current tax laws have been written
by the rich & corporations. Do you think that is why they favor the rich & corporations with little regard to what is best for
our country? I do.
I think this quote by Mr. Krugman is a dangerous mentality to have for us citizens. "Or to put it a bit more succinctly, when
taxing the rich, all we should care about is how much revenue we raise." Boy could this logic justify some madness down the road.
Capital, and capitalists, can flee. It's why the Beatles left the U.K. in their prime. Remember "Tax Man"? Paul, you more than
anyone have spoken about the fact that capital knows no borders; it just seeks the highest return.
Isn't a major elephant in the room the amount of our taxes that goes to (Eisenhower's famous phrase) the Military Industrial
Complex? As Martin Luther King said :" A nation that continues year after year to spend more money on military defense than on
programs of social uplift is approaching spiritual doom."
@Allan Reagan: If you are making under $100,000, you won't be hurt by the higher tax rates Democrats, including AOC, are talking
about. AOC floated higher rates on income over $10,000,000. I think you are safe.
The future has arrived and we'll do anything to stop it dead in its tracks. AOC is a symptom of the future, not the full-blown
terminal illness lying in wait for the oligarchy. Beto O'Rourke may also be a symptom of this new dreaded epidemic. The GOP has
been doing this smoke-and-mirrors act with the economy for decades: the "job creators" who can't be taxed, the efficient markets
which result in a major financial catastrophe every ten years, the "competition" which only results in the consolidation of economic
control and power in the hands of a few big corporations (monopolists) and big banks. And the whole thing runs on free money -
zero interest rate policy - or effectively zero when inflation is factored in. We have a cult. A cult of "conservatism" which
is profligate, wasteful, irresponsible, fatuous, anti-scientific, anti-fact, and anti-intellectual. Cults work better without
facts. They're hostile to fact. And cults are dangerous like ignorance, and greed, and chicanery. Conservative = Insurgent. Up
= Down. Donkey = Aristotle. And doesn't it sell like hotcakes along with those $40 red hats...
Great idea, let's raise more tax money so that we can do truly productive activities such as flying dead ex-presidents and
senators across the country (several times) in 747's. Maybe they needed the security or were in a hurry to be buried. Then, of
course, look at the great value-for-dollar we get from military spending.
I don't need some 29 year-old who has never started a business, made payroll, created something that didn't exist before, took
the chance, made the investment, and suffered the many setbacks before the idea was a success to tell me how I should or shouldn't
spend my money. Taxing it is the same as saying how I should spend it. I also do not need an academic who has never started a
business, made payroll, created something that didn't exist before, took the chance, made the investment, and suffered the many
setbacks before the idea was a success to tell me how I should or shouldn't spend my money. Taxing it is the same as saying how
I should spend it. Both of these folks are sad examples of the "let me tell you what is best for you" paternalistic, liberal ideology
that we should all be very afraid of.
Professor Krugman, AOC is no flake and the Republicans know that. Trumpian Republicans are running scared of the new freshman
class of 116th Congress as it is the most diverse and educated ever. They are looking for ways to discredit these young, energetic,
and educated Representatives of the People who came/got elected to take back the Government from the Corporations. They promised
to make it work for all the people. Just to add one more item in your list of why we should tax the top 1% with a 70%-75% tax
rate is the fact that the utility of extra money to people with middle and low income is certainly very high as compared to higher
income folks/corporations. The marginal propensity to save is almost zero for extra money received as a result of tax cuts/reductions
in the lower income individuals, essentially they are going to spend all of it in the local economy to obtain the necessities
of life. This extra money spent in the economy would have a major multiplier effect in the economy. We do live in a consumer based
economy. The revenue generated by taxing the extremely wealthy individuals/corporations would go a long way to fund a lot of Progressive
ideas/values for our citizen. The freshman class of 116th Congress gives me a lot of hope for the future of our country.
@paulkrugman You have stated things I learned 65 years ago in my first economics class when good teachers were proud to say
the names like Samuel Gompers and the like. Thank you. You were right about the timing and prosperity that the US had in the period
after WW II. The US growth rate was doubling every 11years, as shown in graphs on The Guardian on 5 January. Only after Reagan
did the US begin a real spiral down in growth, but still ahead of all others except China. Real productivity increases are hindered
by some almost immovable obstacles; Greed by the rich, over weight among all groups and failures in educating/inspiring the masses.
The three are global phenomenons but only addressing the first can lead to having the wherewithal's to address the other 2. I
look forward to reading and following @AOC in her work in the future, she has great guts. I'm with her.
Mr. Krugman's citation of a utility analysis lacks a grounding in property rights, which arguably define and distinguish the
US from all other political economies. That said, if we want to use utility as the standard of value, then let's use rule-based
utility vs. act-based utility. On that standard, how have the socialist / communist / so-called "progressive" / fascist / generally
collectivist countries performed over the last 100 years in relation to the US? Who has flourished? Who has perished? If you are
in doubt, take a drive through a typical Pyongyang or Naypyidaw suburb and compare it to a typical US suburb. Also consider Moscow
and Havana; they love collectivist thought almost as much as the US academy. Earth to Mr. Krugman: human beings are more than
widgets in your economic toolbox. [No, not a Republican.]
If 'everyday' people had guaranteed healthcare, education for their kids and food on the table, they would not be so overwhelmed
with making and saving money. Whatever tax rate that requires on whomever could pay would be worth it
According to the late Nobel Laureate & Econ Historian Douglas C. North's "Structure & Change in Economic History" @ the time
of the collapse of the Roman Empire wealth was so concentrated that 6 senators owned half of North Africa, specie so concentrated
that trade was reduced to barter & the commercial economy collapsed. Serfdom was created to tie workers to the land. The Roman
legion still held a tactical advantage over their adversaries, but it had thinned, as a result the empire needed a bigger army
however the wealthy & powerful used their influence to avoid paying taxes; as a result the empire lacked the funds & the political
will to defend its borders @ a time when it controlled all the resources of Western Civilization @ a time when that included Turkey,
Syria, Egypt & North Africa as well as the best part of Europe against barbarians. Similar events lead to the collapse of Ancient
Egypt's New Kingdom, Byzantium, Mideavel Japan, Hapsburg Spain, Bourbon France, Romanov Russia, Coolege-Hoover America (triggering
the Great Depression, Hitler, WWII, the Holoust), oh, & BushJr America. Concentrated wealth destroys great empires, civilizations
& nations. Marx got in trouble for pointing out that industrial capitalism grows slower than the rate of wealth concentration.
The right likes to shoot the messenger. He was doing them a favor. High taxes & redistribution of bargaining power is needed to
stave off instability & collapse & hardship so vast you can't conceive it.
Really fascinating article and very informative. More please. What's the lowest rate in the US? When I started work in 1981
in the U.K. I paid 30%. Now down to 20%. Plus about 3% for national insurance which is income tax really but is meant to be hypothecated
to the NHS. I'm happy to pay some more to ensure the continued cohesion of our society. I don't know why some people find that
such a problem.
This ignores the fact that most people with a lot of money don't make their income in the form of a paycheck. What we really
need to do is return the tax rate on investment income, not earned income. That would also help end these wild swings and speculation
we see on Wall Street.
Appreciate the reporting, but NYT why not report on what Nancy Pelosi is saying or doing vs. a freshman in Congress? The Speaker
of the House has years and years of experience; is one of the few members of the government who has been recorded effectively
talking "back" to Trump; and as her daughter says, is someone who clearly knows what she is doing, so people (in America) can
sleep at night.
It's been clear since Ronald Reagan that tax cuts don't trickle down while workers wages stagnate. It's time to reverse course,
especially when Trump has nearly bankrupted the Treasury and Republicans have been shown to be hypocrites on deficit reduction.
It's time to address income inequality and provide funds for Medicare-for-All; an infrastructure program that will bring the nation
into the 21st century with high-speed rail and a modern energy grid that includes solar and wind; and prods states to return to
tuition-free higher education at state colleges and universities. A.O.C. is "right on the money" with a top bracket of 70 percent.
It's time to end the Trump kleptocracy and fully restore the graduated income tax.
Fascinating...an oversimplified correlation of two variables (tax rates and growth) to justify redistribution of wealth. "Hey,
Mr/Ms X, I know you earned your income based on the value of what you do in a competitive marketplace, but you don't really need
all of what you earned...so we the government, arbiters of wise decisions about how to spend money, are going to take most of
what you earned and give it to someone else." Poppycock.... Rep Ocasio-Cortez seems both nice and sincere; I'd venture to say
she's a very good person based upon her concern and empathy, and I don't understand the flawed tactics of the right in picking
on her extra-legislative habits (dancing, clothing choices, etc.) Her empathy and personality don't balance her terrible politics
regarding redistribution of wealth. As for economists -- Nobel Prizes notwithstanding -- the good ones are driving gorwth today
and not publishing opinion pieces based on poor economic theory
The point AOC (and, surprisingly, you) miss is that the kinds of wealthy people she wants to target with a 70 percent marginal
tax rate don't make their income from wages. They make it from capital gains instead. So, if she wants to create a more sustainable
revenue flow to the government, she needs to work on getting those rates up to reasonable levels. But capital gains have different
forms. The part that she needs to focus is on speculative capital gains, not investment gains. Short term gains resulting from
just flipping securities is gambling writ large, and there's no reason why the taxpayers should have to subsidize that risk-taking
with low tax rates for the flippers. Treating these gains as ordinary income is goodness, but only if that rate matches the higher
rate AOC wants. In fact, those should be higher than the top marginal rate, and expenses related to them should not be deductible.
(This should include carried interest, too.) Long term capital gains tend to create jobs, infrastructure, and retirement savings,
so those need to be encouraged with deductions of related expenses, and lower tax rates, too. In any event, I encourage AOC in
her thinking. We need to readjust our tax system to make it more fair to the taxpayers, and to stop the robber barons on Wall
Street from ripping us off.
@Prof Forgive me for not feeling sorry for the wealthy. They have benefited greatly under the system of government we call
the U.S., a system we all pay for. There are plenty of other taxes people pay besides federal taxes (excise, state, city, local,
property, etc.). They don't have armies of lobbyists, attorneys and loopholes to protect their capital. As for moving all of their
money offshore, good riddance.
@hammond Paul Krugman has written about the "Europe was Rubble" myth - the idea that the unprecedented creation of a large
and prosperous U.S. middle class, was only possible because of those special conditions.
https://krugman.blogs.nytimes.com/2012/11/19/the-europe-in-rubble-excuse
/ Here it is about tax policy, but it is also brought up as an excuse not to try policy responses to high unemployment, low wages,
etc. In addition to PK's arguments: First, the whole idea that we had faster growth due to having had trade *surpluses*, doesn't
make sense. Those surpluses actually required *more* output - not less. So, in theory, if Europe had *not* been rubble (dubious,
as PK points out), US growth should have been *higher*. OK, that is all based on theoretical supply side constraints. But what
about Demand? OK, now you have something. The trade surpluses increased demand (AD = C+I+G+(X-M). It is long past time to start
talking about aggregate demand, and how that has been creating a dysfunctional economy. Also, how destruction of the New Deal,
has allowed wages to stagnate, which has given us lots of low productivity jobs at low pay, reducing productivity growth through
compositional effects - but more importantly, making US poorer, less efficient, and with less job satisfaction. Workers can tell
when their job is really not valued. Finally, if indeed making low skilled US workers compete with foreign starvation wages is
a problem, we need to acknowledge and fix that.
One of the biggest myths out there is the one in which an individual says "I did it all on my own". The truth is, no you did
not. You had an education, passed down from other generations that made discoveries, you had paved roads, police and fireman,
an educated workforce, safe food to eat, clean water to drink. All things paid for by everyone. We should have high taxes that
are progressive. People use the misnomer, "The Government" to try and discredit as others the people charging the taxes. But come
on people, stop being stupid. Our constitution says "Government by the people for the people". We are our government. Anyone of
you, or I, can run for office. Enough of this fake individualism conservative fairy tale. We need to work together in order to
build a more just and perfect society.
You can put all the charts and graphs you want in front of people, provide all the historical evidence available, and provide
evidence of how things have never and are not now working the way Republicans say it has or will, and they still will refuse to
believe their lying eyes. The Republican experiment to fleece the middle and lower classes is ongoing and successful, in part
supported by the middle and lower classes' willful blind ignorance and devotion to self flagellation.
Please don't forget we are talking about the highest MARGINAL tax rate, e. g., the tax due on the income over $600,000 for
a couple filing jointly was 37% in 2018 and the same couple paid 35% on $400,001 to $600,00, and 32% on $315,000 to $400,000,
and 24% on $165,001 to ¥315,000, and 22% on $77,401 $165,000, and 12% on $19,051 to $77,400, and 10% on income up to $19,050.
What we need are more margins on the high end; to equate a $600,000 earner with a $10,000,000 earner is absurd. Nearly half the
top %1 of earners make $10,000,000 or more! Why should they be taxed at the same rate as someone making 6% as much??? A family
making $36,000 (6% of $600,000) pays a highest marginal rate of 12%, while the family making $600,001 pays a highest marginal
rate of 37% and a family making $10,000,000 pays at the same highest marginal rate of 37%! The incentive for the top .1% in this
set up is not to put money back into their businesses or employ more people, but rather, it's to buy off politicians dedicated
to keeping their tax rate on the bulk of their income ridiculously low! When the Koch brothers thanked Paul Ryan for passing Trump's
tax cuts it cost them $500,000 (in donations to Ryan), but gained them $1,000,000,000 to $1,400,000,000 in reduced taxes. See
how it works? Forget about the 1%! Go after the .1%!!!
As an affluent retired person, I left New Jersey for Texas, where I'm originally from. With 'an optimal tax rate of 73%', I'll
be leaving the USA. I can still spend 182 days a year here. Let them tax those affluent people who must remain behind. As Margaret
Thatcher said: 'The problem with socialism is you eventually run out of other people's money'. Or am I missing something here?
Love the fact that the article is punctuated by a slick advertisement pushing sales of $13 million co-ops. Does Krugman think
that high-earning W-2 taxpayers will continue living in New York City, or even the US, when rates are 70-80%? France tried this
just a few years ago; it was an instant failure resulting in a quick exodus of the country's largest taxpayers. Krugman is living
in the fifties. We are now a globalized economy where capital and human resources are far more mobile.
I will quibble with one small and tangential claim in this article. Krugman writes that additional taxes on the very rich will
not affect their life satisfaction, since they can still buy what they want. This is not always the case. Many of the very wealthy
want to buy more things than they can afford. And some, not just the Koch family, want to buy the government. They pour billions
into the attempt. And as it happens, that's another reason for increasing the marginal tax rate on the very rich.
Why not tax labor lower than capital gains? Labor will have more incentive to work because they can keep more of what they
earn. People who live off capital will just keep doing what they are doing. I doubt they'll rush out to get W-2 jobs. We're tried
the reverse for long enough, let's flip it around and give the majority their turn.
As a recent retiree, I was surprised to learn that my husband and I wouldn't be paying any taxes on our substantial capital
gains, dividends, and interest, as long as we kept below the ~ 77,000 income level. We're living on current cash and taxable accounts,
and are fortunate not to need to sign up for SS until 70 1/2 nor pull from our retirement accounts (except to fill up the bracket).
This is basically ridiculous. We're affluent, not Uber-wealthy, but certainly can afford to pay more than the piddling amount
that we've paid the last couple of years.
A country where taxes are basically fair and social programs give people, all of them, basic security, is a calm and efficiently
working society that does not have regular massacres in schools and churches, and does not have a restless and frustrated public.
and so on. there is a country like this next door. The contrast with the disfunctional US today is striking.
Equality. That is a necessary component of civilized society and democracy. You have to have a certain level of equality. Freedom
to become a billionaire is not good for America or any country. Community, compassion, belonging, love, equality. Not selfish
riches.
@Jay For the full context, the 1999 Gramm–Leach–Bliley Act was authored by three Randian Republicans from Republican-majority
Senate and House. While Bill Clinton should not have signed it, Republicans authored it. In April 2003 - under the Bush Reign
of Error - the attorneys general of two states went to Washington with a stern warning for the nation's top bank regulator. In
the Office of the Comptroller of the Currency in Wash DC, the AGs from North Carolina and Iowa said lenders were pushing increasingly
risky mortgages. Their host, John Hawke, expressed skepticism. Roy Cooper of North Carolina and Tom Miller of Iowa headed a committee
of state officials concerned about new forms of "predatory" lending. They urged Hawke to give states more latitude to limit exorbitant
interest rates and fine-print fees. "People out there are struggling with oppressive loans," Cooper recalls saying. Hawke, a veteran
banking industry lawyer appointed to head the OCC by Bill Clinton in 1998, wouldn't budge. He said he would reinforce federal
policies that hindered states from reining in lenders. The AGs left the tense hour-long meeting realizing that Bush-Cheney's Washington
had become a foe in the fight against reckless real estate finance. The OCC "took 50 sheriffs off the job during the time the
mortgage lending industry was becoming the Wild West," Cooper says.
http://www.nbcnews.com/id/27121535/ns/business-us_business/t/states-warned-about-impending-mortgage-crisis /
@Red Sox, '04, '07, '13, '18, The rich never work for the poor. The relatively poor work for the rich, after which the rich
complain that they are being asked to pay taxes for services for the people they underpay.
@vulcanalex - Did it ever occur to you that if Charles and David Koch, together worth upwards of 90 BILLION, paid taxes proportionally
the same as you do now, your taxes might be lower? The middle class has been footing the bill for 50 yrs. and needs actual relief.
No one, no one, no one needs 90 Billion $$. That's pure greed and it's economically stupid as well.
One should tax every source of income at the same rates. Thus, incomve from dividends, capital gains, and inheritances should
all be taxed at the higher rates. The distinction between earned and passive income is false and makes no difference to the recipient.
The Tax Cuts and Jobs Act of 2017 took away: SALT deductions (limited $10,000 fout of $19,883)) Personal exemptions ($12,150)
Unreimbursed business expenses ($9,906). This increased my TAXABLE INCOME by + $32,209. Sure, marginal rate dropped from 24% to
22%, but my Federal tax INCREASE this year was $7,085 or 71%. MAGA!
Some scattered thoughts. Bear with me. I just got back from an Orthodox Jewish wedding (a lovely experience!). While there,
I fell into conversation with a good friend--a conservative. A moderate conservative--but conservative nonetheless. A dichotomy
struck me--which I kept to myself. My friend's view of "classical liberalism" was "limited government." Enable people to rise
as far as their talents and determination take them. And get out of the way. Such (he declared) was the philosophy of our sixteenth
President--the sainted Lincoln. The Civil War (he said) garnished him with a bright shining halo he might never have achieved
otherwise. Okay--maybe so. Maybe not. Who knows? So what's my own philosophy? Which I never got around to articulating. Protection,
Mr. Krugman. Protection. Protection of an oppressed minority from an oppressive majority. OR-- --of an oppressed majority from
an oppressive minority. Protection of the weak from the strong. Of the poor from the rich. Of the honorably striving working people
that never won a place in the heart--or the books--of that conservative icon, Ayn Rand. So, Mr. Krugman-- --I read your piece
with considerable sympathy. Tax the rich? Sounds good to me. Even out the horrendous inequality now plaguing and poisoning American
life. But part of this feeling, Mr. Krugman, is old-fashioned SPITE. Sorry! I'd love to hear the Koch brothers howl. Someday.
Soon.
AOC has her work cut out for her. She will need your help. In reality, she will need all the support she can get to persuade
the Democratic Caucus that a tax rate of 70-80 percent on very high incomes makes sense. Clearly, she and many noted highly respected
economists have found that the trend in inequality has not been beneficial to the performance of the larger U.S. economy. She
appears to have the energy and intelligence to develop a narrative that the Caucus could use but ultimately she and the proponents
of the 70-80% will not hurt their chances for re-election in 2020. Equally important in making our society more egalitarian are
the issue of tax shelters and the definition of income in the tax code, e.g. the treatment of income from capital gains vs. income
from salaries and wages. My very rich friends seem to load a large portion of the "winnings" in offshore shelters. A big difference
that needs to be addressed is the "cap" on payroll tax rates that are clearly unfair to the average wage-earning employee, and
the self-employed "gig" economy worker. I hope someone will take up this very unfair provision. I suggest that requiring ALL income
be treated equally with NO CAP for the FICA-HI payroll deduction would make the Social Security Trust Fund flush and possibly
the funds required for Medicare for All a reality. With this kind of payroll tax package, there is a possibility that the payroll
tax rate could be reduced or payments to recipients increased.
@Joe, it appears you're confusing the marginal tax rate (the rate at which your highest additional dollar of income is taxed)
with the overall rate at which your income is taxed. They're not the same. People won't be paying the highest rates except on
their highest additional dollars of income -- those last several million dollars, for example.
What needs to be pointed out in every article on tax rates is that the 70% or 35% or whatever rate is in force is not on ones
entire income, but only on the topmost part. It might only be on the top 10% of an individuals income, not on the entire amount.
That is where people who oppose these rates don't get it. And when the "alternative minimum tax" was passed, it was meant to make
sure everyone paid some tax because they weren't allowed to use all of they deductions. But somehow, some are more privileged
than others and get to pay nothing, like the Trumps and Kushner's. In the meantime, some of us retirees who saved like crazy for
retirement and had some decent investments have to pay through the nose every year when the law requires us to sell a certain
portion of our retirement funds and pay capital gains rates. We have paid alternative minimum tax for years with far less annual
income per year than Ivanka has per month.
The decline of the American middle class started with the election of Reagan and his voodoo economics. The investments we made
say in college education could no longer be sustained at the lower tax rate and the result? No one but the upper ten percent can
afford college.
The other intended consequence of low taxes for the rich has been the accumulation of money that can be used to buy political
power. I think that's the real purpose of the right, to have the power to take over our country. To counter that we need to look
at wealth taxes and taxing more capital gains. We don't need more Donald Trumps and Koch brothers.
Bravo to Ocasio-Cortez, and to Krugman. But what I'd like to know is why is it that such sensible and fair taxing policies
have not been promoted by current Democratic members of Congress? To answer my own question - they've been "bought" by corporate/1%
campaign contributions. This said, how will Ms. Ocasio-Cortez fare in the House? Conversely, how will the House fare with her
in it? Should be interesting to watch.
We need a "Jobs Created" form in the 1040 stack. In exchange for the tax cut, the very wealthy should be required to file it
for the same reason that the very poor are required to prove they qualify for the Earned Income Credit. How many jobs did you
create? How much were they worth? Write it down. Some ridiculously rich American volunteer should step forward with the last 10
years of their tax returns and corespondingly matched annual budgets to confirm 2 things that the GOP refuses to admit but uses
to underpin tax cuts for people who do not need one: 1-The Uber Wealthy aren't big job creators. 2-The impact they have on the
economy is far less than the average person who spends all their tax cut on goods and services. A higher tax rate, better matched
with uber high personal income generated by the global multiplier effect, will have a greater impact on the economy in one year
that one person can achieve in a lifetime. Kill the Trickle Down Theory before the GOP recycles it again.
@Geoffrey, you're mythologizing wealth. Most annual income over $10 million has nothing to do with being "super productive."
That's only true in an Ayn Rand novel.
I am fully aligned with Mr. Krugman when he bashes the idiocy of Trump's economic "policies". I part ways with him over his
advocacy of super high tax rates. He makes a case that we did so well when we had it but he, of all people, knows the difference
between correlation and causation. In the years without internet and with international movement by people and companies was full
of friction, this kind of extortion and "not caring" about what the "rich" thought held up. In today's world, you would massive
exodus of the most productive and economically active members of our society. It failed. In Europe and in the US, countries had
to contend with real competition from other geographies who were only too happy to welcome these folks. Another point, which Mr.
Krugman fails to address is this: who will put the capital in question to a more productive use - the government which collected
it as a tax or the businessman who has an opportunity to invest in the improvement he finds most efficient and effective? This
does argue for policies that encourage the 'right choice", but overall, the answer is known. This is why every true socialist
system has failed economically, and will continue to do so. 70% tax bracket is not the answer. It never was.
Many of the comments here are dismaying. The point here is that both the US economy and society are not sustainable in the
long-term with a tax system that creates massive inequality, public debt and disproportionately supports the enrichment of the
already-wealthy. There is a self-centred, growing (mostly Republican) billionaires club buying the political system, defining
public policy and not surprisingly they are the primary beneficiaries. US democracy is very broken and the rest of the world no
longer views it as the example it once was. The US needs more voices like OAC's.
I thought I already liked AOC a lot; now I like her even more, especially after her political platform about a free universal
health care reform proper of one of the major powers in the world.
@Jason "apply some creativity and critical thinking (you know - the kind that happens in the private sector)." Worked in the
private sector for 30 years. Never saw much of that.
So often, it seems like the Republicn tax plan is, "We need to lower taxes on the rich because eventually it will be good for
the middle class! Pay no attention to that sliver of middle class tax hike behind the curtain..." Why anybody takes their economic
rhetoric seriously when there are no credible cases that their plans have worked lo these past 40 years remains a mystery to me.
The real crime is how much of the pie so few take home in the first place and how little the great bulk of Americans see. If
there were a small village, and one powerful man making the rules on wealth distribution decided to give himself a ninety percent
cut of the wealth and leave the remaining ten percent to the rest of the townsfolk, they'd go after him with torches and pitchforks.
But we have a giant complicated impersonal economy, and this simple economic injustice gets lost and confused in the mix. But
the fact remains, the people with power - the stewards of our government and our economy - are abusing their power, and we as
individuals, and all of us as a society suffer greatly.
@Joe Hi, It would be progressive and banded, so you would only pay 70% on the very highest part of your earnings. So you would
be paying 30% on earnings up to say 100K, then 40% on earnings between 100K and 250K, and so on. Hope this helps.
If this country ever aspires to greatness again, it will take campaign finance reform and the end to vulture capitalism, including
raising tax rates on wealthy individuals and corporations. The supreme court has given corporations way too much power and it's
past time to take it back.
@Brinton I agree - a fair tax system would look at all income equally. A dollar of income would be treated the same regardless
of its source. The discount on capital gains makes no economic sense - this is "picking winners and losers", something the GOP
hates. Think of this: why is interest income taken at a higher rate than capital gains? The wrong answer is that the capital gain
came from taking a higher risk. Why does the tax law reward risk taking and by contrast punish safer investing with a higher tax
rate?
Thomas Picketty studied centuries of income inequality and found that without progressive government intervention, wealth disparities
tend to worsen. The single most effective way to shrink wealth disparities and grow the middle class is through progressive taxation,
aka, soak the rich. This is how Denmark does it. Funny thing, growing the middle class increases national happiness and strengthens
a sense of community. Big difference from the uber rich who buy islands just to live without neighbors. Living in a more equitable
society makes everyone happier.
@Tom Dr. K is all in on the taxing of wealth and cap gains at higher rates, and while I haven't read AOC's particular proposals
yet, no doubt she would agree.
@Annie I'm not sure a small local community group would effectively or efficiently provide some of the things we rely on the
government to provide -- healthcare coverage for instance (at least here in Canada) or a police force. Those skeptical of what
government does should try living in a country without musth government: Somalia, maybe.
We only need to look as far back as Kansas in 2012 to see a real life case study of republican tax policy in all its theoretical
glory. Governor Brownback and the republican legislature passed into law a low individual income tax rate and eliminated state
income taxes entirely for pass-through entities (ie small businesses) to spur job creation and investment in businesses. Not only
did it not create said jobs nor spur investment in businesses, the state collected $750mm less in income tax ($2.2b vs. $2.9b)
over 2014-16 and the state began FY 2017 with a $350mm deficit. Sadly the people who suffered disproportionately were residents
of small towns and districts whose districts didn't have strong enough balance sheets to weather unusually low levels of tax revenue,
where public services such as safety and schools struggled (many of which had to consider closing or consolidating). In addition,
the state diverted funds from infrastructure spending and universities to the general fund and spend down the state's cash reserves.
That is the result of a republican tax plan enacted.
@bcw And the exact same also goes for Trump himself, of course. Compare that to what Obama and the Democrats did: they increased
taxes for people like themselves multiple times, and then used that money to cover 20 million more Americans all while curbing
federal healthcare cost increases, AND by doing so saving an additional half a million American lives a decade. THAT is "putting
America first", outside of the GOP "alternative facts" world.
Another reason to tax the 1% at the highest rate possible: they would have considerably less money to spend on buying politicians
who will rig the system to benefit the wealthy at the expense of everyone else. I'm sure NYT's conservative commenters will say
"but...job creators!" Right. "Job creators" who are rapidly automating the means of production because robots don't need to be
paid a living wage. They never get sick or need vacations, either. Robots can work 24/7 without lunch or or bathroom breaks, too.
Unlike us pesky peasants with our quaint notions about Constitutional and civil rights, including "life, liberty and the pursuit
of happiness." The misanthropic rich deserve a good soaking, every now and then, to remind them that they're no better than us
and just as human as we are.
What Paul Krugman does not say (but knows all too well) is that due to various deductions and tax shelters, the effective (as
opposed to nominal) % of income paid in the 50's, 60's and 70's was not much more than now. For example, until 1986 taxpayers
were allowed to exclude 1/2 of their capital gains. So, if you were in a 70% tax bracket, the capital gains tax was 35%, in the
50% bracket you paid 25% and so on. Krugman knows this, but obviously does not mention it. He has to do his part to bamboozle
the rubes. Remember, this is the same guy who predicted on election night 2016, that the stock market would "never recover".
AOC should run for president in 2028, the first year she is eligible. She's smart and super-attractive, which will turn R's
into even crazier people than they are now, because people will always vote for someone who looks great. Would've worked for Beto
in Texas if not for the massive voter suppression they have there.
@Billy Walker - "What policy on Planet Earth could possibly justify the government becoming an equal partner, or better, with
someone's earnings?" Because there isn't a single person on the planet that works hard enough to "earn" $10 million per year,
let alone those who actually have that as an income. There's comes a point at which a person's "earnings" are nothing more than
benefits of position - which in and of itself isn't a problem. But it's important to acknowledge that this extra income is earned
solely because of the individuals below them, as well as the advantages the state/government has provided to allow those earnings
(typically through infrastructure, policies, protections, other indirect features, etc.), becoming an equal partner in redistributing
that extra income to those that actually worked to make it happen, or paid for the ability to earn it, is reasonable.
@Jose "aren't rich people part of our democracy? Don't they get a say as to whether they have to work and give away their earnings?"
They do ... they get one vote person just like everyone else. They do not get one vote per dollar of income, although some of
them act as if they should.
@Billy Walker "As someone who earns well less than $100k a year I simply cannot believe this nonsense of 70 or 80% tax rates.
Just because I am not smart enough to earn $5 or $10 million or more a year does not give the government the right to take most
of it. This tax concept is pure insanity. Even if it applies to earnings that only exceed the $10 mil number. Insane." You start
out with the wrong premise right out of the gate. Many in the top 1-2% have done nothing especially noteworthy to achieve their
wealth. They neither earned nor were particularly inventive. Some like Elon Musk definitely earned it. Others like the presidents
children just inherited the fruits of a lifetime of cons and scams against ordinary working Americans. In either case there is
a such a thing as an inflection point beyond which amassing further wealth means nothing. I see nothing wrong with taxing wealth
beyond that critical maximum at those higher rates. After all many of those people enjoy the fruits and stability of a society
made possible by the collective sacrifices of generations of Americans in wars past, present, and future. Much of the infrastructure
(bridges, highways, waterways, court systems, property rights etc) that exists today (such as it is) that makes the current economic
engine possible was bought and paid for by the millions upon millions of ordinary working Americans. The rich should pay more
because they benefit the most from this sacrifices others have made!
@Georgia M If you believe that the obscenely high and ever-rising incomes of the extremely rich are "their property" and that
their rigging of our economy, our taxation rules, and our political process played no role in their good fortune, you have not
been paying attention. A "young brilliant doctor" isn't even remotely in the class of the ultra-rich and is exactly the kind of
misleading example they love to point at, like "small businessmen." We are talking billionaires and close to it.
@Peter, that's a marginal tax rate, not the rate on all your income. Only income above, say, $1M per year would be taxed that
high. I assume most people can survive quite well on $1M per year, plus 30% of amounts above that.
The rich have figured out how to maximize their returns on investment - the most productive dollars the rich spend is to buy
Republican (and some Democratic) politicians. The Koch brothers invested a mere few hundred million to buy some elections and
have so far made about 1.4 billion dollars from the Republican tax cut, a return of a few hundred percent in one year; which will
continue every year going forward.
Hey, Prof Paul. I think we as a body politic need a refresher on what a marginal tax rate is? A 70% top marginal tax rate does
not mean that the people 'earning' a million only take home 300K. It just means that after some other threshold has been crossed
in terms of income after deductions, income above that level is taxed at increasingly higher levels. So that, say, the first 100k
is taxed at a certain level (n), but the last 100k is taxed at a level that equals 'n minus 100K' and minus the other increments
in income that kick in the higher marginal rates on the scale? Not elegantly stated, I know, but I find, over and over again,
that people seem to not have been taught the difference between a tax rate and marginal tax rate.
From the article: "AOC's advocacy of a tax rate of 70-80 percent on very high incomes." This shows her naivete as a young person
with limited years of working for a paycheck. At a certain point, if I'm only going to keep 20-30-cents of each additional dollar
I'm making no thanks time to pack up for the day, go home, relax and enjoy time with my family. I think at least 95% of people
would say the same thing. It's just not worth it especially to be paying for people who are staying home and people who are staying
home and pumping out more and more babies, while I responsibly only brought two children into the world and pay for them myself.
The Swiss have a wealth tax. People are taxed approximately 1% for money lying around in bank accounts and other assets. This
means taxes aren't focused on income per se, but accumulated wealth. I think it's an interesting idea for taxing the super wealthy.
The tax could be prorated, higher for those with more money and very low for those with just a little savings.
What this incredibly focused and accurate opinion piece does not mention is the uses that marginal taxes were put to or the
incentives people and companies had to lower their marginal taxes through reinvestment. Infrastructure was created, low cost higher
public education was expanded, basic research in those institutions was greater, and entire new industries were created, employees
were invested in. Now, we have the rich playing the W.S. casino, mostly controlled by bots, employees are commodities or apprenticed
and indebted, wages are supressed, there is not a strong infrastucture plan, I could go on. I say Make America Great Again, and
tax the rich.
@wes evans - I don't think that that is actually true. Furthermore, I'm not sure that the folks who do that work and are in
that tax bracket are working because of the money. Jeff Bezos? Bill Gates? Warren Buffett? (the list could be quite long). If
you taxed them at a higher rate, they wouldn't quit. In addition, many of those folks are no longer actually working, but simply
accruing wealth though investments. They won't suddenly uninvest because of higher taxes. Instead, we'd have better schools, better
healthcare, better transportation for everyone, and the economy would benefit much more as a result.
Obviously, the public is unaware that the tax rate during the Eisenhower Administration, for people making above $400,000,
was 90%. So, the idea that a 75% rate on the 0.1% is excessive is laughable. People in the 0.1% have many legal ways to reduce
their tax liability. As Warren Buffet had stated many time, he pays less taxes that his secretary and Buffet is one of the four
richest people in the world. The tax rate for people in his income bracket is not more than 39%. He, obviously, does not pay taxes
at that level. Go figure.
Ms. AOC comes off to me as a non-threatening American Congresswoman of Puerto-Rican descent. What is it about her that makes
her appear so dangerous to Trump's crazed male supporters? I blame most of it on her bright red lipstick, which for some reason
is always threatening to insecure men.
@Freda Pine Here's an early commenter who already detailed this out and should have gotten NYT Picked since a lot of readers
needed to read it in order to help shake loose a stuck wrong notion about what marginal rate means: Rational not Rationalize Milwaukee,
WI Please don't forget we are talking about the highest MARGINAL tax rate, e. g., the tax due on the income over $600,000 for
a couple filing jointly was 37% in 2018 and the same couple paid 35% on $400,001 to $600,00, and 32% on $315,000 to $400,000,
and 24% on $165,001 to $315,000, and 22% on $77,401 $165,000, and 12% on $19,051 to $77,400, and 10% on income up to $19,050.
What we need are more margins on the high end; to equate a $600,000 earner with a $10,000,000 earner is absurd. Nearly half the
top %1 of earners make over $10M. Why should they be taxed at the same rate as someone making 6% as much? A family making $36,000
(6% of $600,000) pays a highest marginal rate of 12%, while the family making $600,001 pays a highest marginal rate of 37% and
a family making $10M pays at the same highest marginal rate of 37%! The incentive for the top .1% in this set up is not to put
money back into their businesses or employ more people, but rather, it's to buy off politicians dedicated to keeping their tax
rate on the bulk of their income ridiculously low! When the Koch brothers thanked Paul Ryan for passing Trump's tax cuts it cost
them $500,000 (in donations to Ryan), but gained them $1 - $1.4 Billion in reduced taxes.
@Red Sox, '04, '07, '13, '18, How many uber rich like Romney or wealthy CEOs or golf club developers actually worked for poor
people? Gee, that's a tough one. Let me make it easy for you. Try zero. I am not wealthy and yet I never worked for a poor person
in my life either, because a poor person would not have had sufficient money to pay even my meager earnings. When you work and
pay taxes, you are not working for the poor, you are working taxes to support this country, and the many things it does for you.
Remind me again how many of Romney's many sons enlisted. Another toughie. Again, let me make it easy for you. The answer is zero.
Oh, that's right. Their "service to their country" consisted of helping Romney get elected. Kind of like Trump's sons service
to their country. Or Trump's purple heart.
@talesofgenji Americans abroad are still required to file US tax statements. Of course, if they want to get rid of their US
citizenship, they can. My guess is there is a way to capture that tax revenue. Perhaps starting with reminding the rich that they
live in a society, and their wealth is tied to the health of the society.
Why are so many dead set against paying taxes? To use an old cliche "there is no such thing as a free lunch". This is how government
services are paid for. Where would we be without government services? Are you willing to do without police, firemen, road crews,
sanitation, the armed forces, aviation regulators, stop signs, parks and countless other things that government provides. Tax
rates need to take into account income. The poor and the middle class should be taxed at a much lower rate than the wealthy. The
wealthy can afford to have more taken in taxes. Do you really think they would notice? Greed is not an exemption. We should all
be proud to pay our fair share of taxes. We live in a great country. Taxes are the levy we pay to keep it great.
Hey Paul why don't we just tax everyone at 100% and then redistribute to everyone perfectly equally? That would minimize the
effect of diminishing marginal utility!! Hey Paul when are you going to wake up? Stagflation happened your position has been losing
the argument for 40 years now, I am surprised you aren't used to it by now. Free movement of capital, free movement of labor,
free trade. And no redistribution, that is where we are heading.
When I first saw AOC's tax proposal as a headline (and not reading the article), I did think, "Wow, that's too high!" But after
thinking through the issue with Krugman's help, I've come around and now agree with AOC. I do think it'll be a tough sell to a
sceptical public (surely made worse by conservative lobbying), but if Democrats can tune the public with what prosperity was like
in the '50 with progressive taxes in place, I think there's a good chance that a majority of Americans will back this vision.
But the work had to start now and with urgency (and without the shutdown of our government!).
There's this popular myth that supposedly tons of conservatives went "hysterical" over a perfectly innocent video of Ocasio-Cortez
dancing around with friends. How many people exactly were "hysterical"? I keep reading this, and as far as I can tell it's just
a myth. Was there maybe one fool who posted the video in a misguided attempt to somehow embarrass her? I guess, probably. But
please just face reality and recognize that beyond a few negligible cranks, nobody cares.
Please make a list of productive Americans by job title. Or is your list by income level? Are public school teachers productive?
If so, why have their incomes been nearly flat for decades? Why has the median income of Americans not kept pace with inflation
for over 25 years? They haven't been productive? They have been. Big Business hasn't shared those gains in productivity via $wages.
The IBT of those businesses has soared.
We hear a lot about "hard-earned" income and "hard-earned" dollars. Very well. It IS hard to earn money, at least for most
people, so perhaps the government shouldn't tax income from wages, salaries and professional fees--and even from gambling--at
such a high rate. Maybe we should change the system by pushing the top income tax rate downward and then raising the estate tax
(often called the "inheritance tax"). That way, more "hard-earned" money will stay with the taxpayers who earned it, and the government
would take a little more of the genuinely unearned money. An old saying about the people who were born on third base and thought
they hit a triple comes to mind
First, I believe Picketty also recommends similar highly progressive rates. Second, I'd be curious know what effect such rates
would have on top-tier inflation? It seems clear that "inflation" is relatively low and stable because it no longer enters into
wages. At the upper income level, meanwhile, inflation appears rampant. Everything in top-tier consumption, from art and high-end
property to financial advice, bespoke suits, opera tickets, luxury hotels, political leverage, and legal fees, seems to be almost
hyperinflating. This in turn drives the rivalrous demand for even more concentrated wealth at the top, a keep-up-with-the-Jones
among billionaires . We might be doing the rich a favor by putting a tax chill on their metastasizing lifestyles.
I assume that you work hard to make a living. Do you think that investment bankers and tech CEOs work 5000 times harder than
you? I know a guy who wrote a computer program to trade stocks. He doesn't work at all, but makes more in a week than you make
all year. Does that seem fair? The super-rich are able to buy influence, subjugate our democratic system, and push through laws
that make them even richer - while making it harder for folks like you to get ahead. Does that seem fair? And you are worried
about billionaires only bringing home $2 million / year?
But this entire column presumes that the Republicans believe in science, data and facts. Despite 70+ years of evidence, knowledge
and truth has not "trickled down" into the average Republican's mind. In fact, in the Trump era, it's gotten worse -- Republicans
now believe in "alternative facts," which they make up to match whatever it is that they want to justify, and they assert that
"truth isn't the truth." So good luck to OAC as she tries to convince Republicans about the efficacy of "a tax rate of 70-80 percent
on very high incomes." Republicans, including the Trump administration, do believe that the 1950s was the best decade ever in
the post-WWII era – not because of its 91% top tax rate on income, but for entirely different reasons that have nothing to do
with fiscal policy.
I'm your average democratic socialist living north of your country and, yet I confess this article doesn't sit right with me.
I enjoy reading Mr Krugman and I will read him first in your paper. What irks me though is his yup yup it's okay to soak the rich
because it makes economic sense. Even if you could prove that taxing the rich at 75% won't harm economy, should you do it? That
is to say, the wealth of the rich is their property. Just like my meagre possessions are my property. As a Canadian I pay around
29% income taxes (even working class Canadians pay a fair amount of tax). Wealthier Canadians pay around 55% of their income.
We are fortunate that wealthy people feel invested in the community here and tolerate the higher taxes. The well-being of our
public services is dependent on all people feeling they get something in return for their tax dollars. I guess what I am getting
at is that there is a sort of social contract that all citizens are invested in-poor and rich. I recently spoke to a young brilliant
doctor and asked if he wanted to move to the US (he has had some great offers). He said no, he wants to use his skills in the
community. I am grateful this young man will work and contribute here. So, why increase his tax level even further? Saying that
he has the money for the taking is not acceptable. I wish Ms Ocasio Cortez luck, but I hope these young socialists reign in the
glee at the prospect of fleecing their fellow citizens.
@Billy Walker they don't take "most of it." they only take that rate in the highest income percentile. So only the last marginal
dollars earned. It is doubtful ANY CEO is worth the pay they get. and most of it is in stock options, the proceeds of which are
not even discussed here because they are capital gains, not income. So, most CEO's only make a few hundred thousand in "income"
and the rest is in stock options for which they are taxed at a much, much lower rate. That is how skewed our idiotic tax system
is. They game it and don't even have to count their obvious income as actual income. Totally corrupt.
While there's no denying that many of the wealthy achieve success by their talent and hard work, no one becomes wealthy solely
on his or her own. Chance always plays a role in anyone's success, and no one's success is achieved without extensive support
from our society's institutions and from others. The success of any individual is therefore always a collective success -- created
by a combination of the individual's own talents, the support of others, the advantages provided by our society, and the vagaries
of chance. Because of this it is completely justified to expect -- and to demand if necessary -- that the wealthy give back some
portion of their wealth to the community that contributes so much to their ability to become wealthy. Whether the share given
back is 20%, 50%, or 80% should be determined based on two factors: first, how much does society need from the wealthy to continue
to provide an environment in which as many as possible can succeed and, second, how important is it to maintain individually-held
concentrations of wealth either to provide incentives for success or to allow for significant private expenditures and investment
to complement our public expenditures and investment. While a 70% marginal tax rate on the wealthy sounds high given recent policy,
the crumbling state of our public infrastructure, our fraying social safety net, and the growing inequities in access to the benefits
of our society suggest a need for higher tax rates.
In 1960 when Eisenhower was president, the top marginal tax rate in the US was 93 percent, we were building interstate highways
and quadrupling our higher education system via the GI bill, and the American economy was the envy of the world. So this notion
that the country is better off if the rich don't pay taxes utterly ludicrous -- it is simply the invention of rich people who
think they deserve to live tax-free. Since our democracy is broken and the rich basically own Congress, we will probably keep
cutting taxes on rich people until they go negative, at which point American taxpayers will be paying the rich just for their
overwhelming wonderfulness.
As a small retail business owner I am continuously flabbergasted by chamber of commerce type's resistance to taxing the rich
and increasing the minimum wage. My customers are NOT the 1% and every time wages have gone up my payroll has gone up 20% but
my gross income has also increased by 20%. That is a good deal, and if my income taxes went up as a result of all my increased
profit it would still be a good deal.
Shouldn't we be talking about effective tax rates? Did people actually pay those high marginal rates? Given all the tax loopholes
at the time, I don't think so.
@Josh I have an even better idea--let's tax everyone at 0%! We'll all have lotsa money and we'll have a great big party. There
are some downsides like not having an electricity grid, police, or firemen but on the other hand--whoopee!
Good job making taxation policy interesting to read about. Maybe Dr. Krugman could clarify why and how the "taxes are bad"
crowd insists on misrepresenting the marginal rate as the total rate, among other inaccuracies in a four-decade campaign to demonize
taxation.
We need to assess the question of wether many of the rich "earn" money. You don't earn $200M in stock options and grants. What
you have done is benefitted from a system that increasing rewards those with the power and the influence to rewrite the rules
to their benefit and the the detriment of everyone else. How these people can take such a large portion of the corporate pie when
lower paid employees barely get by is unconscionable.
Here are some facts Krugman will not mention. From 2014 At least 45% of Americans pay ZERO Federal income tax. The top 1 percent
of taxpayers earned 20% of all Adjusted Gross Income. That same top 1% of taxpayers paid almost 40% of all federal income taxes.
The top 1% of taxpayers accounted for more income taxes paid than the bottom 90% collected. One-fifth of the US population gets
more back in refunds than they pay in Federal taxes. Keep doing the Robin Hood routine and the 1%' ers will move ALL of their
money off shore.
@Ma Ah, yes - the wisdom of simplistic remarks. Unfortunately it takes actual information and insight to even begin to compete
with an economist of Krugman's expertise. You seem to be confused about what profit is, or the theory used in optimization of
profit (incremental spending). You absolutely want to spend up to the point where the next dollar brings in another dollar of
profit but not beyond. Spending less leaves money (profit) on the table. Could it be that you don't understand calculus? I'm afraid
that economics, and incremental tax rates are a bit more complex than that. Your dig about social conscience is duly noted, as
is your missing the point of his analysis. None of this is based on social conscience, but in what generates maximum economic
growth. Paul not only gives direct evidence of a reduction in the growth rate that correlates with the reduction of tax rates,
he dissects the reasons why. Want is not a straight line curve, something that the 'greed is good' crowd has neglected for over
40 years. Of course, your only retort to evidence and thoughtful analysis by a Nobel laureate is to label his thesis 'lunacy'.
Sorry, but without evidence, solid reasoning or even standing in the field no one is going to pay attention. Which is a good thing,
it's time rationality regained the upper hand in public policy and politics.
@Prof Here are some facts you didn't mention. Many Americans aren't paid enough by the "job creators" to have enough tax liability.
When you pay people low enough wages, they end up being below the standard deduction. The top 1% has significantly more *wealth*
than their wages indicate. Our tax scheme is mildly progressive at this point, so it should not be surprising that they pay a
higher percent tax per dollar earned than someone earning, say, $25,000 a year. As of 2015, 13.5% of Americans lived in poverty.
That's over 40 million people. Hard to have much income to tax in the first place when one is poor. Keep doing the reverse Robin
Hood routine and the social fabric of this nation will tear so badly that our norms will disappear and we will descend into the
chaos that permeates nation-states with extreme wealth inequality.
At the very least, the FICA paycheck deduction should be based on every dollar earned rather than being capped at $128,000,
(or so.) For one thing, this would go a long way to solve the problem of shortfalls in the Social Security fund for the large
baby boom bump. How is it justified that this deduction should be capped for the highest earners??!
@Smokey geo Amazing. We've literally tried the approach you advocate for the past 30+ years, and all the evidence shows that
we're worse off. Giving rich people more money on the hop that it trickles down has literally led to stagnant wages, obscene inequality,
and lower growth than in the previous decades. You can try to dress it up however you want - feel free to throw another equation
our way - but the proof is in the pudding. We've had almost four decades of evidence that refutes your argument.
@Michael Evans-Layng, PhD, Correlation v. Causation notwithstanding, as in life , tines change. Deductions were abused but
companies were reinvesting heavily. Today they buy back their shares and salt the rest away offshore. Bring back the taxes but
invest it wisely. Infrastructure, education, health care , research, you know, like China kinda sorta.
Please, no socialism in the US. It has been tested in many many many places, it is always a failure. Why try??? France has
the second highest taxes in the world and massive protests. It is a tempting policy, Why not tax the super rich? Seems to make
so much sense. The problem is that IT DOES NOT WORK. Tax at whatever rate you want, 76%, 80%, 99%, lets try for a few year, you'll
get some money first and then less, less, less because society gets poorer, people and capital leave, so eventually you're back
to where you were but with less wealth. Society needs to create wealth not be obsessed with taking from others. Policy of envy
is the worse.
@Ed So the high tax rates in the mid-20th century were...socialism? Scare tactics aren't helpful. The rest of your comment
is demonstrably not true based on our own history. It creates wealth *for our country* when we tax the rich appropriately. We
should definitely not be focused on trying to create wealth just for individuals. How does that promote the general welfare? Try
again.
The Dems need to articulate this with greater understanding and confidence. Most people do not understand "effective tax rate,"
and thus hear 73% and think it's on the entire earnings of an individual. Americans don't understand carried interest, the Soc
Sec contribution max on earnings, and SEP and other pre-tax benefits for the wealthy. Then they hear, "Vote for me, I'll cut your
taxes," and we deepen the mess.
Discussions of higher taxes on the wealthy typically fail to clarify that higher taxation rates in all likelihood will only
kick in once you reach a certain (much higher) level of income So a taxation rate of 50% on a $1 milllion salary doesn't mean
that the individual pays $500,000 in federal taxes. In the 1950s the top tax rate was 91%, but it didn't kick in until you reached
an annual income of $200,000, which in today's dollars is about $1.85 million. So what seems like grossly unfair government confiscation
of hard-earned income -- when you start throwing around numbers like a 50% tax rate -- is nowhere near as harsh as it seems. According
to one website, effective tax rates in the 1950s on the wealthy were closer to 42%.
https://taxfoundation.org/taxes-rich-1950-not-high
/
@Darsan54 Yes, there are too many deductions, but if Democrats are going to protest over removing the deduction for state taxes
(a highly progressive reform that only affected high earners), Democrats aren't likely to do away with the mortgage interest deduction,
which is the most significant remaining income tax distortion. . AOC and PK both ignore the real elephant in the room, which is
the rates of divident (22%) and capital gains (20%) tax rates. We should be taxing capital income at labor income rates, or even
better taxing capital itself. Once again, though, the educated elite donor base in the Democratic party would be hurt by taxes
on their accumulated wealth. The debate over labor income taxes is mostly a snow-screen so the Democratic party doesn't have to
talk about wealth inequality and our failure to tax wealth.
Growing income inequality saps our strength as a nation, as it widens economic disparities and undermines our sense of common
purpose. Higher marginal rates for the wealthy will help everyone. The wealthy will surely put patriotism and the common good
above greed and self-interest.
I know this opinion piece addresses only personal income tax but I don't think you should separate the issue from corporate
income tax. As many economists have already noted, based on current research, corporations have plowed most of their windfall
from their lower tax rates into buying back stock and rewarding the officers of the company,rather than into higher wages for
middle class workers in the company. Let's not forget this crucial inequity and make restitutions in both cases.
It's not just taxing high earners. In Australia we lose more tax revenue from corporations avoiding taxation. For example,
News Corporation (owned by Rupert Murdoch): -- had revenue of A$2 billion and paid no tax on it -- received A$30 million tax dollars
from the Federal Government to develop women's sports coverage on his TV channel, Foxtel, coverage which never eventuated. --
his nephew, Matt Handbury, received A$14 million for 'research' which has been totally undocumented, but is believed to have gone
to the IPA, a conservative 'think tank' established by Keith Murdoch, Rupert's father. I've no doubt the same largesse to corporations
& their owners is seen in the USA, which provides our lot of kleptocrats with so much inspiration.
Unfortunately, with second-rate economists and third-rate human beings like Arthur Laffer advising them, Republicans are not
likely to change their views. It will need Democrat's getting hold of both the legislative and presidential branches of government
for sense to prevail.
"... You know we can't touch the corporations - they are sacrosanct because they are the supposed "job creators" - this one title gives them carte blanche to act however they like, to make spurious claims about economies faltering, businesses going offshore and unemployment. They also donate heavily to the political parties. ..."
Shhhh... whatever you do, don't ever let them hear you criticizing the "job creators" or
there will be trouble.
You know we can't touch the corporations - they are sacrosanct because they are the
supposed "job creators" - this one title gives them carte blanche to act however they like,
to make spurious claims about economies faltering, businesses going offshore and
unemployment. They also donate heavily to the political parties.
Repeat after me:
"Blessed are the job creators"
"Blessed are the job creators"
"Blessed are the job creators"
"For THEY shall inherit the wealth"
"... Being inspired by stories of success is one thing, but I think we've gone too far and created the cult of the entrepreneur. It starts with people idolizing the billionaires in hoodies and assuming they'll have the same success trajectory, despite the fact that most people don't experience that type of success with any of their businesses, let alone their first. Then enter a new vocabulary focused on "hustle" and "lean startup" and "minimum viable product," which glorifies working practically 24/7 for nothing more than equity and crossed fingers. Then add a dash of absurd investments, like the $41 million that went into startup Color before it even launched (it eventually failed spectacularly). ..."
"... The glorification of entrepreneurship naturally tempts people to use the term to build themselves up. This is especially evident on Twitter and LinkedIn where I've often seen entrepreneur listed in someone's bio without being able to figure out what he or she actually does. It also has the consequence of undermining people who work hard, achieve great success and are integral to a company's success without being entrepreneurs -- the Sheryl Sandberg rather than the Zuckerberg. ..."
"... With all the hype surrounding entrepreneurs, there's an elephant in the room: most people want the money, accolades, and power that come with being a successful entrepreneur, but they don't want to put in the years of hard work. ..."
"... Even if you accept the fact that being an entrepreneur involves no time off, long hours, and extremely limited resources, you still have to contend with luck. As much as you might want to be the next TechCrunch headline, and as much as you might have a great concept and the skills to make it happen, it might be the wrong time or the wrong place for your idea. ..."
"... Not everyone is prepared to spend years on a project that likely won't work out, and there's nothing wrong with that. ..."
Entrepreneurship is having a moment. Innovative people with the resources, know-how and spunk to bring their ideas to life have
been doing so since the dawn of civilization, but in the age of Silicon Valley tech startup success stories, crowdfunding platforms
like Kickstarter, and investment programs like Dragons' Den, you could say entrepreneurs have reached celebrity status.
Like the countless young girls singing into their hairbrushes and dreaming of becoming the next Beyonce, it seems like more and
more people are setting their sights on venturing out on their own to create the next big thing and become the next Mark Zuckerberg,
Jack Dorsey, or Elon Musk.
Being inspired by stories of success is one thing, but I think we've gone too far and created the cult of the entrepreneur. It
starts with people idolizing the billionaires in hoodies and assuming they'll have the same success trajectory, despite the fact
that most people don't experience that type of success with any of their businesses, let alone their first. Then enter a new vocabulary
focused on "hustle" and "lean startup" and "minimum viable product," which glorifies working practically 24/7 for nothing more than
equity and crossed fingers. Then add a dash of absurd investments, like the $41 million that went into startup Color before it even
launched (it eventually failed spectacularly).
The first problem I see with the cult of the entrepreneur is that for some people the title seems to take precedence over the
success of the product or service they created. Like an author who's never had a book published, calling yourself an entrepreneur
is meaningless if you can't point to the fruits of your entrepreneurship. The word has a misleading air of success.
The glorification of entrepreneurship naturally tempts people to use the term to build themselves up. This is especially evident
on Twitter and LinkedIn where I've often seen entrepreneur listed in someone's bio without being able to figure out what he
or she actually does. It also has the consequence of undermining people who work hard, achieve great success and are integral to
a company's success without being entrepreneurs -- the Sheryl Sandberg rather than the Zuckerberg.
The focus of any business should always be its customers and how you're providing value for them while making sure your business
model is sound and adaptable. There are a lot of moving parts and nobody can make it work alone. There are investors, business partners,
people who offer advice along the way, and, of course, the people who end up working for that company in its early stages and as
it grows. In fact, these people probably possess a lot of entrepreneurial qualities, but they don't get to call themselves entrepreneurs
because they work for someone else.
With all the hype surrounding entrepreneurs, there's an elephant in the room: most people want the money, accolades, and power
that come with being a successful entrepreneur, but they don't want to put in the years of hard work.
Even if you accept the fact that being an entrepreneur involves no time off, long hours, and extremely limited resources, you
still have to contend with luck. As much as you might want to be the next TechCrunch headline, and as much as you might have a great
concept and the skills to make it happen, it might be the wrong time or the wrong place for your idea.
As an entrepreneur you're
betting your livelihood and your career at every stage. You might see examples of perceived overnight successes all around you, but
you don't see the years of struggle and failure that often preceded them.
Bitstrips , which exploded onto the app scene recently, was founded in
2007, the same year the first iPhone came out. Even if you have all the confidence in the world in your idea, you don't know when
(if ever) the exact conditions needed for success will come together.
Not everyone is prepared to spend years on a project that likely won't work out, and there's nothing wrong with that.
Eschewing years of financial struggle and uncertainty to work for a company that has already proven itself does not mean you've
given up on success or sold yourself short.
The entrepreneurial spirit is a great thing that can manifest itself in different people in many different ways, regardless of
what position they hold in a company. Trying to impress people by calling yourself an entrepreneur on social media is not one of
them.
"... Like many of its Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a move up the technology curve). ..."
"... The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according to the theory, precluded the ability to compete globally. ..."
"... "Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. ..."
"... If the choice is between putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly assuming that they can make better use of that money than the company itself can. ..."
"... It is an absurd conceit to believe that a dilettante portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy embedded in the myth of shareholder capitalism ..."
"... When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. ..."
The fall of the Berlin Wall and the corresponding end of the Soviet Empire gave the fullest impetus imaginable to the forces of
globalized capitalism, and correspondingly unfettered access to the world's cheapest labor. What was not to like about that? It afforded
multinational corporations vastly expanded opportunities to fatten their profit margins and increase the bottom line with seemingly
no risk posed to their business model.
Or so it appeared. In 2000, aerospace engineer L.J. Hart-Smith's remarkable paper, sardonically titled
"Out-Sourced Profits – The Cornerstone of Successful Subcontracting," laid
out the case against several business practices of Hart-Smith's previous employer, McDonnell Douglas, which had incautiously ridden
the wave of outsourcing when it merged with the author's new employer, Boeing. Hart-Smith's intention in telling his story was a
cautionary one for the newly combined Boeing, lest it follow its then recent acquisition down the same disastrous path.
Of the manifold points and issues identified by Hart-Smith, there is one that stands out as the most compelling in terms of understanding
the current crisis enveloping Boeing: The embrace of the metric "Return on Net Assets" (RONA). When combined with the relentless
pursuit of cost reduction (via offshoring), RONA taken to the extreme can undermine overall safety standards.
Related to this problem is the intentional and unnecessary use of complexity as an instrument of propaganda. Like many of its
Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious
and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a
move up the technology curve).
All of these pernicious concepts are branches of the same poisoned tree: "
shareholder capitalism ":
[A] notion best epitomized by Milton Friedman that the only social
responsibility of a corporation is to increase its profits, laying the groundwork for the idea that shareholders, being the owners
and the main risk-bearing participants, ought therefore to receive the biggest rewards. Profits therefore should be generated
first and foremost with a view toward maximizing the interests of shareholders, not the executives or managers who (according
to the theory) were spending too much of their time, and the shareholders' money, worrying about employees, customers, and the
community at large. The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised
solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive
stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction
of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced
by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according
to the theory, precluded the ability to compete globally.
"Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. In essence, it means maximizing the returns
of those dollars deployed in the operation of the business. Applied to a corporation, it comes down to this: If the choice is between
putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the
optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly
assuming that they can make better use of that money than the company itself can.
It is an absurd conceit to believe that a dilettante
portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate
productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy
embedded in the myth of shareholder capitalism.
Engineering reality, however, is far more complicated than what is outlined in university MBA textbooks. For corporations like
McDonnell Douglas, for example, RONA was used not as a way to prioritize new investment in the corporation but rather to justify
disinvestment in the corporation. This disinvestment ultimately degraded the company's underlying profitability and the quality
of its planes (which is one of the reasons the Pentagon helped to broker the merger with Boeing; in another perverse echo of the
2008 financial disaster, it was a politically engineered bailout).
RONA in Practice
When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized
workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. Productivity
is diminished, even as labor-saving technologies are introduced. Precision machinery is sold off and replaced by inferior, but cheaper,
machines. Engineering quality deteriorates. And the upshot is that a reliable plane like Boeing's 737, which had been a tried and
true money-spinner with an impressive safety record since 1967, becomes a high-tech death trap.
The drive toward efficiency is translated into a drive to do more with less. Get more out of workers while paying them less. Make
more parts with fewer machines. Outsourcing is viewed as a way to release capital by transferring investment from skilled domestic
human capital to offshore entities not imbued with the same talents, corporate culture and dedication to quality. The benefits to
the bottom line are temporary; the long-term pathologies become embedded as the company's market share begins to shrink, as the airlines
search for less shoddy alternatives.
You must do one more thing if you are a Boeing director: you must erect barriers to bad news, because there is nothing that bursts
a magic bubble faster than reality, particularly if it's bad reality.
The illusion that Boeing sought to perpetuate was that it continued to produce the same thing it had produced for decades: namely,
a safe, reliable, quality airplane. But it was doing so with a production apparatus that was stripped, for cost reasons, of many
of the means necessary to make good aircraft. So while the wine still came in a bottle signifying Premier Cru quality, and still
carried the same price, someone had poured out the contents and replaced them with cheap plonk.
And that has become remarkably easy to do in aviation. Because Boeing is no longer subject to proper independent regulatory scrutiny.
This is what happens when you're allowed to "
self-certify" your own airplane , as the Washington Post described: "One Boeing engineer would conduct a test of a particular
system on the Max 8, while another Boeing engineer would act as the FAA's representative, signing on behalf of the U.S. government
that the technology complied with federal safety regulations."
This is a recipe for disaster. Boeing relentlessly cut costs, it outsourced across the globe to workforces that knew nothing about
aviation or aviation's safety culture. It sent things everywhere on one criteria and one criteria only: lower the denominator. Make
it the same, but cheaper. And then self-certify the plane, so that nobody, including the FAA, was ever the wiser.
Boeing also greased the wheels in Washington to ensure the continuation of this convenient state of regulatory affairs for the
company. According to OpenSecrets.org ,
Boeing and its affiliates spent $15,120,000 in lobbying expenses in 2018, after spending, $16,740,000 in 2017 (along with a further
$4,551,078 in 2018 political contributions, which placed the company 82nd out of a total of 19,087 contributors). Looking back at
these figures over the past four elections (congressional and presidential) since 2012, these numbers represent fairly typical spending
sums for the company.
But clever financial engineering, extensive political lobbying and self-certification can't perpetually hold back the effects
of shoddy engineering. One of the sad byproducts of the FAA's acquiescence to "self-certification" is how many things fall through
the cracks so easily.
"... China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China's economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom. ..."
"... The Fordney-McCumber Tariff gave Presidents Warren Harding and Calvin Coolidge the revenue to offset the slashing of Wilson's income taxes, igniting that most dynamic of decades -- the Roaring '20s. ..."
"... Once a nation is hooked on the cheap goods that are the narcotic free trade provides, it is rarely able to break free. The loss of its economic independence is followed by the loss of its political independence, the loss of its greatness and, ultimately, the loss of its national identity. ..."
As his limo carried him to work at the White House Monday, Larry Kudlow could not have been pleased with the headline in The Washington
Post: "Kudlow Contradicts Trump on Tariffs."
The story began: "National Economic Council Director Lawrence Kudlow acknowledged Sunday that American consumers end up paying
for the administration's tariffs on Chinese imports, contradicting President Trump's repeated inaccurate claim that the Chinese foot
the bill."
A free trade evangelical, Kudlow had conceded on Fox News that consumers pay the tariffs on products made abroad that they purchase
here in the U.S. Yet that is by no means the whole story.
A tariff may be described as a sales or consumption tax the consumer pays, but tariffs are also a discretionary and an optional
tax.
If you choose not to purchase Chinese goods and instead buy comparable goods made in other nations or the USA, then you do not
pay the tariff.
China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is
howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China's
economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom.
Tariffs were the taxes that made America great. They were the taxes relied upon by the first and greatest of our early statesmen,
before the coming of the globalists Woodrow Wilson and FDR.
Tariffs, to protect manufacturers and jobs, were the Republican Party's path to power and prosperity in the 19th and 20th centuries
, before the rise of the Rockefeller Eastern liberal establishment and its embrace of the British-bred heresy of unfettered free
trade.
The Tariff Act of 1789 was enacted with the declared purpose, "the encouragement and protection of manufactures." It was the second
act passed by the first Congress led by Speaker James Madison. It was crafted by Alexander Hamilton and signed by President Washington.
After the War of 1812, President Madison, backed by Henry Clay and John Calhoun and ex-Presidents Jefferson and Adams, enacted
the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming
U.S. market. It worked.
Tariffs financed Mr. Lincoln's War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley,
who said that a foreign manufacturer "has no right or claim to equality with our own. He pays no taxes. He performs no civil duties."
That is economic patriotism, putting America and Americans first.
The Fordney-McCumber Tariff gave Presidents Warren Harding and Calvin Coolidge the revenue to offset the slashing of Wilson's
income taxes, igniting that most dynamic of decades -- the Roaring '20s.
That the Smoot-Hawley Tariff caused the Depression of the 1930s is a New Deal myth in which America's schoolchildren have been
indoctrinated for decades.
The Depression began with the crash of the stock market in 1929, nine months before Smoot-Hawley became law. The real villain:
The Federal Reserve, which failed to replenish that third of the money supply that had been wiped out by thousands of bank failures.
Milton Friedman taught us that.
A tariff is a tax, but its purpose is not just to raise revenue but to make a nation economically independent of others, and to
bring its citizens to rely upon each other rather than foreign entities.
The principle involved in a tariff is the same as that used by U.S. colleges and universities that charge foreign students higher
tuition than their American counterparts.
What patriot would consign the economic independence of his country to the "invisible hand" of Adam Smith in a system crafted
by intellectuals whose allegiance is to an ideology, not a people?
What great nation did free traders ever build?
Free trade is the policy of fading and failing powers, past their prime. In the half-century following passage of the Corn Laws,
the British showed the folly of free trade.
They began the second half of the 19th century with an economy twice that of the USA and ended it with an economy half of ours,
and equaled by a Germany, which had, under Bismarck, adopted what was known as the American System.
Of the nations that have risen to economic preeminence in recent centuries -- the British before 1850, the United States between
1789 and 1914, post-war Japan, China in recent decades -- how many did so through free trade? None. All practiced economic nationalism.
The problem for President Trump?
Once a nation is hooked on the cheap goods that are the narcotic free trade provides, it is rarely able to break free. The
loss of its economic independence is followed by the loss of its political independence, the loss of its greatness and, ultimately,
the loss of its national identity.
Brexit was the strangled cry of a British people that had lost its independence and desperately wanted it back.
How the Medal of Freedom Became a Fraud
Before we pass out any more of these devalued trophies, we need to figure out what "freedom" means.
By
Andrew J. Bacevich
•
May 7, 2019
As headlines go, the one appearing in
The New
York Times
on November 16, 2018 does not qualify as a showstopper. "Trump
Awards Medals of Freedom to Elvis, Babe Ruth and Miriam Adelson," the
Times
reported. Most readers taking note of this ceremony, which presidents have been hosting annually for over a half-century
now, probably shrugged and poured themselves another cup of coffee. Yet here, in this accolade conferred on the King,
the Bambino, and the wife of a casino mogul, we get a glimpse of how far down the road to perdition our beloved country
has traveled.
For a century and a half after declaring its independence, the United States managed
to survive -- nicely, in fact -- without any such means of conferring presidential favor. Only in the 1960s did John F.
Kennedy discover this void in American civic life and set out to fill it. His decision to do so cannot be understood
except in the context of the then-ongoing and frosty Cold War.
Kennedy's predecessor, Dwight D. Eisenhower, had made much ado about America's close
association with the divine, inserting "under God" into the Pledge of Allegiance and signing legislation making "In God
We Trust" the national motto. Here, according to Ike, was the essence of what distinguished us from our adversaries. We
believed; they did not.
Under Kennedy, God suffered a demotion of sorts, supplanted by
freedom
in the hierarchy of objects deemed
worthy of worship. In his famous inaugural address, Kennedy not only anointed freedom as the supreme value but also
declared that it was in imminent peril. Simultaneously celebrating freedom -- implicitly defined as opposing
communism -- while warning of its impending demise emerged as an abiding theme of JFK's abbreviated and largely
undistinguished presidency.
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Considered in that context, the Medal of Freedom forms part of a larger effort to
package in a single word America's mission, history's purpose, and the aspirations of all humanity, with Kennedy himself
their foremost champion. According to the directive establishing the award, its aim was to honor individuals making an
especially meritorious contribution to (1) the security or national interests of the United States, or (2) world peace,
or (3) cultural or other significant public or private endeavors.
The criteria are worth noting. The first and second qualify as straightforward and
unobjectionable, if perhaps not mutually consistent. The third criterion, by comparison, is broad and vague -- sufficiently
elastic to include just about anyone doing anything that happens to catch a president's fancy.
Almost from the outset, recipients of the Medal of Freedom have tended to fall into
one of three categories. In the first are individuals who testify to the incumbent president's preferred self-image. For
Kennedy that meant sophistication and class. So the first tranche of those selected to receive the Medal of Freedom
featured such notables as singer Marian Anderson, cellist Pablo Casals, photographer Edward Steichen, and literary
critic Edmund Wilson.
The second category is all about virtue signaling, as exemplified by Richard Nixon's
choices of labor leader David Dubinsky and composer Duke Ellington to receive the Medal of Freedom. Evidence suggesting
that Nixon was particularly fond of left-leaning labor organizers or African Americans is sparse. Yet by honoring
Dubinsky and Ellington, Nixon could strike an appearance of being broad-minded, tolerant, and even hip, at virtually no
cost to himself.
In the third category are individuals chosen to make a political statement, more often
than not catering to a particular constituency. Ronald Reagan's selection of Louis L'Amour, author of potboiler cowboy
novels, pleased his Western fan base. Similarly, his choices of Milton Friedman, Clare Boothe Luce, and Albert
Wohlstetter found favor with free marketeers, devout anti-communists, and neoconservatives, respectively.
Little of this mattered. The Medal of Freedom's substantive impact was on a par with
the presidential pardon granted to a couple of lucky turkeys just prior to Thanksgiving each year. It amounted to little
more than a photo-op. In the larger scheme of things, the Medal of Freedom did nothing to hasten the downfall of the
Evil Empire. The best we can say is that it did not retard the eventual outcome of the long twilight struggle.
With the end of the Cold War, however, and especially after 9/11, the Medal of Freedom
went from being irrelevant to somewhere between whimsical and fraudulent. Any correlation with freedom as such, never
more than tenuous in the first place, dissolved altogether. For evidence, we need look no further than the current crop
of awardees.
That the Sultan of Swat and Elvis each left an indelible mark on American life is no
doubt the case. Yet Babe Ruth died in 1948 while Presley "left the building" in 1977. Awarding them the Medal of Freedom
at this point adds nothing to their stature and smacks of presumption, more or less akin to the Congress promoting
George Washington to the rank of General of the Armies back in 1976. Besides, if Ruth, why not Lou Gehrig? Why not the
entire 1927 Yankees starting lineup? If Presley, why not Buddy Holly, Ritchie Valens, and the Big Bopper? Why not every
member of the Rock & Roll Hall of Fame?
As for Ms. Adelson, while her philanthropic activities are admirable, they fall well
short of being unique. In fact, her selection to receive this presidential bauble stems less from Adelson's charitable
giving than from her marriage to a billionaire who donated $25 million to Donald Trump's 2016 presidential campaign
while kicking in another $113 million to support the Republican Party two years later. The Adelson Medal of Freedom was
bought and paid for many times over.
I do not mean to imply that Trump deserves principal blame for trivializing and
degrading the Medal of Freedom. On that score, primary credit goes to George W. Bush, who conferred this ostensibly
great distinction on three individuals who figured prominently in engineering the debacle of the Iraq war: former CIA
director George "Slam Dunk" Tenet, General Tommy Franks, and failed American viceroy L. Paul Bremer. Passing out laurels
to mediocrities who screw up: for evidence of the sense of entitlement that has come to pervade the American
establishment, one need look no further.
President Barack Obama's contribution to the Medal of Freedom's decline in status was
of a different order: he gave out medals like pieces of Halloween candy, his 123 being the most ever awarded by any
president. As any list of honorees becomes longer, it necessarily becomes less selective. So Ellen DeGeneres got one
from Obama, as did Ernie Banks, Michael Jordan, and basketball coach Dean Smith. All estimable individuals no doubt, but
arguably not what JFK had in mind when he instituted the Medal of Freedom in the first place.
Whatever modest value JFK's initiative may once have possessed has long since
dissipated. In the present moment, with Americans disagreeing vehemently as to what freedom requires, permits, or
prohibits, it just might be time to give the Medal of Freedom a rest. Let's figure out what freedom means. Then it may
once more become appropriate to honor those who exemplify it.
Andrew J. Bacevich is
TAC
's
writer at large. His new book
Twilight of the American Century
has just been published.
My reading is that the core psychological principle of neoliberalism, that life is an accumulation of moments of utility
and disutility, is alive and well within certain sectors of the "left". A speech (or email or comment at a meeting) should be
evaluated by how it makes us feel, and no one should have the right to make us feel bad.
Not sure about this "utility/disutility" dichotomy (probably you mean market fundamentalism -- belief that market ( and market
mechanisms) is a self regulating, supernaturally predictive force that will guide human beings to the neoliberal Heavens), but, yes,
neoliberalism infected the "left" and, especially, Democratic Party which was converted by Clinton into greedy and corrupt "DemoRats'
subservient to Wall Street and antagonistic to the trade unions. And into the second War Party, which in certain areas is even more
jingoistic and aggressive then Republicans (Obama color revolution in Ukraine is one example; Hillary Libya destruction is another;
both were instrumental in unleashing the civil war on Syria and importing and arming Muslim fundamentalists to fight it).
It might make sense to view neoliberalism as a new secular religion which displaced Marxism on the world arena (and collapse of
the USSR was in part the result of the collapse of Marxism as an ideology under onslaught of neoliberalism; although bribes of USSR
functionaries and mismanagement of the economy due to over centralization -- country as a single gigantic corporation -- also greatly
helped) .
Neoliberalism demonstrates the same level of intolerance (and actually series of wars somewhat similar to Crusades) as any monotheistic
religion in early stages of its development. Because at this stage any adept knows the truth and to believe in this truth is to be
saved; everything else is eternal damnation (aka living under "authoritarian regime" ;-) .
And so far there is nothing that will force the neoliberal/neocon Torquemadas to abandon their loaded with bombs jets as the tool
of enlightenment of pagan states ;-)
Simplifying, neoliberalism can be viewed an a masterfully crafted, internally consistent amalgam of myths and pseudo theories
(partially borrowed from Trotskyism) that justifies the rule of financial oligarchy and high level inequality in the society (redistribution
of the wealth up). Kind of Trotskyism for the rich with the same idea of Permanent Revolution until global victory of neoliberalism.
That's why neoliberals charlatans like Hayek and Friedman were dusted off, given Nobel Prizes and promoted to the top in economics:
they were very helpful and pretty skillful in forging neoliberal myths. Especially Hayek. A second rate economist who proved to be
the first class theologian .
Promoting "neoliberal salvation" was critical for the achieving the political victory of neoliberalism in late 1979th and discrediting
and destroying the remnants of the New Deal capitalism (already undermined at this time by the oil crisis)
Neoliberalism has led to the rise of corporate (especially financial oligarchy) power and an open war on labor. New Deal policies
aimed at full employment and job security have been replaced with ones that aim at flexibility in the form of unstable employment,
job loss and rising inequality.
This hypotheses helps to explain why neoliberalism as a social system survived after its ideology collapsed in 2008 -- it just
entered zombie stage like Bolshevism after WWII when it became clear that it can't achieve higher standard of living for the population
then capitalism.
Latest mutation of classic neoliberalism into "national neoliberalism" under Trump shows that it has great ability to adapt to
the changing conditions. And neoliberalism survived in Russia under Putin and Medvedev as well, despite economic rape that Western
neoliberals performed on Russia under Yeltsin with the help of Harvard mafia.
That's why despite widespread criticism, neoliberalism remains the dominant politico-economic theory amongst policy-makers both
in the USA and internationally. All key global neoliberal global institutions, such as the G20, European Union, IMF, World bank,
and WTO still survived intact and subscribe to neoliberalism. .
Neoliberalism has led to the rise of corporate (especially financial oligarchy) power and an open war on labor. New Deal policies
aimed at full employment and job security have been replaced with ones that aim at flexibility in the form of unstable employment,
job loss and rising inequality.
This hypotheses helps to explain why neoliberalism as a social system survived after its ideology collapsed in 2008 -- it just
entered zombie stage like Bolshevism after WWII when it became clear that it can't achieve higher standard of living for the population
then capitalism.
Latest mutation of classic neoliberalism into "national neoliberalism" under Trump shows that it has great ability to adapt to
the changing conditions.
that's why despite widespread criticism, neoliberalism remains the dominant politico-economic theory amongst policy-makers both
in the USA and internationally. All key global neoliberal global institutions, such as the G20, European Union, IMF, World bank,
and WTO still survived intact and subscribe to neoliberalism. .
...you may have missed weeks of debate on the Right over a reasonable comment made by
the popular Fox News host.
"Market capitalism is not a religion. Market capitalism is a tool, like a staple gun or a
toaster," Carlson said. "Any economic system that weakens and destroys families isn't worth
having." Does this observation make Tucker a socialist? Hardly. As is often the case,
TAC founding editor Patrick J. Buchanan was more than a decade ahead of the curve.
"To me, the country comes before the economy; and the economy exists for the people,"
Buchanan said in a 1998 speech to the Chicago Council on Foreign Relations. "I believe in free
markets, but I do not worship them. In the proper hierarchy of things, it is the market that
must be harnessed to work for man -- and not the other way around."
The free market thinks these questions of culture, family and social cohesiveness are cute
but ultimately irrelevant. Conservatives need to come to terms that global capital has no
mercy or care for its concerns and ultimate ends. You cant tax credit your way out of that
confrontation. City of God vs the city of man is still the battle.
It would have been nice if the Conservative Movement had started this "search for answers"
after the failure of the 2012 election where the Republican Party picked a vulture capitalist
as a Presidential nominee.
"... Media consolidation itself has played an enormous role in driving up the cost of political campaigns. How did we get to this second Gilded Age and what lessons can we infer regarding our democratic prospects? ..."
"... Notre Dame University 's Philip Mirowski Never Let a Serious Crisis G to Waste has provided a careful and detailed analysis of this neoliberal movement in American politics. ..."
"... Adam Smith and JS Mill saw markets as non-coercive means to allocate resources and produce goods and services. Neoliberals regarded markets as perfect information processing machines that could provide optimal solutions to all social problems ..."
"... Market is miraculous and a boon to many, but paradoxically only a strong state can assure its arrival and maintenance. Sometimes it may appear that the market is yielding iniquitous or unsustainable outcomes, which my lead to premature or disastrous rejection of its wisdom ..."
"... The neoliberal deification of markets has many parents. This mindset encouraged and was encouraged by a revolt against democracy. The wealthy had always been concerned that a propertyless working class might vote to expropriate them, but neoliberalism gave them further reason to bypass democracy. Markets were seen as better indicators of truth than democratic elections, though that point was seldom expressed as directly ..."
"... Here is FA Hayek's oblique expression of this concern: "if we proceed on the assumption that only the exercises of freedom that the majority will practice are important, we would be certain to create a stagnant society with all the characteristics of unfreedom." ..."
Why "free" why not "fair". Neoliberals are as dangerious as Big brother in 1994. Actually
neoliberal state is as close to Big Brother regine described in 1994. We have total
surveillance, with technological capabiltiies which probably exceed anything rulers of 1984
world possessed, Russiagate as "hour of anger", permanent war for permanent people (and total
victory of "democracy") , and of course "[neoliberal] freedom is [debt[ slavery..." in
neoliberal MSM.
Fast forward from one Gilded Age to another. Citizens United, granting unions and
corporations the right to spend unlimited amounts of money to advocate for and against
political candidates, is often regarded as a singularly dangerous challenge to our democratic
norms, especially with its infamous assertion that money is speech. Less attention, however,
is pad to the context in which this decision occurred, including corporate consolidation in
most sectors of the economy, obscene levels of economic inequality, and near religious
reverence for deregulated markets.
Media consolidation itself has played an enormous role in
driving up the cost of political campaigns. How did we get to this second Gilded Age and what
lessons can we infer regarding our democratic prospects?
The post World War II decades saw white working class gains in income made possible by
unionization, the GI bill, and a federal commitment to full employment. Positive as these
gains were, they carried with them unintended consequences. Workers and employers, having
less fear of depression, periodically drove wages and prices up.
Bursts of inflation and an
unprecedented profit squeeze led to unemployment even in the midst of inflation, an
unprecedented and unexpected circumstance. Blacks had been left out of the full benefits of
the New Deal welfare state and raised demands not only for political equality but also for
economic opportunity, one of Reconstruction's forgotten promises.
These events provided an opening for a group of academics who had long despised the New
Deal welfare state. Notre Dame University 's Philip Mirowski Never Let a Serious Crisis G to
Waste has provided a careful and detailed analysis of this neoliberal movement in American
politics.
These neoliberals shared with their nineteenth- century predecessors a faith in markets,
but with an important difference. Adam Smith and JS Mill saw markets as non-coercive means to
allocate resources and produce goods and services. Neoliberals regarded markets as perfect
information processing machines that could provide optimal solutions to all social problems.
Hence a commitment not only to lift rent control on housing but also to privatize prisons,
water and sewer systems, and to deregulate all aspects of personal finance and treat
education and health care as commodities to be pursued on unregulated markets. An essential
part of this faith in markets is the post Reagan view of corporate consolidation.
Combinations are to be judged only on the basis of cheap products to the consumer.
Older
antitrust concerns about worker welfare or threat to democracy itself are put aside.
Corporate mergers and the emergence of monopoly are seen as reflections of the omniscient
market. In practice, however as we shall see, such a tolerant attitude is not applied to
worker associations.
Neoliberals differ from their classical predecessors in a second important way. Market is
miraculous and a boon to many, but paradoxically only a strong state can assure its arrival
and maintenance. Sometimes it may appear that the market is yielding iniquitous or
unsustainable outcomes, which my lead to premature or disastrous rejection of its wisdom. The
answer to this anger is more markets, but that requires a strong state staffed by
neoliberals. They would have the capacity and authority to enact and impose these markets and
distract the electorate and divert them into more harmless pursuits. Recognition of the need
for a powerful state stands in partial contradiction to the neoliberal's professed
deification of pure markets and was seldom presented to public gatherings. As Mirowski put
it, neoliberals operated on the basis of a dual truth, an esoteric truth for its top scholars
and theorists and an exoteric version for then public. Celebration of the spontaneous market
was good enough for Fox News, whereas top neoliberal scholars discussed how to reengineer
government in order to recast society.
The signs of neoliberalism are all around us. Worried about student debt? There is a
widely advertised financial institution that will refinance your loan. Trapped in prison with
no money for bail. There are corporations and products that will take care of that. Cancer
cures, money for funerals and burial expenses can all be obtained via the market. Any problem
the market creates the market can solve. The implications of this view have been ominous for
democracy and social justice.
The neoliberal deification of markets has many parents. This mindset encouraged and was
encouraged by a revolt against democracy. The wealthy had always been concerned that a
propertyless working class might vote to expropriate them, but neoliberalism gave them
further reason to bypass democracy. Markets were seen as better indicators of truth than
democratic elections, though that point was seldom expressed as directly.
Here is FA Hayek's
oblique expression of this concern: "if we proceed on the assumption that only the exercises
of freedom that the majority will practice are important, we would be certain to create a
stagnant society with all the characteristics of unfreedom."
The revolt against democracy has occurred on several different levels of the political
process. The question of who can vote is just as contested as during Reconstruction, and not
just in the South. As during Reconstruction, it does not take the form of explicit racial
appeals. The strategy includes further limiting the time polls are open, reduction in the
number of polling places, voter identification cards that take time and money to obtain. Who
can vote is also a function of the racist legacy of our history, with prohibitions on voting
by felons serving to exclude large numbers of potential voters, disproportionately
minorities. It should be mentioned more than it is that these techniques also work to the
disadvantage of poor whites. Political scientists Walter Dean Burnham and Thomas Ferguson
point out: "In Georgia in 1942, for example, turnout topped out at 3.4 percent (that's right,
3.4 percent; no misprint). Why is no mystery: the Jim Crow system pushed virtually all
African-Americans out of the system, while the network of poll taxes, registration
requirements, literacy tests and other obstacles that was part of that locked out most poor
whites from voting, too. Since the civil rights revolution, turnouts in the South have risen
fitfully to national levels, amid much pushback, such as the raft of new voter ID
requirements (though these are not limited to the South)."
Minorities, poor, and even substantial segments of the working class are further
disadvantaged by efforts to defund the labor opposition. Unions have been the one big money
source that Democrats had available, but as the party from Bill Clinton on increasingly
became a kind of neoliberalism light, embracing corporate trade agreements with a little bit
of job training assistance thrown in, unions lost members, many corporations forced
decertification elections. Democrats lost not only financial resources but also the ground
troops that had mobilized their voters.
One result of and partial driving force behind these changes is that both parties become
big money parties. Burnham and Ferguson-( December 2014)- The President and the Democratic
Party are almost as dependent on big money – defined, for example, in terms of the
percentage of contributions (over $500 or $1000) from the 1 percent as the Republicans. To
expect top down money-driven political parties to make strong economic appeals to voters is
idle. Instead the Golden Rule dominates: Money-driven parties emphasize appeals to particular
interest groups instead of the broad interests of working Americans that would lead their
donors to shut their wallets.
As David Stockman, President Reagan's Budget Director once all but confessed,
"in the
modern era the party has never really pretended to have much of a mass constituency. It wins
elections by rolling up huge percentages of votes in the most affluent classes while seeking
to divide middle and working class voters with various special appeals and striving to hold
down voting by minorities and the poor."
Challenging this bipartisan money driven establishment becomes even more difficult as
state level ballot access laws are notoriously hostile to third parties. Add to this the
private, deceptively named Presidential Debate Commission, which specializes in depriving
even candidates about whom large segment s of the population are curious access to the widely
watched debates. Unfortunately the celebrated voting reform proposal, HR1, though containing
some democratic initiatives such as early voting and automatic voter registration, makes it
own contribution to economic and political consolidation.
Bruce Dixon, editor of Black Agenda
Report, maintains that only two provisions of this bill are likely to become law and both are
destructive: "by raising the qualifying amount from its current level of $5,000 in each of 20
states to $25,000 in 20 states. HR 1 would cut funding for a Green presidential candidate in
half, and by making ballot access for a Green presidential candidate impossible in several
states it would also guarantee loss of the party's ability to run for local offices." Dixon
also predicts that some Democrats "will cheerfully cross the aisle to institutionalize the
Pentagon, spies and cops to produce an annual report on the threat to electoral security.
Dixon maintains:
"Democrats are a capitalist party, they are a government party, and this
is how they govern. HR 1 reaches back a hundred years into the Democrat playbook politicians
created a foreign menace to herd the population into World War 1, which ended in the Red
Scare and a couple of red summers, waves of official and unofficial violence and deportations
against US leftists and against black people. The Red Scare led to the founding of the FBI,
the core of the nation's permanent political police . Fifty years ago these were the same
civil servants who gave us the assassinations, the disinformation and illegality of
COINTELPRO, and much, much more before that and since then. HR 1 says let's go to the
Pentagon and the cops, let's order them to discover threats to the electoral system posed by
Americans working to save themselves and the planet."
Dixon is surely right that both parties are capitalist parties, but capitalism itself has
taken different forms. New Deal and neoliberal capitalism had far different implications for
working class Americans. The New Deal itself was heavily influenced by Norman Thomas and the
socialist tradition. In this regard, if what Paul Wellstone used to call the democratic wing
of the Democratic Party wishes to see its ideals translated into practice, it must resist
efforts to exclude third parties or to deny primary opponents an even playing field.
I am not claiming that there has been a carefully coordinated conspiracy among the
individuals and groups that supported these policies, but leaders did act out of a general
animus toward popular movements that further reinforced their reverence for corporate
markets, and the faith in markets drove the worries about popular movements.
One positive conclusion to be drawn is that if this attack on democracy exists on several
levels, activism might be fruitful in many domains and may have a spillover effect. Unions
are still not dead, and there is a fight now for the soul of the Democratic Party and that
fight might stimulate voter access and eligibility reforms. These in turn could reshape the
party's orientation and ideology. Even at the Federal level Dark money is worrisome to many
voters and could be an incentive to mobilize for better disclosure laws. There are ample
fronts on which to fight and good reason to keep up the struggle.
Yves here. This post focuses on an important slice of history in what "freedom" has meant in
political discourse in the US. But I wish it had at least mentioned how a well-funded, then
extreme right wing effort launched an open-ended campaign to render US values more friendly to
business. They explicitly sought to undo New Deal programs and weaken or end other social
safety nets. Nixon Supreme Court Justice Lewis Powell codified the strategy for this initiative
in the so-called Powell Memo of 1971.
One of the most effective spokesmen for this libertarian program was Milton Friedman, whose
bestseller Free to Choose became the foundation for a ten-part TV series.
America is having a heated debate about the meaning of the word socialism . We'd be
better served if, instead, we were debating the meaning of freedom .
The
Oregonian reported last week that fully 156,000 families are on the edge of homelessness in
our small-population state. Every one of those households is now paying more than 50 percent of
its monthly income on rent, and none of them has any savings; one medical bill, major car repair
or job loss, and they're on the streets.
While socialism may or may not solve their problem, the more pressing issue we have is an
entire political party and a huge sector of the billionaire class who see homelessness not as a
problem, but as a symptom of a "free" society.
The words freedom and liberty are iconic in American culture -- probably more so than with
any other nation because they're so intrinsic to the literature, declarations and slogans of our
nation's founding.
The irony -- of the nation founded on the world's greatest known genocide (the systematic
state murder of tens of millions of Native Americans) and over three centuries of legalized
slavery and a century and a half of oppression and exploitation of the descendants of those
slaves -- is extraordinary. It presses us all to bring true freedom and liberty to all
Americans.
But what do those words mean?
If you ask the Koch brothers and their buddies -- who slap those words on pretty much
everything they do -- you'd get a definition that largely has to do with being "free" from
taxation and regulation. And, truth be told, if you're morbidly rich, that makes a certain amount
of sense, particularly if your main goal is to get richer and richer, regardless of your
behavior's impact on working-class people, the environment, or the ability of government to
function.
On the other hand, the definition of freedom and liberty that's been embraced by so-called
"democratic socialist" countries -- from Canada to almost all of Europe to Japan and Australia --
you'd hear a definition that's closer to that articulated by Franklin D. Roosevelt when he
proposed, in January 1944, a " second Bill
of Rights " to be added to our Constitution.
FDR's proposed amendments included the right to a job, and the right to be paid enough to
live comfortably; the right to "adequate food and clothing and recreation"; the right to start a
business and run it without worrying about "unfair competition and domination by monopolies"; the
right "of every family to a decent home"; the right to "adequate medical care to achieve and
enjoy good health"; the right to government-based "protection from the economic fears of old age,
sickness, accident, and unemployment"; and the right "to a good education."
Roosevelt pointed out that, "All of these rights spell security." He added, "America's own
rightful place in the world depends in large part upon how fully these and similar rights have
been carried into practice for our citizens. For unless there is security here at home there
cannot be lasting peace in the world."
The other nations mentioned earlier took President Roosevelt's advice to heart. Progressive
"social democracy" has kept Europe, Canada, and the developed nations of the East and South
Pacific free of war for almost a century -- a mind-boggling feat when considering the history of
the developed world since the 1500s.
Just prior to FDR winning the White House in the election of 1932, the nation had been
treated to 12 years of a bizarre Republican administration that was the model for today's GOP. In
1920, Warren Harding won the presidency on a campaign of "more industry in government, less
government in industry" -- privatize and deregulate -- and a promise to drop the top tax rate of
91 percent down to 25 percent.
He kept both promises, putting the nation into a sugar-high spin called the Roaring '20s,
where the rich got fabulously rich and working-class people were being beaten and murdered by
industrialists when they tried to unionize. Harding, Coolidge, and Hoover (the three Republican
presidents from 1920 to 1932) all cheered on the assaults, using phrases like "the right to work"
to describe a union-free nation.
In the end, the result of the "
horses and sparrows " economics advocated by Harding ("feed more oats to the horses and
there'll be more oats in the horse poop to fatten the sparrows" -- that generation's version of
trickle-down economics) was the Republican Great Depression (yes, they called it that until after
World War II).
Even though Roosevelt was fabulously popular -- the only president to be elected four times --
the right-wingers of his day were loud and outspoken in their protests of what they called
"socialist" programs like Social Security, the right to unionize, and government-guaranteed job
programs including the WPA, REA, CCC, and others.
The Klan and American Nazis were assembling by the hundreds of thousands nationwide -- nearly
30,000 in Madison Square Garden
alone -- encouraged by wealthy and powerful "economic royalists" preaching "freedom" and "
liberty ." Like the Kochs' Freedomworks , that generation's huge and well-funded
(principally by the DuPonts' chemical fortune) organization was the Liberty League .
Roosevelt's generation had seen the results of this kind of hard-right "freedom" rhetoric in
Italy, Spain, Japan and Germany, the very nations with which we were then at war.
Speaking of "the grave dangers of 'rightist reaction' in this Nation," Roosevelt told America in that same speech that: "[I]f
history were to repeat itself and we were to return to the so-called 'normalcy' of the 1920s --
then it is certain that even though we shall have conquered our enemies on the battlefields
abroad, we shall have yielded to the spirit of Fascism here at home."
Although right-wingers are still working hard to disassemble FDR's New Deal -- the GOP budget
for 2019 contains massive cuts to Social Security, as well as to Medicare and Medicaid -- we got
halfway toward his notion of freedom and liberty here in the United States:
You're not free if
you're old and deep in poverty, so we have Social Security (although the GOP wants to gut it).
You're not free if you're hungry, so we have food stamps/SNAP (although the GOP wants to gut
them). You're not free if you're homeless, so we have housing assistance and homeless shelters
(although the GOP fights every effort to help homeless people). You're not free if you're sick
and can't get medical care, so we have Medicare, Medicaid, and Obamacare (although the GOP wants
to gut them all). You're not free if you're working more than 40 hours a week and still can't
meet basic expenses, so we have minimum wage laws and the right to unionize (although the GOP
wants to gut both). You're not free if you can't read, so we have free public schools (although
the GOP is actively working to gut them). You're not free if you can't vote, so we've passed
numerous laws to guarantee the right to vote (although the GOP is doing everything it can to keep
tens of millions of Americans from voting).
The billionaire class and their wholly owned Republican politicians keep trying to tell us
that "freedom" means the government doesn't provide any of the things listed above.
Instead, they tell us (as Ron Paul famously did in a GOP primary debate years ago) that, if we're
broke and sick, we're "free" to die like a feral dog in the gutter.
Freedom is homelessness, in the minds of the billionaires who own the GOP.
Poverty, lack of education, no access to health care, poor-paying jobs, and barriers to voting
are all proof of a free society, they tell us, which is why America's lowest life expectancy,
highest maternal and childhood death rates, lowest levels of education, and lowest pay
are almost all in GOP-controlled states .
America -- particularly the Democratic Party -- is engaged in a debate right now about the
meaning of socialism . It would be a big help for all of us if we were, instead, to have
an honest debate about the meaning of the words freedom and liberty .
Let us not forget the other propaganda arm of Republican party and big money- Fox news. They
spew the freedom nonsense while not adhering to any definition of the word.
I worked in the midwest as an Engineer in the 90s to early 2000s and saw plants being
gutted/shifted overseas, Union influence curtailed and mid level and bottom pay stay flat for
decades; all in the name of free market.
Sadly the same families that are the worst affected vote Republican! But we know all this
and have known it for a while. What will change?
The intro to this post is spot on. The Powell memo outlined a strategy for a corporate
coup d'eta. Is was completely successful. Now that the business class rules America, their only
vision is to continue the quest and cannibalize the country and enslave its people by any means
possible. What tools do they use to achieve these ends? -- debt, fear, violence and pandering
to human vanity as a motivator. Again, very successful.
Instead of honest public debate- which is impossible when undertaken with liars and thieves,
a good old manifesto or pamphlet like Common Sense is in order. Something calling out concrete
action that can be taken by commoners to regain their social respect and power. That should
scare the living daylights out of the complacent and smug elite.
Its that, or a lot of public infrastructure is gong to be broken up by the mob- which
doesn't work out in the long run. The nations that learn to work with and inspire their
populations will prosper- the rest will have a hard time of it. Look no further than America's
fall.
This piece raises some important points, but aims too narrowly at one political party,
when the D-party has also been complicit in sharing the framing of "freedom" as less
government/regulation/taxation. After all, it was the Clinton administration that did welfare
"reform", deregulation of finance, and declared the end of the era of "big government", and
both Clinton and Obama showed willingness to cut Social Security and Medicare in a "grand
bargain".
If in place of "the GOP," the author had written, "The national Democratic and Republican
parties over the past fifty years," his claim would be much more accurate. To believe what he
says about "the GOP," you have to pretend that Clinton, and Obama, and Pelosi, and Schumer, and
Feinstein simply don't exist and never did. The author's implicit valorization of Obamacare is
even more disheartening.
But perhaps this is the *point* of the piece after all? If I were a consultant to the DNC
(and I make less than $100,000/yr so I am clearly not), I would advocate that they commission,
underscore, and reward pieces exactly like this one. For the smartest ones surely grasp that
the rightist oligarchic policy takeover has in fact happened, and that it has left in its wake
millions of disaffected, indebted, uneducated, uninsured Americans.
(Suggesting that it hadn't was the worst idiocy of Clinton's 2016 campaign. It would have
been much better had she admitted it and blamed it on the Republican Senate while holding dear
old Obama up as a hamstrung martyr for the cause. I mean, this is what everybody at DailyKos
already believes, and the masses -- being poor and uneducated and desperate -- can be brought
around to believe anything, or anyway, enough of them can be.)
I would advocate that the DNC double down on its rightful claims to Roosevelt's inheritance,
embrace phrases like "social democracy" and "freedom from economic insecurity," and shift
leftward in all its official rhetoric. Admit the evisceration of the Roosevelt tradition, but
blame it all on the GOP. Maybe *maybe* even acknowledge that past Democratic leaders were a
little naive and idealistic in their pursuit of bipartisanship, and did not understand the
truly horrible intentions of the GOP. But today's Democrats are committed to wresting back the
rights of the people from the evil clutches of the Koch Republicans. This sort of thing.
Would my advice be followed? Or would the *really* smart ones in the room demure? If so, why
do you think they would?
In short, I read this piece as one stage in an ongoing dialectic in the Democratic Party in
the run-up to the 2020 election wherein party leaders try to determine how leftward its
"official" rhetoric is able to sway before becoming *so* unbelievable (in light of historical
facts) that it cannot serve as effective propaganda -- even among Americans!
Team Blue elites are the children of Bill Clinton and the Third Way, so the echo chamber was
probably terrible. Was Bill Clinton a bad President? He was the greatest Republican President!
The perception of this answer is a key. Who rose and joined Team Blue through this run? Many
Democrats don't recognize this, or they don't want to rock the boat. This is the structural
problem with Team Blue. The "generic Democrat" is AOC, Omar, Sanders, Warren, and a handful of
others.
Can the Team Blue elites embrace a Roosevelt identity? The answer is no. Their ideology is
so wildly divergent they can't adjust without a whole sale conversion.
More succinctly, the Third Way isn't about helping Democrats win by accepting not every
battle can be won. Its about advancing right wing politics and pretending this isn't what its
about. If they are too clear about good policy, they will be accused of betrayal.
This article makes me wonder if the GOP is still a political party anymore. I know, I know,
they have the party structure, the candidates, the budget and all the rest of it but when you
look at their policies and what they are trying to do, the question does arise. Are they doing
it because this is what they believe is their identity as a party or is it that they are simply
a vehicle with the billionaires doing the real driving and recruiting? An obvious point is that
among billionaires, they see no need to form their own political party which should be telling
clue. Certainly the Democrats are no better.
Maybe the question that American should ask themselves is just what does it mean to be an
American in the year 2020? People like Norman Rockwell and his Four Freedoms could have said a
lot of what it meant some 60 years ago and his work has been updated to reflect the modern era
( https://www.galeriemagazine.com/norman-rockwell-four-freedoms-modern/
) but the long and the short of it is that things are no longer working for most people anymore
-- and not just in America. But a powerful spring can only be pushed back and held in place for
so long before there is a rebound effect and I believe that I am seeing signs of this the past
few years.
" a second Bill of Rights under which a new basis of security and prosperity can be
established for all -- regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries or shops or farms or mines of
the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and
his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from
unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and
unemployment;
The right to a good education.
All of these rights spell security."
America is having a heated debate about the meaning of the word socialism. We'd be better
served if, instead, we were debating the meaning of freedom.
I agree, and we should also be having a debate about capitalism as it actually exists. In
the US capitalism is always talked about in rosy non-specific terms (e.g. a preference for
markets or support for entrepreneurship) while anybody who says they don't necessarily support
capitalism has to answer for Stalin's gulag's or the Khmer Rouge. All the inequalities and
injustices that have helped people like Howard Schultz or Jeff Bezos become billionaire
capitalists somehow aren't part of capitalism, just different problems to be solved somehow but
definitely not by questioning capitalism.
Last night I watched the HBO documentary on Elizabeth Holmes and Theranos and I couldn't
help but laugh at all these powerful politicians, investors, and legal giants going along with
someone who never once demonstrated or even explained how her groundbreaking innovation
actually worked. $900 million was poured into that company before people realized something
that a Stanford professor interviewed in the documentary saw when she first met Holmes.
Fracking companies have been able to consistently raise funding despite consistently losing
money and destroying the environment in the process. Bank balance sheets were protected while
working people lost everything in the name of preserving American capitalism. I think it's good
to debate socialism and capitalism, but there's not really any point if we aren't going to be
talking about Actually Existing Capitalism rather than the hypothetical version that's trotted
out anytime someone suggests an alternative.
There was a great comment here on NC a little while ago, something to the effect of
"capitalism has the logic of a cancer cell. It's a pile of money whose only goal is to become a
bigger pile of money." Of course good things can happen as a side effect of it becoming a
bigger pile of money: innovation, efficiencies, improved standard of living, etc. but we need
government (not industry) regulation to keep the bad side effects of capitalism in check (like
the cancer eventually killing its host).
Shoot, must have missed that comment but it's a good metaphor. Reminds me of Capital vol. 1,
which Marx starts with a long and dense treatment of the nature of commodities and
commodification in order to capture this process whereby capitalists produce things people
really do want or need in order to get at what they really want: return on their
investment.
I also agree but I think we need to have a the same heated debate over what capitalism
means. Over the years I have been subjected to (exposed) to more flavors of socialism than I
can count. Yet, other than an introductory economics class way back when, no debatable words
about what 'capitalism' is seems to get attention. Maybe it's time to do that and hope that
some agreeable definition of 'freedom' falls out.
of course maybe socialism is the only thing that ever really could solve homelessness, given
that it seems to be at this point a worldwide problem, although better some places than others
(like the U.S. and UK).
This article lets the Dems off the hook. They have actively supported the Billionaire
Agenda for decades now; sometimes actively (like when they helped gut welfare) and sometimes by
enabling Repubs objectives (like voter suppression).
At this point in time, the Dem leadership is working to deep six Medicare for All.
With 'friends' like the Dems, who needs the Repubs?
1) In the history, a mention of the attempted coup against FDR would be good. See The
Plot to Seize the White House by Jules Archer. ( Amazon link )
2) For the contemporary intellectual history, I really appreciated Nancy MacLean's
Democracy in Chains . ( Amazon
link ) Look her up on youtube or Democracy Now . Her book got a bit of press and she
interviews well.
This post seems heavily slanted against the GOP and does not take into account how
pro-business the Democrats have become. I tenuously agree with Yves intro that much of the
current pro business value system campaign in the US was started with the political far right
and the Lewis Powell Memo. And that campaign kicked into high gear during the Reagan
Presidency.
But as that "pro business campaign" gained steam, the Democratic Party, IMO, realized that
they could partake in the "riches" as well and sold their political soul for a piece of the
action. Hartman's quote about the billionaire class should include their "wholly owned
Republicans and Democrat politicians".
As Lambert mentions (paraphrasing), "The left puts the working class first. Both liberals
and conservatives put markets first, liberals with many more layers of indirection (e.g.,
complex eligibility requirements, credentialing) because that creates niches from which their
professional base benefits".
As an aside, while the pro-business/capitalism on steroids people have sought more
"freedom", they have made the US and the world less free for the rest of us.
Also the over focusing on freedom is not uniquely GOP. As Hartman mentions, "the words
freedom and liberty are iconic in American culture -- probably more so than with any other
nation because they're so intrinsic to the literature, declarations and slogans of our nation's
founding." US culture has taken the concept of freedom to an extreme version of
individualism.
That is not surprising given our history.
The DRD4 gene is a dopamine receptor gene. One stretch of the gene is repeated a variable
number of times, and the version with seven repeats (the "7R" form) produces a receptor protein
that is relatively unresponsive to dopamine. Being unresponsive to dopamine means that people
who have this gene have a host of related traits -- sensation and novelty seeking, risk taking,
impulsivity, and, probably most consistently, ADHD. -- -- Seems like the type of people that
would value extreme (i.e. non-collective) forms of freedom
The United States is the individualism poster child for at least two reasons. First
there's immigration. Currently, 12 percent of Americans are immigrants, another 12 percent are
children of immigrants, and everyone else except for the 0.9 percent pure Native Americans
descend from people who emigrated within the last five hundred years.
And who were the immigrants?' Those in the settled world who were cranks, malcontents,
restless, heretical, black sheep, hyperactive, hypomanic, misanthropic, itchy, unconventional,
yearning to be free, yearning to be rich, yearning to be out of their, damn boring repressive
little hamlet, yearning. -- -- Again seems like the type of people that would value freedom in
all aspects of life and not be interested in collectivism
Couple that with the second reason -- for the majority of its colonial and independent
history, America has had a moving frontier luring those whose extreme prickly optimism made
merely booking passage to the New World insufficiently, novel -- and you've got America the
individualistic.
The 7R variant mentioned above occurs in about 23 percent of Europeans and European
Americans. And in East Asians? 1 percent. When East Asians domesticated rice and invented
collectivist society, there was massive selection against the 7R variant. Regardless of the
cause, East Asian cultural collectivism coevolved with selection against the 7R variant.
So which came first, 7R frequency or cultural style? The 4R and 7R variants, along with the
2R, occur worldwide, implying they already existed when humans radiated out of Africa 60,000 to
130,000 years ago. A high incidence of 7R, associated with impulsivity and novelty seeking, is
the legacy of humans who made the greatest migrations in human history.
So it seems that many of the people who immigrated to the US were impulsive, novelty
seeking, risk takers. As a counterpoint, many people that migrated to the US did not do so by
choice but were forced from their homes and their countries by wars.
The point of this long comment is that for some people the concept of freedom can be taken
to extreme -- a lack of gun control laws, financial regulation, extremes of wealth, etc. After
a brief period in the 1940's, 1950's, and early 1960's when the US was more collective, we
became greedy, consumerist, and consumption oriented, aided by the political and business
elites as mentioned in the post.
If we want the US to be a more collective society we have to initially do so in our
behaviors i.e. laws and regulations that rein in the people who would take the concept of
freedom to an extreme. Then maybe over an evolutionary time period some of the move impulsive,
sensation seeking, ADHDness, genes can be altered to a more balance mix of what makes the US
great with more of the collective genes.
IMO, if we do not begin to work on becoming a collective culture now, then climate change,
water scarcity, food scarcity, and resource scarcity will do it for us the hard way.
In these days of short attention spans I apologize for the long comment. The rest of my day
is busy and I do not have more time to shorten the comment. I wanted to develop an argument for
how the evolutionary and dysfunctional forms of freedom have gotten us to this point. And what
we need to do to still have some freedom but also "play nice and share in the future sandbox of
climate change and post fossil fuel society.
Don't the people pulling the strings behind the media understand what they have done?
They have convinced a large part of the nation that everything that they were taught from
childhood is a fraud.
Civilizations are only held together by the "glue" of shared beliefs. The
deep-state-media-complex has just applied a solvent to the very glue that holds the entire
culture together.
And Hopkins says a disillusioned people might realize
in reality they are living in a neo-feudalist, de facto global capitalist empire
administrated by omnicidal money-worshipping human parasites that won't be satisfied until
they've remade the whole of creation in their nihilistic image.
There has been a longstanding bipartisan attack against the nation, and I use that term as
defined as "a stable, historically developed community of people with a territory, economic
life, distinctive culture, and language in common."
But I don't think the "deep-state-media-complex" is concerned by this. Again, feature not
bug.
@Digital Samizdat
Excellent intelligence. As opposed to the "high IQ" idiocy promulgated on here.
You may like the way an acquaintance, a PhD from Chicago School of Business, who had just
finished working on a project for Big Pharma, observed when I brought up the concept of "free
market."
"'Free market?!'" he exclaimed. "No such thing. Because it's all crooked."
"... This is the behavior of a media class that is interested in selling narratives, not reporting truth. And yet the mass media talking heads are all telling us today that we must continue to trust them. ..."
"... More accountability in media than in politics, Chuck? Really? Accountability to whom? Your advertisers? Your plutocratic owners? Certainly not to the people whose minds you are paid exorbitant sums to influence; there are no public elections for the leadership of the mass media. ..."
"... CNN, for the record, has been guilty of an arguably even more embarrassing Russiagate flub than Buzzfeed 's when they wrongly reported that Donald Trump Jr had had access to WikiLeaks' DNC email archives prior to their 2016 publication, an error that was hilariously due to to the simple misreading of an email date by multiple people ..."
"... The mass media, including pro-Trump mass media like Fox News, absolutely deserves to be distrusted. It has earned that distrust. It had earned that distrust already with its constant promotion of imperialist wars and an oligarch-friendly status quo, and it has earned it even more with its frenzied promotion of a narrative engineered to manufacture consent for a preexisting agenda to shove Russia off the world stage. ..."
"... The mainstream media absolutely is the enemy of the people; just because Trump says it doesn't mean it's not true. The only reason people don't rise up and use the power of their numbers to force the much-needed changes that need to happen in our world is because they are being propagandized to accept the status quo day in and day out by the mass media's endless cultural engineering project . ..."
"... They are the reason why wars go unopposed, why third parties never gain traction, why people consent to money hemorrhaging upward to the wealthiest of the wealthy while everyone else struggles to survive. The sooner people wake up from the perverse narrative matrix of the plutocratic media, the better. ..."
Following what the Washington Post
has described as "the highest-profile misstep yet for a news organization during a period
of heightened and intense scrutiny of the press," mass media representatives are now flailing
desperately for an argument as to why people should continue to place their trust in mainstream
news outlets.
On Thursday Buzzfeed News delivered
the latest "bombshell" Russiagate report to fizzle within 24 hours of its publication, a
pattern that is now so consistent that I've personally made a practice of declining to comment
on such stories until a day or two after their release. "BOOM!" tweets were issued by
#Resistance pundits on Twitter, "If true this means X, Y and Z" bloviations were made on mass
media punditry panels, and for about 20 hours Russiagaters everywhere were riding the high of
their lives, giddy with the news that President Trump had committed an impeachable felony by
ordering Michael Cohen to lie to Congress about a proposed Trump office tower in Moscow, a
proposal which died within weeks
and the Kremlin never touched .
There was reason enough already for any reasonable person to refrain from frenzied
celebration, including the fact that the story's two authors, Jason Leopold and Anthony
Cormier, were giving the press two very different accounts of
the information they'd based it on, with Cormier telling CNN that he had not personally seen
the evidence underlying his report and Leopold telling MSNBC that he had. Both Leopold and
Cormier, for the record, have already previously suffered a
Russiagate faceplant with the clickbait viral story that Russia had financed the 2016
election, burying the fact that it was a Russian election .
Then the entire story came crashing down when Mueller's office took the extremely rare step
of issuing an
unequivocal statement that the Buzzfeed story was wrong , writing simply, "BuzzFeed's
description of specific statements to the special counsel's office, and characterization of
documents and testimony obtained by this office, regarding Michael Cohen's congressional
testimony are not accurate."
According to journalist and economic analyst Doug Henwood, the print New York Times covered
the Buzzfeed report on its front page when the story broke, but the report on Mueller's
correction the next day was shoved back to page 11 .
This appalling journalistic malpractice makes it very funny that NYT's Wajahat Ali had the gall
to tweet , "Unlike the Trump
administration, journalists are fact checking and willing to correct the record if the Buzzfeed
story is found inaccurate. Not really the actions of a deep state and enemy of the people,
right?"
This is the behavior of a media class that is interested in selling narratives, not
reporting truth. And yet the mass media talking heads are all telling us today that we must
continue to trust them.
"Those trying to tar all media today aren't interested in improving journalism but
protecting themselves," tweeted NBC's Chuck Todd.
"There's a lot more accountability in media these days than in our politics. We know we
live in a glass house, we hope the folks we cover are as self aware."
More accountability in media than in politics, Chuck? Really? Accountability to whom? Your
advertisers? Your plutocratic owners? Certainly not to the people whose minds you are paid
exorbitant sums to influence; there are no public elections for the leadership of the mass
media.
"Mueller didn't do the media any favors tonight, and he did do the president one,"
griped
the odious Chris Cuomo on CNN. "Because as you saw with Rudy Giuliani and as I'm sure
you'll see with the president himself, this allows them to say 'You can't believe it! You can't
believe what you read, you can't believe what you hear! You can only believe us. Even the
Special Counsel says that the media doesn't get it right.'"
"The larger message that a lot of people are going to take from this story is that the
news media are a bunch of leftist liars who are dying to get the president, and they're
willing to lie to do it, and I don't think that's true" said Jeffrey Toobin on a CNN panel , adding "I
just think this is a bad day for us."
"It does reinforce bad stereotypes about the news media," said Brian Stelter on the same CNN
panel.
"I am desperate as a media reporter to always say to the audience, judge folks
individually and judge brands individually. Don't fall for what these politicians out there
want you to do. They want you to think we're all crooked. We're not. But Buzzfeed now, now
the onus is on Buzzfeed. "
CNN, for the record, has been guilty of an arguably
even more embarrassing Russiagate flub than Buzzfeed 's when they wrongly reported that
Donald Trump Jr had had access to WikiLeaks' DNC email archives prior to their 2016
publication, an error that was hilariously due to to the simple misreading of an email date by
multiple people.
The mass media, including pro-Trump mass media like Fox News, absolutely deserves to be
distrusted. It has earned that distrust. It had earned that distrust already with its constant
promotion of imperialist wars and an oligarch-friendly status quo, and it has earned it even
more with its frenzied promotion of a narrative engineered to manufacture consent for a
preexisting agenda to shove Russia off the world stage.
The mainstream media absolutely is the enemy of the people; just because Trump says it
doesn't mean it's not true. The only reason people don't rise up and use the power of their
numbers to force the much-needed changes that need to happen in our world is because they are
being propagandized to accept the status quo day in and day out by the mass media's endless
cultural engineering project .
They are the reason why wars go unopposed, why third parties
never gain traction, why people consent to money hemorrhaging upward to the wealthiest of the
wealthy while everyone else struggles to survive. The sooner people wake up from the perverse
narrative matrix of the plutocratic media, the better.
"... You can take this to the bank. Hardcore Russiagaters will never give up their belief in collusion and Russian influence in the 2016 campaign -- never. Congress and Mueller will be accused of engaging in a coverup. ..."
"... Thus, even if the Mueller report is underwhelming, I think that the Democrats and TDS-saturated Trump opponents will attempt to rehabilitate it by pretending that it contains important loose ends that need to be pursued. In other words, to perpetuate the Mueller-driven political Russophobia by all other available means. ..."
"... Russiagate has exposed the great degree of corruption within the Justice Department bureaucracy, particularly within FBI, and within the entire Democrat Party. ..."
"... Since this is obviously not going to be allowed to happen, and since these people get away with everything, expect this to never end, despite all evidence to the contrary. It doesn't matter if they've been exposed as CIA propagandists or Integrity Initiative stooges, the game goes on...and on.... the job security of these disgraced columnists is the greatest in the Western world. ..."
"... Stephen Cohen discusses how rational viewpoints are banned from the mainstream media, and how several features of US life today resemble some of the worst features of the Soviet system. https://www.counterpunch.org/2019/02/12/stephen-cohen-on-war-with-russia-and-soviet-style-censorship-in-the-us/ ..."
"... The US needs an enemy, how else can they ask NATO members to cough up 2% of GDP [just for one example Germany's GDP is nearly 4 Trillion dollars [2017] for defence spending, what a crazy sum all NATO members must fork out to please the US, but then most of that money must be spent on the US MIC 'interoperability' of course. ..."
"... Another great damage of Russiagate was the instigating of a nuclear arms race directed primarily at Russia, and ideologically justified by its diabolical policies. ..."
"... Russiagate was very successful. You just have to understand the objectives. It was a great distraction. Diverting peoples attention from the continued fleecing of the "real people" which are the bottom 90% by the "Corporate People" and their Government Lackeys. ..."
"... It provided an excuse for the acting CEO (a figurehead) of the Corporate Empire to go back on many of the promises made that got him elected, and to fill the swamp with Neocon and Koch Brother creatures with the excuse the Deep State made him do it. More proof that there is no deception that is too ridiculous to be believed so long as you have enough pundits claiming it to be so ..."
"... If you've done just a cursory look into Seth Rich, you'd be very suspicious about the story of his life and death. IMO Assange/Wikilleaks were set up. And Flynn was set up too. What they are doing is Orwellian: White Helmets, election manipulation, propaganda, McCarthism, etc. If you're not angry, you're not paying attention. ..."
"... See also this primer on Mueller's MO. ..."
"... The button pushers behind the Trump collusion and Russia election hacking false narratives got what they wanted: to walk the democrats and republicans straight into Cold War v2; to start their campaign to suppress alternative voices on the internet; to increase military spending; and more, more, more war. ..."
"... Russiagate was very successful <=pls read, re-read Pft @ 46.. he listed many things. divide and conquer accomplished. a nation state is defined as an armed rule making structure, designed by those who control a territory, and constructed by the lawyers, military, and wealthy and run by the persons the designers appoint, for the appointed are called politicians. ..."
"... At the beginnng of Russiagate, I wrote on Robert Parry's Consirtium News that Russiagate is Idiocracy piggy-backing on decades and literally billions of dollars of anti-Soviet and anti-Russian propaganda. How hard would it be to brainwash an already brainwashed population? ..."
"... The purveyors of Russiagate will re-compose themselves, brush off all reports and continue on. One just cannot get away from one's nature, even when that nature is pure idiocy. ..."
"... Russiagate will not go away unfortunately because it has evolved in the "Russiagate Industry". As mentioned by others, the Russiagate Industry has been very profitable for many industries and people. Russiagate has generated an entire cottage industry of companies around censorship and "find us a Russian". Dow Jones should have an index on the Russiagate Industry. ..."
For more than two years U.S. politicians, the media and some bloggers hyped a conspiracy theory. They claimed that Russia had
somehow colluded with the Trump campaign to get him elected.
An obviously fake 'Dirty Dossier' about Trump, commissioned by the Clinton campaign, was presented as evidence. Regular business
contacts between Trump flunkies and people in Ukraine or Russia were claimed to be proof for nefarious deals. A Russian
click-bait company was accused of manipulating the U.S. electorate by posting puppy pictures and crazy memes on social media.
Huge investigations were launched. Every rumor or irrelevant detail coming from them was declared to be - finally - the evidence
that would put Trump into the slammer. Every month the walls were closing in on Trump.
Finally the conspiracy theory has run out of steam. Russiagate
is finished :
After two years and 200 interviews, the Senate Intelligence Committee is approaching the end of its investigation into the 2016
election, having uncovered no direct evidence of a conspiracy between the Trump campaign and Russia, according to both Democrats
and Republicans on the committee.
...
Democrats and other Trump opponents have long believed that special counsel Robert Mueller and Congressional investigators would
unearth new and more explosive evidence of Trump campaign coordination with Russians. Mueller may yet do so, although Justice
Department and Congressional sources say they believe that he, too, is close to wrapping up his investigation.
Nothing, zero, nada was found to support the conspiracy theory. The Trump campaign did not collude with Russia. A few flunkies
were indicted for unrelated tax issues and for lying to the investigators about some minor details. But nothing at all supports the
dramatic claims of collusion made since the beginning of the affair.
In a recent statement House leader Nancy Pelosi was reduced
to accuse Trump campaign officials of doing their job:
"The indictment of Roger Stone makes clear that there was a deliberate, coordinated attempt by top Trump campaign officials to
influence the 2016 election and subvert the will of the American people. ...
No one called her out for spouting such nonsense.
Russiagate created a lot of damage.
The alleged Russian influence campaign that never happened was used to
install censorship on social media. It was used
to undermine the election of progressive Democrats. The weapon salesmen used it to push for more NATO aggression against Russia.
Maria Butina, an innocent Russian woman interested in good relation with the United States, was
held in solitary confinement
(recommended) until she signed a paper which claims that she was involved in a conspiracy.
In a just world the people who for more then two years hyped the conspiracy theory and caused so much damage would be pushed out
of their public positions. Unfortunately that is not going to happen. They will jump onto the next conspiracy train continue from
there.
Posted by b on February 12, 2019 at 01:38 PM |
Permalink
Comments next
page " Legally, Maria Butina was suborned into signing a false declaration. If there were the rule of law, such party or
parties that suborned her would be in gaol. Considering Mueller's involvement with Lockerbie, I am not holding my breath. FWIW the
Swiss company that made the timers allegedly involved in Lockerbie have some
comments of its own .
I will be really glad when this 'get Russia' craziness is over, but I suspect even if the Mueller investigation has nothing,
all the same creeps will be pulling out the stops to generate something... Skripal, Integrity Initiative, and etc. etc. stuff
like this just doesn't go away overnight or with the end of this 'investigation'... folks are looking for red meat i tell ya!
as for Maria Butina - i look forward to reading the article.. that was a travesty of justice but the machine moves on, mowing
down anyone in it's way... she was on the receiving end of all the paranoia that i have come to associate with the western msm
at this point...
Hillary's loss is actually best explained as her throwing the election to Trump . The Deep State wanted a nationalist
to win as that would best help meet the challenge from Russia and China - a challenge that they had been slow to recognize.
= ... to smear Wikileaks as a Russian agent
The DNC leak is best explained as a CIA false flag.
= ... to remove and smear Michael Flynn
Trump said that he fired Flynn for lying to VP Pence but Flynn's conversations with the Russian Ambassador after Obama threw
them out for "meddling" in the US election was an embarrassment to the Administration as Putin's Putin's decision not to respond
was portrayed as favoritism toward the Trump Administration.
You can take this to the bank. Hardcore Russiagaters will never give up their belief in collusion and Russian influence in
the 2016 campaign -- never. Congress and Mueller will be accused of engaging in a coverup. This is typical behavior for conspiracy
theorists.
I hope that Russiagate is indeed "finished", but I think it needs to be draped with garlic-clove necklaces, shot up with silver
bullets, sprinkled with holy water, and a wooden stake driven through its black heart just to make sure.
I don't dispute the logical argument B. presents, but it may be too dispassionately rational. I know that the Russiagate
proponents and enthralled supporters of the concept are too invested psychologically in this surrealistic fantasy to let go, even
if the official outcome reluctantly admits that there's no "there" there.
The Democratic Party, one of the major partners mounting the Russophobic psy-op, has already resolved to turn Democratic committee
chairmen loose to dog the Trump administration with hearings aggressively flogging any and all matters that discredit and undermine
Trump-- his business connections, social liaisons, etc.
They may hope to find the Holy Grail: the elusive "bombshell" that "demands" impeachment, i.e., some crime or illicit conduct
so heinous that the public will stand for another farcical impeachment proceeding. But I reckon that the Dems prefer the "soft"
impeachment of harassing Trump with hostile hearings in hopes of destroying his 2020 electability with the death of a thousand
innuendoes and guilt-by-association.
Thus, even if the Mueller report is underwhelming, I think that the Democrats and TDS-saturated Trump opponents will attempt
to rehabilitate it by pretending that it contains important loose ends that need to be pursued. In other words, to perpetuate
the Mueller-driven political Russophobia by all other available means.
Put more succinctly, I fear that Russiagate won't be finished until Rachel Maddow says it's finished. ;)
Once a hypothesis is fixed in people's minds, whether true or not, it's hard to get them to let go of it. And let's not forget
how many times the narrative changed (and this is true in the Skripal case as well), with all past facts vanishing to accommodate
a new narrative.
So I, like others, expect the fake scandal to continue while many, many other real crimes (the US attempted
coup in Venezuela and the genocidal war in Yemen, for instance) continue unabated.
Putin solicits public input for essential national
policy goals . If ever there was a template to follow for an actual MAGAgenda, Putin's Russia provides one. While US politicos
argue over what is essentially Bantha Pudu, Russians are hard at work improving their nation which includes restructuring their
economy.
Russiagate has exposed the great degree of corruption within the Justice Department bureaucracy, particularly within FBI,
and within the entire Democrat Party.
I very much doubt it it is over. Trump is corrupt and has links to corrupt Russians. Collusion, maybe not, but several
stinking individuals are in the frame for, guess what - ...bring it on... The fact that Hilary was arguably even worse (a point
made ad-nauseum on here) is frankly irrelevant. The vilification of Trump will not affect the warmongers efforts. He is a useful
idiot
for a take on the alternative reality some are living in
emptywheel has an article up on the nbc link b provides and the article on butina is discussed in the comments section...
as i said - they are looking for red meat and will not be happy until they get some... they are completely zonkers...
Blooming Barricade , Feb 12, 2019 2:55:18 PM |
link
Now that this racket has been admitted as such, I expect all of the media outlets that devoted banner headlines, hundreds of thousands
of hours of cable TV time, thousands of trees, and free speech online to immediately fire all of their journalists and appoint
Glenn Greenwald as the publisher of the New York Times, Michael Tracey at the Post, Aaron Matte at the Guardian, and Max Blumenthal
at the Daily Beast.
Since this is obviously not going to be allowed to happen, and since these people get away with everything, expect this
to never end, despite all evidence to the contrary. It doesn't matter if they've been exposed as CIA propagandists or Integrity
Initiative stooges, the game goes on...and on.... the job security of these disgraced columnists is the greatest in the Western
world.
The US needs an enemy, how else can they ask NATO members to cough up 2% of GDP [just for one example Germany's GDP is nearly
4 Trillion dollars [2017] for defence spending, what a crazy sum all NATO members must fork out to please the US, but then most
of that money must be spent on the US MIC 'interoperability' of course.
Then of course Russia has to be surrounded by NATO should they try and take over Europe by surging through the Fulda gap./s
Then of course there are the professional pundits who have built careers on anti Russian propaganda, Rachel Maddow for instance
who earns 30,000$ per day to spew anti Russian nonsense.
Another great damage of Russiagate was the instigating of a nuclear arms race directed primarily at Russia, and ideologically
justified by its diabolical policies.
I'm sorry b is so down on Conspiracy Theories, since they reveal quite real staged homicidal false flag operations of US power.
Feeding into the stigmatizing of the truth about reality is not in the interests of the earth's people.
somehow I see this "revelation: tied to Barr's approaching tenure. I think they (FBI/DOJ) didn't want his involvement in their
noodle soup of an investigation and the best way to accomplish that was to end it themselves. I also suspect that a deal has been
made with Trump, possibly in exchange for leaving his family alone.
So we will see no investigation of Hillary, her 650,000
emails or the many crimes they detailed (according to NYPD investigation of Weiner's laptop) and the US will continue to be at
war all day, every day. Team Swamp rules.
Meanwhile, MSM is prepping its readers for the possibility that the Mueller report will never be released to us proles. If that's
the case, I'm sure nobody will try to use innuendo to suggest it actually contains explosive revelations after all...
Harry, its vitally important as the US desperately wants to keep Europe under its thumb and to stop this European army which
means Europe lead by Paris and Berlin becomes a world power. Trump's attempts to make nice with Russia is to keep it out of the
EU bloc.
Well, the liberal conspiracy car crash ensured downmarket Mussolini a second term, it appears...Hard Brexit Tories also look likely
to win thanks to centrist sabatoge of the left. You reap what you sow, corporate presstitutes!
Sane people have predicted the end of Russiagate almost as many times as insane people have predicted that the "smoking gun that
will get rid of Trump" has been found. And yet the Mighty Wurlitzer grinds on, while social media is more and more censored.
I expect it all to continue until the 2020 election circus winds up into full-throated mode, and no one talks about anything but
the next puppet to be appointed. Oops, I mean "elected".
You also need to behead the corpse, stuff the mouth with a lemon and then place the head down in the coffin with the body in
supine (facing up) position. Weight the coffin with stones and wild roses and toss it into a fast-flowing river.
Russiagate won't be finished until a wall is built around Capitol Hill and all its inhabitants and worker bees declared insane
by a properly functioning court of law.
I also suspect that a deal has been made with Trump, possibly in exchange for leaving his family alone. So we will see no
investigation of Hillary ...
Underlying your perspective is the assumption that USA is a democracy where a populist "outsider" could be elected President,
Yet you also believe that Hillary and the Deep State have the power to manipulate government and the intelligence agencies and
propose a "conspiracy theory" based on that power.
Isn't it more likely that Trump made it clear (behind closed doors, of course) that he was amenable to the goals of the Deep
State and that the bogus investigation was merely done to: 1) cover their own election meddling; 2) eliminate threats like Flynn
and Assange/Wikileaks; 3) anti-Russian propaganda?
Dowd, Trump's former lawyer on Russiagate stated there may not even be a report. If this is the case then the Zionist rulers have
gotten to Mueller who no doubt figured out that the election collusion breadcrumbs don't lead to Putin, they lead to Netanyahu
and Zionist billionaire friends! So Mueller may have to come up with a nothing burger to hide the truth.
B is the only alternative media blogger I've followed for a significant amount of time without becoming disenfranchised. Not because
he has no blind spot - his is just one I can deal with... optimism.
I will believe Russiagate is finished when expelled Russian staff gets back, when the US returns the seized Russian properties,
when the consulate is Seattle reopens and when USA issues formal apology to Russia.
Posted by: hopehely | Feb 12, 2019 5:14:49 PM |
link
Nobody has ever advanced the tiniest shred of credible evidence that 'Russia' or its government at any level was in any way implicated
either in Wikileaks' acquisition of the DNC and Podesta emails or in any form of interference with the Presidential election.
This has been going on for three years and not once has anything like evidence surfaced.
On the other hand there has been an abundance of evidence that those alleging Russian involvement consistently refused to listen
to explore the facts.
Incredibly, the DNC computers were never examined by the FBI or any other agency resembling an official police agency. Instead
the notorious Crowdstrike professionally russophobic and caught red handed faking data for the Ukrainians against Russia were
commissioned to produce a 'report.'
Nobody with any sense would have credited anything about Russiagate after that happened.
Thgen there was the proof, from VIPS and Bill Binney (?) that the computers were not hacked at all but that the information
was taken by thumbdrive. A theory which not only Wikileaks but several witnesses have offered to prove.
Not one of them has been contacted by the FBI, Mueller or anyone else "investigating."
In reality the charges from the first were ludicrous on their face. There is, as b has proved and every new day's news attests,
not the slightest reason why anyone in the Russian government should have preferred Trump over Clinton. And that is saying something
because they are pretty well indistinguishable. And neither has the morals or brains of an adolescent groundhog.
Russiagate is over, alright, The Nothingburger is empty. But that means nothing in this 'civilisation': it will be recorded
in the history books, still to be written, by historians still in diapers, that "The 2016 Presidential election, which ended in
the controversial defeat of Hillary Clinton, was heavily influenced by Russian agents who hacked ..etc etc"
What will not be remembered is that every single email released was authentic. And that within those troves of correspondence
there was enough evidence of criminality by Clinton and her campaign to fill a prison camp.
Another thing that will not be recalled is that there was once a young enthusiastic man, working for the DNC, who was mugged
one evening after work and killed.
The 'no collusion' result will only spur the 'beginning of the end' baboons to shout even more, they'll never stop until they
die in their beds or the plebs of the Republic made them adore the street lamp posts, you'll see. The former is by far more likely,
the unwashed of American have never had a penchant for foreign affairs except for the few spasms like Vietnam.
There was collusion alright but the only Russians who helped Trump get elected and were in on the collusion are citizens of ISRAEL
FIRST, likewise for the American billionaires who put Trump in the power perch. ISRAEL FIRST.
That's why Trump is on giant billboards in Israel shaking hands with the Yahoo. Trump is higher in the polls in Israel than
in the U.S. If it weren't that the Zionist upper crust need Trump doing their dirty work in America, like trying today get rid
of Rep. Omar Ilhan, then Trump would win the elections in Ziolandia or Ziostan by a landslide cause he's been better for the Joowish
state than all preceding Presidents put together. Mazel tov to them bullshet for the rest of us servile mass in the vassal West
and Palestinians the most shafted class ever. Down with Venezuela and Iran, up with oil and gas. The billionare shysters' and
Trump's payola is getting closer. Onward AZ Empire!
He proved himself so easy to troll during the election. It wouldn't surprise me if aim of the domestic intelligence agencies all
along was to get him elected and have a candidate they could manipulate.
At least Germany has the good sense not to throw taxpayer money at the F-35.
German F-35 decision sacrifices NATO capability for Franco-German industrial cooperation I don't know what they have
in mind with a proposed airplane purchase. If they need fighters, buy or lease Sweden's Gripen. If attack airplanes are what they're
after, go to Boeing and get some brand new F-15X models. If the prickly French are agreeable to build a 6th generation aircraft,
that would be worth a try.
Regarding Rachel Maddow, I recently had an encounter with a relative who told me 1) I visited too many oddball sites and 2)
he considered Rachel M. to be the most reliable news person in existence. I think we're talking "true believer" here. :)
It wouldn't surprise me if aim of the domestic intelligence agencies all along was to get him elected and have a candidate
they could manipulate.
Considering how those "intelligence agencies" are hard pressed to find their own tails, even if you allow them to use both
hands, it would surprise me.
That Trump would turn out to be a tub of jello in more than just a physical way has been a surprise to an awful lot of us.
Russiagate was very successful. You just have to understand the objectives. It was a great distraction. Diverting
peoples attention from the continued fleecing of the "real people" which are the bottom 90% by the "Corporate People" and their
Government Lackeys.
It provided an excuse for the acting CEO (a figurehead) of the Corporate Empire to go back on many of the promises made
that got him elected, and to fill the swamp with Neocon and Koch Brother creatures with the excuse the Deep State made him do
it. More proof that there is no deception that is too ridiculous to be believed so long as you have enough pundits claiming it
to be so
Allowed the bipartisan support for the clamp down on alt media with censorship by social media (Deep State Tools) and funded
by the Ministry of Truth set up by Obama in his last days in office to under the false pretense of protecting us from foreign
governments interference in elections (except Israel of course) . Similar agencies have been set up or planned to be in other
countries followig the US example such as UK, France, Russia, etc.
Did anyone really expect Mr "Cover It Up " Mueller to find anything? Mueller is Deep State all the way and Trump is as well,
not withstanding the "Fake Wrestling " drama that they are bitter enemies. All the surveillance done over the past 2-3 decades
would have so much dirt on the Trumpet they could silence him forever . Trump knew that going in and I sometimes wonder if he
was pressured to run as a condition to avoid prosecution. Pretty sure every President since Carter has been "Kompromat"
If you've done just a cursory look into Seth Rich, you'd be very suspicious about the story of his life and death. IMO
Assange/Wikilleaks were set up. And Flynn was set up too. What they are doing is Orwellian: White Helmets, election manipulation,
propaganda, McCarthism, etc. If you're not angry, you're not paying attention.
Russians and likely at the behest of the Russian state interfered and it was fair payback for Yeltsin's election. It is time to
move on but not in feigned ignorance of what was done. Was it "outcome" affecting, possibly, but not clearly and if the US electoral
college and electoral system generally is so decrepit that a second level power in the world can influence then its the US's fault.
It's not like the 2000 election wasn't a warning shot about the rottenness of system and a system that doesn't understand a
warning shot deserves pretty much what it gets. But there's enough non-hype evidence of acts and intent to say yes, the Russians
tried and may have succeeded. They certainly are acting guilty enough. but still close the book move and move on to Trump's 'real'
crimes which were done without a Russian assist.
I seem to recall former UK Ambassador to Uzbekistan Craig Murray saying that it was not a hack and that he had been handed
a thumb drive in a field near American University by a disgruntled Democrat whistleblower. Further, I seem to recall William Binney,
former NSA Technical Leader for intelligence, conducting an experiment to show that internet speeds at the time would not allow
the information to be hacked - they knew the size of the files and the period over which they were downloaded. Plus, Seth Rich.
So why does anyone even believe it was a hack, @32 THN?
Just another comment re Mueller. There is a great documentary by (Dutch, not Israeli---different person) Gideon Levy, Lockerbie
Revisited. The narration is in Dutch, but the interviews are in English, and there is a small segment of a German broadcast. The
documentary ends abruptly where one set of FBI personnel contradict statements by another set of FBI personnel. See also
this primer on Mueller's MO.
reply to Les 42
"It wouldn't surprise me if aim of the domestic intelligence agencies all along was to get him elected and have a candidate they
could manipulate."
Not the intelligence agencies, the Military IMO. They knew HC for what she was; horrifically corrupt and,again IMO,they know
she is insane.
They saw and I think still see Trump as someone they could work with, remember Rogers (Navy) of the NSA going to him immediately
once he was elected? That was the Military protecting him as best they could.
They IMO have kept him alive and as long as he doesn't send any troops into "real" wars, they will keep on keeping him alive.
This doesn't mean Trump hasn't gone over to the Dark Side, just that no military action will take place that the military command
doesn't fully support.
Again, I could be wrong, he could be backed by fiends from Patagonia for all I really know:)
The button pushers behind the Trump collusion and Russia election hacking false narratives got what they wanted: to walk the
democrats and republicans straight into Cold War v2; to start their campaign to suppress alternative voices on the internet; to
increase military spending; and more, more, more war.
Boy, I hope Jackrabbit sees this. Everyone knows I believe Trump is the anointed chosen of the Zionist 1%. There was no Russia
collusion; it was Zionist collusion with a Russian twist...
Oh yeah! Forgot to mention the latest. Trump is asking Kim to provide a list of his nuclear scientists! Before Kim acts on this
request, he should call up the Iranian government for advise 'cause they have lots of experience and can warn Kim of what will
happen to each of those scientists. They'll be put on a kill-list and will be extrajudicially wacked as in executed. Can you believe
the chutzpah? Trump must think Kim is really stupid to fall for that one!
Aye! The thought of six more years of Zionist pandering Trump. Barf-inducing prospect is too tame.
The view from the hermitage is, we are in the age of distractions. Russiagate will be replaced with one of a litany of distractions,
purely designed to keep us off target. The target being, corruption, vote rigging, illegal wars, war crimes, overthrowing sovereign
governments, and political assasinations, both at home and abroad. Those so distracted, will focus on sillyness; not the genuine
danger afoot around the planet. Get used to it; it's become the new normal.
@76Hw
I have yet to read anything more delusional, nay, utterly preposterous. Methinks you over-project too much. Even Trump would have
a belly-ache laugh reading that sheeple spiel. You're the type that sees the giant billboard of Zionist Trump and Yahoo shaking
hands and drones on and on that our lying eyes deceive us and it's really Trump playing 4-D chess. I suppose when he tried to
pressure Omar Ilhan into resigning her seat in Congress yesterday, that too was reverse psychology?
Trump instagramed the billboard pic, he tweeted it, he probably pasted it on his wall; maybe with your kind of wacky, Trump
infatuation, you should too!
Russiagate is finished because Mueller discovered an embarrassing fact: The collusion was and always will be with Israel. Here's
Trump professing his endless love for Zionism:
Trump Resign
Russiagate was very successful <=pls read, re-read Pft @ 46.. he listed many things. divide and conquer accomplished.
a nation state is defined as an armed rule making structure, designed by those who control a territory, and constructed by the
lawyers, military, and wealthy and run by the persons the designers appoint, for the appointed are called politicians.
Most designs of armed nation states provide the designers with information feedback and the designers use that information
to appoint more obedient politicians and generals to run things, and to improve the design to better serve the designers. The
armed rule making structure is designed to give the designers complete control over those targeted to be the governed. Why so
stupid the governed? ; always they allow themselves to be manipulated like sheep.
When 10 angry folks approach you with two pieces of ropes: one to throw over the tree branch under which your horse will be
supporting you while they tie the noose around your neck and the other shorter piece of rope to tie your hands behind ..your back
you need at that point to make your words count , if five of the people are black and five are white. all you need do is
say how smart the blacks are, and how stupid the whites are, as the two groups fight each other you manage your escape. democrat
vs republican= divide to conquer. gun, no gun = divide to conquer, HRC vs DJT = divide to conquer, abortion, no abortion = divide
to conquer, Trump is a Russian planted in a high level USA position of power = divide to conquer, They were all in on it together,,
Muller was in the white house to keep the media supplied with XXX, to keep the law enforcement agencies in the loop, and to advise
trump so things would not get out of hand ( its called Manipulation and the adherents to the economic system called Zionism
For the record, Zionism is not related to race, religion or intelligence. Zionism is a system of economics that take's no captives,
its adherents must own everything, must destroy and decimate all actual or imaginary competition, for Zionist are the owners and
masters of everything? Zionism is about power, absolute power, monopoly ownership and using governments everywhere to abuse the
governed. Zionism has many adherents, whites, blacks, browns, Christians, Jews, Islamist, Indians, you name it among each class
of person and walk of life can be found persons who subscribe to the idea that they, and only they, should own everything, and
when those of us, that are content to be the governed let them, before the kill and murder us, they usually end up owning everything.
1. why the Joint non nuclear agreement with Iran and the other nuclear power nations, that prevented Iran from developing nuclear
weapons, was trashed? Someone needs to be able to say Iran is developing ..., at the right time.
2. Why Netanyohu made public a video that claimed Iran was developing nuclear stuff in violation of the Iran non nuclear agreement,
and everybody laughed,
3. Why the nuclear non proliferation agreement with Russia, that terminated the costly useless arms race a decade ago, has
been recently terminated, to reestablish the nuclear arms race, no apparent reason was given the implication might be Russia could
be a target, but
4. why it might make sense to give nukes to Saudi Arabia or some other rogue nation, and
5. why no one is allowed to have nuclear weapons except the Zionist owned and controlled nation states.
Statement: Zionism is an economic system that requires the elimination of all competition of whatever kind. It is a winner
get's all, takes no prisoners, targets all who would threaten or be a challenge or a threat; does not matter if the threat is
in in oil and gas, technology or weapons as soon as a possibility exist, the principles of Zionism would require that it be taken
out, decimated, and destroyed and made where never again it could even remotely be a threat to the Empire, that Zionism demands..
Hypothesis: A claim that another is developing nuclear weapon capabilities is sufficient to take that other out?
I am glad that most commenters understand that Russiagate will not go away. But the majority appear to miss the real reason. Russiagate
is not an accusation, it is the state of mind.
At the beginnng of Russiagate, I wrote on Robert Parry's Consirtium News that Russiagate is Idiocracy piggy-backing on
decades and literally billions of dollars of anti-Soviet and anti-Russian propaganda. How hard would it be to brainwash an already
brainwashed population?
The purveyors of Russiagate will re-compose themselves, brush off all reports and continue on. One just cannot get away
from one's nature, even when that nature is pure idiocy. Of course, the most ironic in the affair is that it is the so called
US "intellectuals", academics and other assorted cretins who are the most fervent proponents. If you were wondering how Russia
can make such amazing defensive weapons that US can only deny exist and wet dream of having, there is your answer. It is the state
of mind. The whole of US establishment are legends in their on lunch time and totally delusional about the reality surrounding
them - both Russiagate and MAGA cretins, no report can help the Russiagate nation.
Finally, I am thinking of that crazy and ugly professor bitch from the British Cambridge University who gives her lectures
naked to protest something or other. I am so lucky that I do not have to go to a Western university ever again. What a catastrophic
decline! No Brexit can help the Skripal nation.
Russiagate is finished, but is DJT also among the rubble?
Hardly any money for the border wall and still lingering in the ME?
If Hoarsewhisperer proves to be correct above re: DJT, he will really have to knock our socks off before election 2020. To
do this he will have to unequivocally and unceremoniously withdraw from the MENA and Afghanistan and possibly declare a National
Emergency for more money for the wall.
The problem is, when he does this, he will look impulsively dangerous and this may harm his mystique to the lemmings who need
a president to be more "presidential."
My money is on status quo all the way to 2020 and the rethugz hoping the Dems will eat their own in an orgy of warring identities.
The collusion story may be faltering, but the blame for Russia poisoning the Skripals lives on. The other night on The News Hour,
"Judy" led off the program with this: "It has been almost a year since Kremlin intelligence officers attempted to kill a Russian
defector in the British city of Salisbury by poisoning him with a nerve agent. That attack, and the subsequent death of a British
woman, scared away tourists and shoppers, but authorities and residents are working to get the town's economy back on track. Special
correspondent Malcolm Brabant reports."
Russiagate will not go away unfortunately because it has evolved in the "Russiagate Industry". As mentioned by others,
the Russiagate Industry has been very profitable for many industries and people. Russiagate has generated an entire cottage industry
of companies around censorship and "find us a Russian". Dow Jones should have an index on the Russiagate Industry.
Here is one recent example. You know the measles outbreak in the US Pacific Northwest. Yup, the Russians. How do we know.
A government funded research grant. The study found that 899 tweets caused people to doubt vaccines. Looks like money is
to be had even by academics for the right results.
"... The ruling class has successfully ruled out any concept of consent. Keep bringing consent up and their philosophies will be shown to be the same as gang rapists. ..."
"... They call themselves liberals, but they are intent upon abolishing liberty. ..."
"... They promise the blessings of the Garden of Eden ..."
'Liber' in Latin means:
1) free (man)
2) free from tribute
3) independent, outspoken/frank
4) unimpeded
5) void of
The author needs to recheck his definitions. Voluntary exchange, consent, free markets,
free will, etc are just some of the concepts at the heart of the true libertarian thought.
The ruling class has successfully ruled out any concept of consent. Keep bringing consent
up and their philosophies will be shown to be the same as gang rapists.
"The champions of socialism call themselves progressives, but they recommend a system
which is characterized by rigid observance of routine and by a resistance to every kind of
improvement. They call themselves liberals, but they are intent upon abolishing liberty. They
call themselves democrats, but they yearn for dictatorship. They call themselves
revolutionaries, but they want to make the government omnipotent. They promise the blessings
of the Garden of Eden, but they plan to transform the world into a gigantic post office.
Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble
cause to fight!" – Ludwig Von Mises
"... 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. ..."
"... 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.
..."
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.
<> <> <> <> <> <> <> <> <> <>
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.
Free market is possible only under strict government regulation. Without government regulation free market quickly
deteriorates into the law of jungles. Such a paradox ;-)
And if financial oligarchy gets to power as they got via coup d'état in the USA in late 7th, it is only a matter of time before
the society collapses. They are very destructive to the society at large. Probably more so then organized crime. But wait. They
actually can be viewed as special type of organized prime as is "The best way to rob the bank is to own it".
Notable quotes:
"... Idiots 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. ..."
"... 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!" ..."
Idiots 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.
Look, 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!"
"... 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! ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... Paraphrasing Marie Antoinette "Let them eat contaminated cake" ..."
"... Funny how libertarians never argue for privatizing the military, or law enforcement. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... As the saying goes, you never miss your water until your well runs dry. ..."
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.
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.
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.
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.
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!
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!
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.
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.
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.
"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.)
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-protections
Michael McLemore Athens, Georgia 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".
FunkyIrishman member of the resistance Jan. 11 Times Pick
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.
@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.
European food is heavily regulated, uh, by governments. Much tastier and doesn't contain
known carcinogens. Watching the train wreck of the United States.
Will Schmidt perlboy on a ranch 6 miles from Ola, AR 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.
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.
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.
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.
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.
"...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.
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.
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 .
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.
@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.
James Wallis Martin Christchurch, New Zealand Jan. 10
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?
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.
@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.
@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.
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? : -)
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.
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.
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.
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.
@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?
@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).
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.
@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.
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.
@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.
"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.
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.
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?
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.com
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.
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.
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.
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.
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.
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.
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.
@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.
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.
@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.
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.
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.
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.
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.
@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.
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.
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.
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.
@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.
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.
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.
@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?
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.
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.
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.
@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....
@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."
@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).
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.
"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.
@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.
"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".
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.
@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.
@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?
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.
@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.
@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.
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.
@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.
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.
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.
@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>
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.
@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.
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.
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...
@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.
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.
@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."
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.
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.
@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.
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.
@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.
@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.
@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."'
@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.
@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.
@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.
@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.
"... America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society." ..."
"... He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement." ..."
"... The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president. ..."
"... The Two-Income Trap: Why Middle-Class Parents Are Growing Broke ..."
"... Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people." ..."
"... "What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?" ..."
"... Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it." ..."
"... Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment. ..."
"... Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax. ..."
"... "I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not." ..."
"... Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed." ..."
"... But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left. ..."
"... Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin. ..."
"... Hillbilly Elegy ..."
"... Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature." ..."
"All I'm saying is don't act like the way things are is somehow ordained by God."
Last Wednesday, the conservative talk show host Tucker Carlson started a fire on the right after airing a prolonged
monologue on his show that was, in essence, an indictment of American capitalism.
America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking
marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families
is not worth having. A system like that is the enemy of a healthy society."
He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate
the forces of change purely for their own profit and amusement."
The monologue was stunning in itself, an incredible moment in which a Fox News host stated that for generations, "Republicans
have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars." More
broadly, though, Carlson's position and the ensuing controversy reveals an ongoing and nearly unsolvable tension in conservative
politics about the meaning of populism, a political ideology that Trump campaigned on but Carlson argues he may not truly understand.
Moreover, in Carlson's words: "At some point, Donald Trump will be gone. The rest of us will be gone too. The country will remain.
What kind of country will be it be then?"
The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher
wrote of Carlson's monologue,
"A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would
be the first affirmative vote I've ever cast for president." Other conservative commentators scoffed. Ben Shapiro wrote in
National Review that Carlson's monologue sounded far more like Sens. Bernie Sanders or Elizabeth Warren than, say, Ronald Reagan.
I spoke with Carlson by phone this week to discuss his monologue and its economic -- and cultural -- meaning. He agreed that his
monologue was reminiscent of Warren, referencing her 2003
bookThe Two-Income Trap: Why Middle-Class Parents Are Growing Broke . "There were parts of the book that I disagree
with, of course," he told me. "But there are parts of it that are really important and true. And nobody wanted to have that conversation."
Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank
fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any
policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites
-- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people."
But whether or not he likes it, Carlson is an important voice in conservative politics. His show is among the
most-watched television programs in America. And his raising questions about market capitalism and the free market matters.
"What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put
these policies into effect, what will you have in 10 years?"
Populism on the right is gaining, again
Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald
Trump, whose populist-lite
presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless
you figure out how to put the flames out, it will consume it."
Populism is a rhetorical approach that separates "the people" from elites. In the
words of Cas
Mudde, a professor at the University of Georgia, it divides the country into "two homogenous and antagonistic groups: the pure people
on the one end and the corrupt elite on the other." Populist rhetoric has a long history in American politics, serving as the focal
point of numerous presidential campaigns and powering William Jennings Bryan to the Democratic nomination for president in 1896.
Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative,
thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment.
When right-leaning pundit Ann Coulter
spoke with Breitbart Radio about Trump's Tuesday evening Oval Office address to the nation regarding border wall funding, she
said she wanted to hear him say something like, "You know, you say a lot of wild things on the campaign trail. I'm speaking to big
rallies. But I want to talk to America about a serious problem that is affecting the least among us, the working-class blue-collar
workers":
Coulter urged Trump to bring up overdose deaths from heroin in order to speak to the "working class" and to blame the fact
that working-class wages have stalled, if not fallen, in the last 20 years on immigration. She encouraged Trump to declare, "This
is a national emergency for the people who don't have lobbyists in Washington."
Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax.
These sentiments have even pitted popular Fox News hosts against each other.
Sean Hannity warned his audience that New York Rep. Alexandria Ocasio-Cortez's economic policies would mean that "the rich people
won't be buying boats that they like recreationally, they're not going to be taking expensive vacations anymore." But Carlson agreed
when I said his monologue was somewhat reminiscent of Ocasio-Cortez's
past comments on the economy , and how even a strong economy was still leaving working-class Americans behind.
"I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home
an ever-expanding proportion of the money is not a recipe for a stable society. It's not."
Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent
a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that
labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and
figure out how to protect average people from these remarkably powerful forces that have been unleashed."
"I think populism is potentially really disruptive. What I'm saying is that populism is a symptom of something being wrong," he
told me. "Again, populism is a smoke alarm; do not ignore it."
But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current
state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are
its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson
railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation
of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left.
Carlson's argument that "market capitalism is not a religion" is of course old hat on the left, but it's also been bubbling on
the right for years now. When National Review writer Kevin Williamson
wrote
a 2016 op-ed about how rural whites "failed themselves," he faced a massive backlash in the Trumpier quarters of the right. And
these sentiments are becoming increasingly potent at a time when Americans can see both a booming stock market and perhaps their
own family members struggling to get by.
Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense
of unchosen obligations one might have towards one's kin.
At the Federalist, writer Kirk Jing
wrote of Carlson's
monologue, and a
response
to it by National Review columnist David French:
Our society is less French's America, the idea, and more Frantz Fanon's "Wretched of the Earth" (involving a very different
French). The lowest are stripped of even social dignity and deemed
unworthy of life . In Real America, wages are stagnant, life expectancy is crashing, people are fleeing the workforce, families
are crumbling, and trust in the institutions on top are at all-time lows. To French, holding any leaders of those institutions
responsible for their errors is "victimhood populism" ... The Right must do better if it seeks to govern a real America that exists
outside of its fantasies.
J.D. Vance, author of
Hillbilly Elegy
, wrote that the [neoliberal] economy's victories -- and praise for those wins from conservatives -- were largely meaningless
to white working-class Americans living in Ohio and Kentucky: "Yes, they live in a country with a higher GDP than a generation ago,
and they're undoubtedly able to buy cheaper consumer goods, but to paraphrase Reagan: Are they better off than they were 20 years
ago? Many would say, unequivocally, 'no.'"
Carlson's populism holds, in his view, bipartisan possibilities. In a follow-up email, I asked him why his monologue was aimed
at Republicans when many Democrats had long espoused the same criticisms of free market economics. "Fair question," he responded.
"I hope it's not just Republicans. But any response to the country's systemic problems will have to give priority to the concerns
of American citizens over the concerns of everyone else, just as you'd protect your own kids before the neighbor's kids."
Who is "they"?
And that's the point where Carlson and a host of others on the right who have begun to challenge the conservative movement's orthodoxy
on free markets -- people ranging from occasionally mendacious bomb-throwers like Coulter to writers like
Michael Brendan Dougherty -- separate
themselves from many of those making those exact same arguments on the left.
When Carlson talks about the "normal people" he wants to save from nefarious elites, he is talking, usually, about a specific
group of "normal people" -- white working-class Americans who are the "real" victims of capitalism, or marijuana legalization, or
immigration policies.
In this telling, white working-class Americans who once relied on a manufacturing economy that doesn't look the way it did in
1955 are the unwilling pawns of elites. It's not their fault that, in Carlson's view, marriage is inaccessible to them, or that marijuana
legalization means more teens are smoking weed (
this probably isn't true ). Someone,
or something, did this to them. In Carlson's view, it's the responsibility of politicians: Our economic situation, and the plight
of the white working class, is "the product of a series of conscious decisions that the Congress made."
The criticism of Carlson's monologue has largely focused on how he deviates from the free market capitalism that conservatives
believe is the solution to poverty, not the creator of poverty. To orthodox conservatives, poverty is the result of poor decision
making or a
lack of virtue that can't be solved by government programs or an anti-elite political platform -- and they say Carlson's argument
that elites are in some way responsible for dwindling marriage rates
doesn't make sense .
But in French's response to Carlson, he goes deeper, writing that to embrace Carlson's brand of populism is to support "victimhood
populism," one that makes white working-class Americans into the victims of an undefined "they:
Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes -- civil rights, women's
rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual
revolution, etc. -- and turns the negative or challenging aspects of those changes into an angry tale of what they are
doing to you .
And that was my biggest question about Carlson's monologue, and the flurry of responses to it, and support for it: When other
groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family
dysfunction, the response from many on the right has been, shall we say,
less than
enthusiastic .
Really, it comes down to when black people have problems, it's personal responsibility, but when white people have the same
problems, the system is messed up. Funny how that works!!
Yet white working-class poverty receives, from Carlson and others, far more sympathy. And conservatives are far more likely to
identify with a criticism of "elites" when they believe those elites are responsible for the
expansion of trans
rights or creeping secularism
than the wealthy and powerful people who are investing in
private prisons or an expansion
of the
militarization of police . Carlson's network, Fox News, and Carlson himself have frequently blasted leftist critics of market
capitalism and efforts to
fight
inequality .
I asked Carlson about this, as his show is frequently centered on the turmoils caused by "
demographic change
." He said that for decades, "conservatives just wrote [black economic struggles] off as a culture of poverty," a line he
includes in his monologue .
He added that regarding black poverty, "it's pretty easy when you've got 12 percent of the population going through something
to feel like, 'Well, there must be ... there's something wrong with that culture.' Which is actually a tricky thing to say because
it's in part true, but what you're missing, what I missed, what I think a lot of people missed, was that the economic system you're
living under affects your culture."
Carlson said that growing up in Washington, DC, and spending time in rural Maine, he didn't realize until recently that the same
poverty and decay he observed in the Washington of the 1980s was also taking place in rural (and majority-white) Maine. "I was thinking,
'Wait a second ... maybe when the jobs go away the culture changes,'" he told me, "And the reason I didn't think of it before was
because I was so blinded by this libertarian economic propaganda that I couldn't get past my own assumptions about economics." (For
the record, libertarians have
critiqued Carlson's
monologue as well.)
Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an
economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a
function or raw nature."
And clearly, our market economy isn't driven by God or nature, as the stock market soars and unemployment dips and yet even those
on the right are noticing lengthy periods of wage stagnation and dying little towns across the country. But what to do about those
dying little towns, and which dying towns we care about and which we don't, and, most importantly, whose fault it is that those towns
are dying in the first place -- those are all questions Carlson leaves to the viewer to answer.
"... 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. ..."
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.
"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.
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.
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.
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.
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.
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.
Po-faced, Libertarian BOLLOCKS.
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'.
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.
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.
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.
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?
'This is more or less the definition of increased productivity and it is what ultimately
leads to improved living standards for everyone'
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.
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'."
Incorrect.
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 ?
You ?
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 ?
Neoliberalism = Socialism for the Rich - Capitalism for the Poor.
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.
Do you see any contradiction between privatised electricity and socialised stadiums?
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.
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:
[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.
Yes, we have a spot of bother, and I think that their name - Institute of Public Affairs - is
quite a misnomer.
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.
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.
It 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.
... In the introduction to the second volume in his series, The State and the
Opposition , Rogovin noted:
A peculiarity of the counter-revolution realized by Stalin and his accomplices was that it
took place under the ideological cover of Marxist phraseology and never-ending attestations
of loyalty to the October Revolution Naturally, such a counter-revolution demanded
historically unprecedented conglomerations of lies and falsifications, the fabrication of
ever-newer myths
Similar to the Stalinists, modern anti-communists use two kinds of myths: namely,
ideological and historical. Under ideological myths we have in mind false ideas, oriented to
the future -- that is, illusory prognoses and promises. These sorts of products of false
consciousness reveal their mythological character by way of their practical realization.
Myths that appeal not to the future but to the past are another matter.
In principle, it is easier to expose these myths than anti-scientific prognoses and
reactionary projects.
Like ideological ones, historical myths are a product of immediate class interests
products of historical ignorance or deliberate falsification -- that is, the concealment of
some historical facts, the tendentious exaggeration, and the distorted interpretation of
others.
Refuting these myths is only possible by rehabilitating historical truth -- the honest
portrayal of actual facts and tendencies of the past.
In this work, Rogovin argued that the fundamental problem facing the USSR was "a
deepening of socially unjustified differentiation of incomes and the comforts of life."
"Workers regularly encounter instances of unearned enrichment through the deceit and the
ripping-off of the state and the people. [ ] Certain groups of the population have the means to
meet their needs at a scale beyond any reasonable norms and outside of their relationship to
social production. [ ] There does not exist any systematic control of sources of income and the
acquisition of valuable goods," he wrote.
In a remarkable statement, inequality, he insisted, not wage-leveling, expressed "in
essence, the social structure of [Soviet] society."
Rogovin called for the implementation of income declarations, whereby people would be
required to report the size of their total income, not just their official wages, so that the
government and researchers might actually know the real distribution of earnings. He advocated
for the establishment of a "socially-guaranteed maximum income" to combat "unjustified
inequality."
Vadim Rogovin and Nina Naumova's 1984 Social Development and Societal
Morals
Elsewhere, Rogovin further argued that inequality lay at the center of the USSR's falling
labor productivity. In a work co-authored with Nina Naumova, Social Development and
Societal Morals , he maintained that the socio-economic crisis facing the USSR stemmed
from the fact that inequality was growing in Soviet society; people worked poorly in the Soviet
Union not because their work was inadequately remunerated relative to others, but
because their commitment to social production had been eroded by intensifying social
stratification that was unrecorded in official statistics.
In 1983, the very same year that Rogovin authored his critical report on the state of
inequality in the USSR that ended up in the hands of the Moscow authorities, another
sociologist, Tatyana Zaslavskaya, would issue a report, kept secret at first but later leaked
to the Western press, advocating a transition to "economic methods of management," -- in other
words, market-based reforms. A central aspect of this was policy centered around increasing
inequality in workers' compensation in order to stimulate production. Zaslavskaya noted at the
time that such reforms would be opposed by what she described as "the more apathetic, the more
elderly, and the less qualified groups of workers."
In a few years, Zaslavskaya would become a leading advisor to Mikhail Gorbachev and one of
the main architects of the pro-market, perestroika reforms. In 1986, she was appointed
the head of the Soviet Sociological Association. Her positions were widely embraced by the
discipline.
Tatiana Zaslavskaya and Mikhail Gorbachev 1989 at Congress of People's Deputies.
[Copyright RIA Novosti]
In contrast, Rogovin's views were frequently, and ever more so, the object of sharp
criticism. In 1985, a discussion occurred at the Institute of Sociology regarding a report
produced by Rogovin and his research team about Soviet lifestyles. In it, Rogovin made openly
critical comments about the anti-egalitarian impact of the shadow economy and the transfer of
wealth through inheritance. It was sharply criticized by some of the Institute's top scholars,
who both disagreed with its content and were nervous about the response it might get from the
authorities. At the discussion, one such individual remarked:
The report by the author presented here has two basic failings: 1) it is inadequately
self-critical; 2) the authors, and in particular, Rogovin himself, aren't appropriately
thinking of the addressee to whom this report is directed. The report is going to the highest
levels [of the Communist Party] and superfluous emotion is not necessary. The next criticism
[I have] is about "unjustified inequality." In principle, there can be no such thing.
[ ] in the note to the TsK KPSS [Central Committee of the Communist Party] [ ] the
recommendations [that you make] demand the utmost care in how you approach them, particularly
those that relate to the "third economy" and taxes on inheritance. [There should be] a
minimum of categoricalness and a maximum of conciliatoriness.
As the decade wore on, Rogovin began to adopt an ever more critical stance on
perestroika , whose devastating economic consequences were increasingly showing
themselves. Rather than bringing prosperity to the masses, Gorbachev's reforms created a total
crisis in the state sector of the economy, exacerbating widespread shortages in food, clothing
and other basic necessities. Economic growth declined from 1986 onwards. In 1989, inflation
reached 19 percent, eroding the gains the population had made in income over the preceding
years. As the scholar John Elliot noted, "When account is taken of additional costs, real per
capita income and real wages probably decreased, particularly for the bottom half of the
population. These costs included: deteriorating quality and unavailability of goods;
proliferation of special distribution channels; longer and more time-consuming lines; extended
rationing; higher prices and higher inflation-rates in non-state stores (e.g., collective farm
market prices were nearly three times those in state stores in 1989); virtual stagnation in the
provision of health and education; and the growth of barter, regional autarky, and local
protectionism."
Newly established private enterprises had great leeway to set prices because they faced
little to no competition from the state sector. They charged whatever the market would bear,
which led to substantial increases in income inequality and poverty, with the most vulnerable
layers of the population hardest hit. The changes were so severe that Elliot insists that
"income inequalities had actually become greater in the USSR than in the USA." In the late
1980s, fully two-thirds of the Soviet population had an income that fell below the
officially-recommended "decent level" of 100 to 150 rubles a month. At the same time, the
shadow economy alone is estimated to have produced 100,000–150,000 millionaires in the
late 1980s. By the early 1990s, one-quarter of the population or 70 million people were
destitute according to official Soviet estimates. Miners' strikes and other signs of social
discontent erupted across the country.
Sociologists were intimately aware of the growing popular discontent. The Communist Party
bureaucracy called upon them to help manage the situation. In 1989, the director of the
Institute of Sociology received a request from the highest layers of the Communist Party. He
was asked to respond to a letter from a rank-and-file party member that expressed extreme
hostility towards the country's "elites." The letter writer described the party as dominated by
an "opportunist nucleus" and called for the waging of a "class war" by the working masses
against their policies. The ideology division of the Central Committee of the Communist Party
wanted the Institute's director to respond to the letter because the sentiments expressed in it
were "widespread (representative) [sic] among the working class."
Soviet economist and
sociologist Genady Lisichkin
In the midst of these circumstances, Rogovin came under fire in one of the country's media
outlets for articles he was writing against the promotion of social inequality. Since the
mid-1980s, he had been championing the implementation of income declarations that would require
people to report their full earnings, progressive taxes, and a socially-declared maximum
income. Based on the amount of positive correspondence he was receiving from readers, it was
clear that his views resonated with the population, a fact noted by Western scholars at the
time. In a public press debate with the economist Gennady Lisichkin, the latter accused Rogovin
of wanting to strengthen the hand of the bureaucracy and implied that he was a Stalinist. He
was allegedly guilty of "Luddism," religious-like preaching, misquoting Marx to find support
for his arguments, wanting the state to have the power to move people around "like cattle,"
defending a deficit-system of distribution based on "ration cards," suffering from "left-wing"
infantilism, and being a "demagogue" and a "war communist." He attempted to link Rogovin to the
very force to which he was most hostile -- Stalinism. The head of the Soviet Sociological
Association, Tatiana Zaslavskaya, openly endorsed Lisichkin's positions.
The disagreements between Rogovin and other scholars over perestroika evolved into
a fierce dispute about Soviet history and the nature of Stalinism. Rogovin identified a
relationship between cheerleading for pro-market reforms and historical falsification. There
was an increasingly widespread effort to link egalitarianism with Stalinism, the struggle for
equality with political repression. In Was There an Alternative? , Rogovin frequently
talked about the fact that the move towards a market economy was accompanied by the propagation
of myths about Soviet history. This was one of those myths.
In 1991, Zaslavskaya co-authored a book that claimed that the Soviet Union's problems lay in
the fact that in the late 1920s it abandoned the New Economic Policy (NEP), during which the
government had loosened state control of the economy and restored market relations to an
extent, in an effort to revitalize the economy under conditions of isolation, backwardness, and
near economic collapse due to years of war. A one-sided and historically dishonest account of
the NEP, this work did not contain any discussion of the political struggle that occurred
during the NEP between Stalin and the Left Opposition over the malignant growth of inequality,
the bureaucratization of the state and economy, and the crushing of inner-party democracy. The
book skipped over this history because it would have cut across one of the central arguments
made at the time in favor of perestroika -- that market relations were inherently at
odds with the interests of the Communist Party bureaucracy. The book's account of labor policy
under Stalin was also false. It insisted that during the 1930s revolutionary enthusiasm was the
primary method used to stimulate people to work, ignoring the fact that income inequality rose
substantially at this time. As the scholar Murray Yanowitch has pointed out, under Stalin
"equality mongering" was labeled the brainchild of "Trotskyites, Zinovievites, Bukharinites and
other enemies of the people."
In the 1980s, sociologists and other scholars promoting perestroika sought to imbue
these policies with a humanitarian mission, insisting that market reforms would allow "the
human factor," which had been crushed under the weight of bureaucratic stagnation, to rise
again. The "human factor" was defined as man's desire for personal recognition through
differentiated, material reward. It was supposedly the primary driver of human activity. To the
degree that official wage policy in the USSR led to a relatively egalitarian distribution of
social resources with wages leveled-out between skilled and unskilled labor, it flew in the
face of man's desire for recognition of his own individual contribution. Rising inequality in
income -- necessitated by the demands of socio-economic development -- was part of the process
of "humanizing socialism." The argument was made that increasing social stratification would
ultimately provide real "socialist justice."
As Tatiana Zaslavskaya claimed in 1990, "Despite all its limitations, the 'classical' market
is, in fact, a democratic (and therefore anti-bureaucratic) economic institution. Within the
framework of its exchange relationships, all participants are at least formally equal; no-one
is subordinated to anyone else. Buyers and sellers act in their own interests and nobody can
make them conclude deals they do not want to conclude. The buyers are free to select sellers
who will let them have goods on the most advantageous terms, but the sellers too can chose
buyers offering the best price."
In making this argument, scholars relied upon the official Soviet definition of socialism --
"from each according to his ability, to each according to his labor" -- that was enshrined in
the country's 1936 constitution. This was also known as the Stalin constitution.
In 1988, Rogovin used the concept of the "human factor" to make a very different argument.
In a piece entitled, "The Human Factor and the Lessons of the Past," he insisted that the
defense of social inequality by the Soviet elite was one of the key reasons why the "human
factor" had degenerated in the USSR. The very best elements of "the human factor" had been
crushed by Stalin during the Terror. Corruption, disillusionment, parasitism, careerism and
individual self-promotion -- the most distinctive features of the Brezhnev era -- were the
"human factor" created by Stalinism. In promoting inequality and the market, Rogovin insisted,
perestroika did not mark a break with Stalinism or the legacy of the Brezhnev era, as
was so often claimed, but rather their further realization.
One year later he wrote, "The adherents of the new elitist conceptions want to see Soviet
society with such a level of social differentiation that existed under Stalin but having gotten
rid of Stalinist repression. It is forgotten that the debauched character of these repressions
[ ] flowed from the effort to not simply restrain, but rather physically annihilate above all
those forces in the party and in the country that, though silenced, rejected the social
foundations of Stalinism."
After years of studying these questions in near-total isolation, Rogovin was finally able to
write openly about this subject. He tested the waters by first publishing "L.D. Trotsky on Art"
in August 1989 in the journal Theater . It was followed shortly thereafter by an
article entitled "The Internal Party Struggles of the 1920s: Reasons and Lessons," also
published in a journal outside of his discipline, Political Education . Moving closer
to a forum likely to be followed by his colleagues in sociology, in early 1990 Rogovin
published "L.D. Trotsky on NEP" in Economic Sciences . And finally, a few months
later, "L.D. Trotsky on Social Relations in the USSR" came out in the flagship journal of his
discipline, Sociological Research .
Rogovin's first article on the subject within his discipline reviewed Trotsky's role in
Soviet history during the 1920s and summarized his seminal work, The Revolution
Betrayed . It made clear to whom Rogovin fundamentally owed the views he had been
advancing over the course of the previous decade.
Trotsky, however, continued to be vilified by Soviet officialdom. In 1987, on the 70th
anniversary of the Russian Revolution, Gorbachev described Trotsky as "the arch-heretic of
Soviet history, an 'excessively self-assured politician who always vacillated and cheated."
As a result of Rogovin's profound sympathies for Trotskyism and efforts to place his work in
the tradition of the Left Opposition's critique of Stalinism, he was increasingly isolated from
his colleagues, several of whom entered the Yeltsin administration and helped facilitate the
eventual implementation of shock therapy, a key component of capitalist restoration in Russia.
His discipline never forgave him for his intransigence and principles. One will find almost no
mention of Rogovin or his contributions in the numerous monographs and other publications that
have come out over the last 20 years about sociology in the USSR.
But Rogovin's isolation from Soviet sociology did not undermine his capacity to work.
Rather, it coincided with the start of the publication of Was There an Alternative? In
1992, Rogovin met the International Committee of the Fourth International, and established a
close political and intellectual relationship with the world Trotskyist movement that would
intensify over the course of the next several years. This relationship was the basis upon which
Rogovin made his immense contribution to the fight to defend Trotsky and historical truth. Two
recently republished tributes to Rogovin by David
North review this history.
Despite his death twenty years ago, through his work Rogovin continues his struggle to arm
the working class with historical consciousness.
"... The American Chamber of Commerce subsequently expanded its base from around 60,000 firms in 1972 to over a quarter of a million ten years later. Jointly with the National Association of Manufacturers (which moved to Washington in 1972) it amassed an immense campaign chest to lobby Congress and engage in research. The Business Roundtable, an organization of CEOs 'committed to the aggressive pursuit of political power for the corporation', was founded in 1972 and thereafter became the centrepiece of collective pro-business action. ..."
"... Nearly half the financing for the highly respected NBER came from the leading companies in the Fortune 500 list. Closely integrated with the academic community, the NBER was to have a very significant impact on thinking in the economics departments and business schools of the major research universities. ..."
"... In order to realize this goal, businesses needed a political class instrument and a popular base. They therefore actively sought to capture the Republican Party as their own instrument. The formation of powerful political action committees to procure, as the old adage had it, 'the best government that money could buy' was an important step. ..."
"... The Republican Party needed, however, a solid electoral base if it was to colonize power effectively. It was around this time that Republicans sought an alliance with the Christian right. The latter had not been politically active in the past, but the foundation of Jerry Falwell's 'moral majority' as a political movement in 1978 changed all of that. The Republican Party now had its Christian base. ..."
"... It also appealed to the cultural nationalism of the white working classes and their besieged sense of moral righteousness. This political base could be mobilized through the positives of religion and cultural nationalism and negatively through coded, if not blatant, racism, homophobia, and anti feminism. ..."
"... The alliance between big business and conservative Christians backed by the neoconservatives consolidated, not for the first time has a social group been persuaded to vote against its material, economic, and class interests ..."
"... Any political movement that holds individual freedoms to be sacrosanct is vulnerable to incorporation into the neoliberal fold. ..."
"... Neoliberal rhetoric, with its foundational emphasis upon individual freedoms, has the power to split off libertarianism, identity politics, multiculturalism, and eventually narcissistic consumerism from the social forces ranged in pursuit of social justice through the conquest of state power. ..."
"... By capturing ideals of individual freedom and turning them against the interventionist and regulatory practices of the state, capitalist class interests could hope to protect and even restore their position. Neoliberalism was well suited to this ideological task. ..."
"... Neoliberalization required both politically and economically the construction of a neoliberal market-based populist culture of differentiated consumerism and individual libertarianism. As such it proved more than a little compatible with that cultural impulse called 'postmodernism' which had long been lurking in the wings but could now emerge full-blown as both a cultural and an intellectual dominant. This was the challenge that corporations and class elites set out to finesse in the 1980s. ..."
"... Powell argued that individual action was insufficient. 'Strength', he wrote, 'lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations'. The National Chamber of Commerce, he argued, should lead an assault upon the major institutions––universities, schools, the media, publishing, the courts––in order to change how individuals think 'about the corporation, the law, culture, and the individual'. US businesses did not lack resources for such an effort, particularly when they pooled their resources together. ..."
The American Chamber of Commerce subsequently expanded its base from around 60,000 firms in 1972 to over a quarter of a million
ten years later. Jointly with the National Association of Manufacturers (which moved to Washington in 1972) it amassed an immense
campaign chest to lobby Congress and engage in research. The Business Roundtable, an organization of CEOs 'committed to the aggressive
pursuit of political power for the corporation', was founded in 1972 and thereafter became the centrepiece of collective pro-business
action.
The corporations involved accounted for 'about one half of the GNP of the United States' during the 1970s, and they spent close
to $900 million annually (a huge amount at that time) on political matters. Think-tanks, such as the Heritage Foundation, the
Hoover Institute, the Center for the Study of American Business, and the American Enterprise Institute, were formed with corporate
backing both to polemicize and, when necessary, as in the case of the National Bureau of Economic Research, to construct serious
technical and empirical studies and political-philosophical arguments broadly in support of neoliberal policies.
Nearly half the financing for the highly respected NBER came from the leading companies in the Fortune 500 list. Closely
integrated with the academic community, the NBER was to have a very significant impact on thinking in the economics departments
and business schools of the major research universities. With abundant finance furnished by wealthy individuals (such as
the brewer Joseph Coors, who later became a member of Reagan's 'kitchen cabinet') and their foundations (for example Olin, Scaife,
Smith Richardson, Pew Charitable Trust), a flood of tracts and books, with Nozick's Anarchy State and Utopia perhaps the most widely
read and appreciated, emerged espousing neoliberal values. A TV version of Milton Friedman's Free to Choose was funded with a
grant from Scaife in 1977. 'Business was', Blyth concludes, 'learning to spend as a class.
In singling out the universities for particular attention, Powell pointed up an opportunity as well as an issue, for these
were indeed centers of anti-corporate and anti-state sentiment (the students at Santa Barbara had burned down the Bank of America
building there and ceremonially buried a car in the sands). But many students were (and still are) affluent and privileged, or
at least middle class, and in the US the values of individual freedom have long been celebrated (in music and popular culture)
as primary. Neoliberal themes could here find fertile ground for propagation. Powell did not argue for extending state power.
But business should 'assiduously cultivate' the state and when necessary use it 'aggressively and with determination'
In order to realize this goal, businesses needed a political class instrument and a popular base. They therefore actively
sought to capture the Republican Party as their own instrument. The formation of powerful political action committees to procure,
as the old adage had it, 'the best government that money could buy' was an important step. The supposedly 'progressive' campaign
finance laws of 1971 in effect legalized the financial corruption of politics.
A crucial set of Supreme Court decisions began in 1976 when it was first established that the right of a corporation to make
unlimited money contributions to political parties and political action committees was protected under the First Amendment guaranteeing
the rights of individuals (in this instance corporations) to freedom of speech.15 Political action committees could thereafter
ensure the financial domination of both political parties by corporate, moneyed, and professional association interests. Corporate
PACs, which numbered eighty-nine in 1974, had burgeoned to 1,467 by 1982.
The Republican Party needed, however, a solid electoral base if it was to colonize power effectively. It was around this time
that Republicans sought an alliance with the Christian right. The latter had not been politically active in the past, but the
foundation of Jerry Falwell's 'moral majority' as a political movement in 1978 changed all of that. The Republican Party now had
its Christian base.
It also appealed to the cultural nationalism of the white working classes and their besieged sense of moral righteousness.
This political base could be mobilized through the positives of religion and cultural nationalism and negatively through coded,
if not blatant, racism, homophobia, and anti feminism.
The alliance between big business and conservative Christians backed by the neoconservatives consolidated, not for the first
time has a social group been persuaded to vote against its material, economic, and class interests the evangelical Christians
eagerly embraced the alliance with big business and the Republican Party as a means to further promote their evangelical and moral
agenda.
Any political movement that holds individual freedoms to be sacrosanct is vulnerable to incorporation into the neoliberal fold.
The worldwide political upheavals of 1968, for example, were strongly inflected with the desire for greater personal freedoms.
This was certainly true for students, such as those animated by the Berkeley 'free speech' movement of the 1960s or who took to
the streets in Paris, Berlin, and Bangkok and were so mercilessly shot down in Mexico City shortly before the 1968 Olympic Games.
They demanded freedom from parental, educational, corporate, bureaucratic, and state constraints. But the '68 movement also had
social justice as a primary political objective.
Neoliberal rhetoric, with its foundational emphasis upon individual freedoms, has the power to split off libertarianism,
identity politics, multiculturalism, and eventually narcissistic consumerism from the social forces ranged in pursuit of social
justice through the conquest of state power. It has long proved extremely difficult within the US left, for example, to forge
the collective discipline required for political action to achieve social justice without offending the the Construction of Consent
desire of political actors for individual freedom and for full recognition and expression of particular identities. Neoliberalism
did not create these distinctions, but it could easily exploit, if not foment, them.
In the early 1970s those seeking individual freedoms and social justice could make common cause in the face of what many saw
as a common enemy. Powerful corporations in alliance with an interventionist state were seen to be running the world in individually
oppressive and socially unjust ways. The Vietnam War was the most obvious catalyst for discontent, but the destructive activities
of corporations and the state in relation to the environment, the push towards mindless consumerism, the failure to address social
issues and respond adequately to diversity, as well as intense restrictions on individual possibilities and personal behaviors
by state-mandated and 'traditional' controls were also widely resented. Civil rights were an issue, and questions of sexuality
and of reproductive rights were very much in play.
For almost everyone involved in the movement of '68, the intrusive state was
the enemy and it had to be reformed. And on that, the neoliberals could easily agree. But capitalist corporations, business, and
the market system were also seen as primary enemies requiring redress if not revolutionary transformation: hence the threat to
capitalist class power.
By capturing ideals of individual freedom and turning them against the interventionist and regulatory practices of the state,
capitalist class interests could hope to protect and even restore their position. Neoliberalism was well suited to this ideological
task. But it had to be backed up by a practical strategy that emphasized the liberty of consumer choice, not only with respect
to particular products but also with respect to lifestyles, modes of expression, and a wide range of cultural practices. Neoliberalization
required both politically and economically the construction of a neoliberal market-based populist culture of differentiated consumerism
and individual libertarianism. As such it proved more than a little compatible with that cultural impulse called 'postmodernism'
which had long been lurking in the wings but could now emerge full-blown as both a cultural and an intellectual dominant. This
was the challenge that corporations and class elites set out to finesse in the 1980s.
In the US case a confidential memo sent by Lewis Powell to the US Chamber of Commerce in August 1971. Powell, about to be elevated
to the Supreme Court by Richard Nixon, argued that criticism of and opposition to the US free enterprise system had gone too far
and that 'the time had come––indeed it is long overdue––for the wisdom, ingenuity and resources of American business to be marshaled
against those who would destroy it'.
Powell argued that individual action was insufficient. 'Strength', he wrote, 'lies in organization, in careful long-range
planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available
only through joint effort, and in the political power available only through united action and national organizations'. The National
Chamber of Commerce, he argued, should lead an assault upon the major institutions––universities, schools, the media, publishing,
the courts––in order to change how individuals think 'about the corporation, the law, culture, and the individual'. US businesses
did not lack resources for such an effort, particularly when they pooled their resources together.
"... The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity. Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash ..."
"... The use of the term "neoliberal" exploded in the 1990s, when it became closely associated with two developments, neither of which Peters's article had mentioned. One of these was financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle . The second was economic globalisation, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade agreement. Financialisation and globalisation have become the most overt manifestations of neoliberalism in today's world. ..."
"... That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant or unreal. ..."
"... homo economicus ..."
"... A version of this article first appeared in Boston Review ..."
"... Main illustration by Eleanor Shakespeare ..."
As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over
government, economic incentives over cultural norms, and private entrepreneurship over collective action. It has been used to describe
a wide range of phenomena – from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the Clinton Democrats and the UK's
New Labour to the economic opening in China and the reform of the welfare state in Sweden.
The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity.
Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality,
led to the loss of our political values and ideals, and even precipitated our current populist backlash .
We live in the age of neoliberalism, apparently. But who are neoliberalism's adherents and disseminators – the neoliberals themselves?
Oddly, you have to go back a long time to find anyone explicitly embracing neoliberalism. In 1982, Charles Peters, the longtime editor
of the political magazine Washington Monthly, published an essay titled
A Neo-Liberal's Manifesto . It makes for interesting reading 35 years later, since the neoliberalism it describes bears little
resemblance to today's target of derision. The politicians Peters names as exemplifying the movement are not the likes of Thatcher
and Reagan, but rather liberals – in the US sense of the word – who have become disillusioned with unions and big government and
dropped their prejudices against markets and the military.
The use of the term "neoliberal" exploded in the 1990s, when it became closely associated with two developments, neither of
which Peters's article had mentioned. One of these was financial deregulation, which would culminate in the 2008
financial
crash and in the still-lingering euro debacle
. The second was economic globalisation, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade
agreement. Financialisation and globalisation have become the most overt manifestations of neoliberalism in today's world.
That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant
or unreal. Who can deny that the world has experienced a decisive shift toward markets from the 1980s on? Or that centre-left
politicians – Democrats in the US, socialists and social democrats in Europe – enthusiastically adopted some of the central creeds
of Thatcherism and Reaganism, such as deregulation, privatisation, financial liberalisation and individual enterprise? Much of our
contemporary policy discussion remains infused with principles supposedly grounded in the concept of
homo economicus
, the perfectly rational human being, found in many economic theories, who always pursues his own self-interest.
But the looseness of the term neoliberalism also means that criticism of it often misses the mark. There is nothing wrong with
markets, private entrepreneurship or incentives – when deployed appropriately. Their creative use lies behind the most significant
economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism's useful ideas.
The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have
and providing cookie-cutter solutions. A proper understanding of the economics that lie behind neoliberalism would allow us to identify
– and to reject – ideology when it masquerades as economic science. Most importantly, it would help us to develop the institutional
imagination we badly need to redesign capitalism for the 21st century.
N eoliberalism is typically understood as being based on key tenets of mainstream economic science. To see those tenets without
the ideology, consider this thought experiment. A well-known and highly regarded economist lands in a country he has never visited
and knows nothing about. He is brought to a meeting with the country's leading policymakers. "Our country is in trouble," they tell
him. "The economy is stagnant, investment is low, and there is no growth in sight." They turn to him expectantly: "Please tell us
what we should do to make our economy grow."
The economist pleads ignorance and explains that he knows too little about the country to make any recommendations. He would need
to study the history of the economy, to analyse the statistics, and to travel around the country before he could say anything.
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But his hosts are insistent. "We understand your reticence, and we wish you had the time for all that," they tell him. "But isn't
economics a science, and aren't you one of its most distinguished practitioners? Even though you do not know much about our economy,
surely there are some general theories and prescriptions you can share with us to guide our economic policies and reforms."
The economist is now in a bind. He does not want to emulate those economic gurus he has long criticised for peddling their favourite
policy advice. But he feels challenged by the question. Are there universal truths in economics? Can he say anything valid or useful?
So he begins. The efficiency with which an economy's resources are allocated is a critical determinant of the economy's performance,
he says. Efficiency, in turn, requires aligning the incentives of households and businesses with social costs and benefits. The incentives
faced by entrepreneurs, investors and producers are particularly important when it comes to economic growth. Growth needs a system
of property rights and contract enforcement that will ensure those who invest can retain the returns on their investments. And the
economy must be open to ideas and innovations from the rest of the world.
But economies can be derailed by macroeconomic instability, he goes on. Governments must therefore pursue a sound
monetary policy , which means restricting the growth of liquidity to the increase in nominal money demand at reasonable inflation.
They must ensure fiscal sustainability, so that the increase in public debt does not outpace national income. And they must carry
out prudential regulation of banks and other financial institutions to prevent the financial system from taking excessive risk.
Now he is warming to his task. Economics is not just about efficiency and growth, he adds. Economic principles also carry over
to equity and social policy. Economics has little to
say about how much redistribution a society should seek. But it does tell us that the tax base should be as broad as possible, and
that social programmes should be designed in a way that does not encourage workers to drop out of the labour market.
By the time the economist stops, it appears as if he has laid out a fully fledged neoliberal agenda. A critic in the audience
will have heard all the code words: efficiency, incentives, property rights, sound money, fiscal prudence. And yet the universal
principles that the economist describes are in fact quite open-ended. They presume a capitalist economy – one in which investment
decisions are made by private individuals and firms – but not much beyond that. They allow for – indeed, they require – a surprising
variety of institutional arrangements.
So has the economist just delivered a neoliberal screed? We would be mistaken to think so, and our mistake would consist of associating
each abstract term – incentives, property rights, sound money – with a particular institutional counterpart. And therein lies the
central conceit, and the fatal flaw, of neoliberalism: the belief that first-order economic principles map on to a unique set of
policies, approximated by a Thatcher/Reagan-style agenda.
Consider property rights. They matter insofar as they allocate returns on investments. An optimal system would distribute property
rights to those who would make the best use of an asset, and afford protection against those most likely to expropriate the returns.
Property rights are good when they protect innovators from free riders, but they are bad when they protect them from competition.
Depending on the context, a legal regime that provides the appropriate incentives can look quite different from the standard US-style
regime of private property rights.
This may seem like a semantic point with little practical import; but China's phenomenal economic success is largely due to its
orthodoxy-defying institutional tinkering. China turned to markets, but did not copy western practices in property rights. Its reforms
produced market-based incentives through a series of unusual institutional arrangements that were better adapted to the local context.
Rather than move directly from state to private ownership, for example, which would have been stymied by the weakness of the prevailing
legal structures, the country relied on mixed forms of ownership that provided more effective property rights for entrepreneurs in
practice. Township and Village Enterprises (TVEs), which spearheaded Chinese economic growth during the 1980s, were collectives owned
and controlled by local governments. Even though TVEs were publicly owned, entrepreneurs received the protection they needed against
expropriation. Local governments had a direct stake in the profits of the firms, and hence did not want to kill the goose that lays
the golden eggs.
China relied on a range of such innovations, each delivering the economist's higher-order economic principles in unfamiliar institutional
arrangements. For instance, it shielded its large state sector from global competition, establishing special economic zones where
foreign firms could operate with different rules than in the rest of the economy. In view of such departures from orthodox blueprints,
describing China's economic reforms as neoliberal – as critics are inclined to do – distorts more than it reveals. If we are to call
this neoliberalism, we must surely look more kindly on the ideas behind the most dramatic
poverty reduction in history.
One might protest that China's institutional innovations were purely transitional. Perhaps it will have to converge on western-style
institutions to sustain its economic progress. But this common line of thinking overlooks the diversity of capitalist arrangements
that still prevails among advanced economies, despite the considerable homogenisation of our policy discourse.
What, after all, are western institutions? The size of the public sector in OECD countries varies, from a third of the economy
in Korea to nearly 60% in Finland. In Iceland, 86% of workers are members of a trade union; the comparable number in Switzerland
is just 16%. In the US, firms can fire workers almost at will;
French
labour laws have historically required employers to jump through many hoops first. Stock markets have grown to a total value
of nearly one-and-a-half times GDP in the US; in Germany, they are only a third as large, equivalent to just 50% of GDP.
The idea that any one of these models of taxation, labour relations or financial organisation is inherently superior to the others
is belied by the varying economic fortunes that each of these economies have experienced over recent decades. The US has gone through
successive periods of angst in which its economic institutions were judged inferior to those in Germany, Japan, China, and now possibly
Germany again. Certainly, comparable levels of wealth and productivity can be produced under very different models of capitalism.
We might even go a step further: today's prevailing models probably come nowhere near exhausting the range of what might be possible,
and desirable, in the future.
The visiting economist in our thought experiment knows all this, and recognises that the principles he has enunciated need to
be filled in with institutional detail before they become operational. Property rights? Yes, but how? Sound money? Of course, but
how? It would perhaps be easier to criticise his list of principles for being vacuous than to denounce it as a neoliberal screed.
Still, these principles are not entirely content-free. China, and indeed all countries that managed to develop rapidly, demonstrate
the utility of those principles once they are properly adapted to local context. Conversely, too many economies have been driven
to ruin courtesy of political leaders who chose to violate them. We need look no further than
Latin American populists or eastern European communist regimes to appreciate the practical significance of sound money, fiscal
sustainability and private incentives.
O f course, economics goes beyond a list of abstract, largely common-sense principles. Much of the work of economists consists
of developing
stylised models of how economies work and then confronting those models with evidence. Economists tend to think of what they
do as progressively refining their understanding of the world: their models are supposed to get better and better as they are tested
and revised over time. But progress in economics happens differently.
Economists study a social reality that is unlike the physical universe. It is completely manmade, highly malleable and operates
according to different rules across time and space. Economics
advances not by settling on the right model or theory to answer such questions, but by improving our understanding of the diversity
of causal relationships. Neoliberalism and its customary remedies – always more markets, always less government – are in fact a perversion
of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.
Does an increase in the minimum wage depress employment? Yes, if the labour market is really competitive and employers have no
control over the wage they must pay to attract workers; but not necessarily otherwise. Does trade liberalisation increase economic
growth? Yes, if it increases the profitability of industries where the bulk of investment and innovation takes place; but not otherwise.
Does more government spending increase employment? Yes, if there is slack in the economy and wages do not rise; but not otherwise.
Does monopoly harm innovation? Yes and no, depending on a whole host of market circumstances.
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and precipitated our current populist backlash' Trump signing an order to take the US out of the TPP trade pact. Photograph: AFP/Getty
In economics, new models rarely supplant older models. The basic competitive-markets model dating back to Adam Smith has been
modified over time by the inclusion, in rough historical order, of monopoly, externalities, scale economies, incomplete and asymmetric
information, irrational behaviour and many other real-world features. But the older models remain as useful as ever. Understanding
how real markets operate necessitates using different lenses at different times.
Perhaps maps offer the best analogy. Just like economic models, maps are
highly stylised representations
of reality . They are useful precisely because they abstract from many real-world details that would get in the way. But abstraction
also implies that we need a different map depending on the nature of our journey. If we are travelling by bike, we need a map of
bike trails. If we are to go on foot, we need a map of footpaths. If a new subway is constructed, we will need a subway map – but
we wouldn't throw out the older maps.
Economists tend to be very good at making maps, but not good enough at choosing the one most suited to the task at hand. When
confronted with policy questions of the type our visiting economist faces, too many of them resort to "benchmark" models that favour
the
laissez-faire
approach. Kneejerk solutions and hubris replace the richness and humility of the discussion in the seminar room. John Maynard
Keynes once defined economics as the "science of thinking in terms of models, joined to the art of choosing models which are relevant".
Economists typically have trouble with the "art" part.
This, too, can be illustrated with a parable. A journalist calls an economics professor for his view on whether free trade is
a good idea. The professor responds enthusiastically in the affirmative. The journalist then goes undercover as a student in the
professor's advanced graduate seminar on international trade. He poses the same question: is free trade good? This time the professor
is stymied. "What do you mean by 'good'?" he responds. "And good for whom?" The professor then launches into an extensive exegesis
that will ultimately culminate in a heavily hedged statement: "So if the long list of conditions I have just described are satisfied,
and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone's wellbeing."
If he is in an expansive mood, the professor might add that the effect of free trade on an economy's longterm growth rate is not
clear either, and would depend on an altogether different set of requirements.
This professor is rather different from the one the journalist encountered previously. On the record, he exudes self-confidence,
not reticence, about the appropriate policy. There is one and only one model, at least as far as the public conversation is concerned,
and there is a single correct answer, regardless of context. Strangely, the professor deems the knowledge that he imparts to his
advanced students to be inappropriate (or dangerous) for the general public. Why?
The roots of such behaviour lie deep in the culture of the economics profession. But one important motive is the zeal to display
the profession's crown jewels – market efficiency, the invisible hand, comparative advantage – in untarnished form, and to shield
them from attack by self-interested barbarians, namely
the protectionists . Unfortunately, these economists typically ignore the barbarians on the other side of the issue – financiers
and multinational corporations whose motives are no purer and who are all too ready to hijack these ideas for their own benefit.
As a result, economists' contributions to public debate are often biased in one direction, in favour of more trade, more finance
and less government. That is why economists have developed a reputation as cheerleaders for neoliberalism, even if mainstream economics
is very far from a paean to laissez-faire. The economists who let their enthusiasm for free markets run wild are in fact not being
true to their own discipline.
H ow then should we think about globalisation in order to liberate it from the grip of neoliberal practices? We must begin by
understanding the positive potential of global markets. Access to world markets in goods, technologies and capital has played an
important role in virtually all of the economic miracles of our time. China is the most recent and powerful reminder of this historical
truth, but it is not the only case. Before China, similar miracles were performed by South Korea, Taiwan, Japan and a few non-Asian
countries such as
Mauritius . All of these countries embraced globalisation rather than turn their backs on it, and they benefited handsomely.
Defenders of the existing economic order will quickly point to these examples when globalisation comes into question. What they
will fail to say is that almost all of these countries joined the world economy by violating neoliberal strictures. South Korea and
Taiwan, for instance, heavily subsidised their exporters, the former through the financial system and the latter through tax incentives.
All of them eventually removed most of their import restrictions, long after economic growth had taken off.
But none, with the sole exception of Chile in the 1980s under Pinochet, followed the neoliberal recommendation of a rapid opening-up
to imports. Chile's neoliberal
experiment eventually produced the worst economic crisis in all of Latin America. While the details differ across countries,
in all cases governments played an active role in restructuring the economy and buffering it against a volatile external environment.
Industrial policies, restrictions on capital flows and currency controls – all prohibited in the neoliberal playbook – were rampant.
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By contrast, countries that stuck closest to the neoliberal model of globalisation were sorely disappointed. Mexico provides a
particularly sad example. Following a series of macroeconomic crises in the mid-1990s, Mexico embraced macroeconomic orthodoxy, extensively
liberalised its economy, freed up the financial system, sharply reduced import restrictions and signed the North American Free Trade
Agreement (Nafta). These policies did produce macroeconomic stability and a significant rise in foreign trade and internal investment.
But where it counts – in overall productivity and economic growth –
the experiment failed
. Since undertaking the reforms, overall productivity in Mexico has stagnated, and the economy has underperformed even by the
undemanding standards of Latin America.
These outcomes are not a surprise from the perspective of sound economics. They are yet another manifestation of the need for
economic policies to be attuned to the failures to which markets are prone, and to be tailored to the specific circumstances of each
country. No single blueprint fits all.
A s Peters's 1982 manifesto attests, the meaning of neoliberalism has changed considerably over time as the label has acquired
harder-line connotations with respect to deregulation, financialisation and globalisation. But there is one thread that connects
all versions of neoliberalism, and that is the
emphasis
on economic growth . Peters wrote in 1982 that the emphasis was warranted because growth is essential to all our social and political
ends – community, democracy, prosperity. Entrepreneurship, private investment and removing obstacles that stand in the way (such
as excessive regulation) were all instruments for achieving economic growth. If a similar neoliberal manifesto were penned today,
it would no doubt make the same point.
ss="rich-link"> Globalisation: the rise and fall of an idea that swept the world Read more
Critics often point out that this emphasis on economics debases and sacrifices other important values such as equality, social
inclusion, democratic deliberation and justice. Those political and social objectives obviously matter enormously, and in some contexts
they matter the most. They cannot always, or even often, be achieved by means of technocratic economic policies; politics must play
a central role.
Still, neoliberals are not wrong when they argue that our most cherished ideals are more likely to be attained when our economy
is vibrant, strong and growing. Where they are wrong is in believing that there is a unique and universal recipe for improving economic
performance, to which they have access. The fatal flaw of neoliberalism is that it does not even get the economics right. It must
be rejected on its own terms for the simple reason that it is bad economics.
A version of this article first appeared in
Boston Review
In Christian tradition, the
love of money is condemned as a sin primarily based on texts
such as Ecclesiastes 5.10 and
1 Timothy 6:10. The Jewish and
Christian condemnation relates to avarice
and greed rather than
money itself. Christian texts (scriptures) are full of
parables and use easy to understand subjects, such as money, to convey the actual message, there are further parallels in
Solon and
Aristotle,[1]
and Massinissa-who ascribed love of
money to Hannibal and the
Carthaginians.[2].
While certain political ideologies, such as
neoliberalism, assume and promote the view that the behavior that capitalism fosters in individuals is natural to humans,[2][3]
anthropologists like
Richard Robbins
point out that there is nothing natural about this behavior - people are not naturally dispossessed to accumulate wealth and
driven by wage-labor
Neoliberalism abstract the economic sphere from other aspects of society (politics, culture, family etc., with any political
activity constituting an
intervention into the natural process of the market, for example) and assume that people make rational exchanges in the sphere
of market transactions. In reality rational economic exchanges are actually heavily influenced by pre-existing social ties and
other factors.
Under neoliberalism both the society and culture revolve around business activity (the accumulation of capital). As such,
business activity and the "free market" exchange (despite the fact that "free market" never existed in human history) are often
viewed as being absolute or "natural" in that all other human social relations revolve around these processes (or should exist to
facilitate one's ability to perform these processes
Notable quotes:
"... 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. [5] ..."
"... 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 ..."
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". [4]
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.
[5]
... ... ...
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. [43]
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. [36]
... ... ...
Historian Carter
Lindberg of Boston University has drawn parallels
between contemporary prosperity theology and the medieval indulgence trade .
[69] 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. [16]
... ... ...
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". [90]
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.
[91] 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 .
[92]
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 . [93][94]
Neo- liberalism is not dead its only just started. We are not in an era of democracy and
freedom but of Oligarchy and governmental servitude.
Less restrictions doesn't mean freedom it mean free booters, privateers , and plunderers are
given government support and handouts the only thing free is their right to take.
The pirates who plunder the most are given Hero status and those plundered are laughed at
as losers.
Looks around you governments are becoming agents of theft find ways to channel money to
those who don't need it . They say its right wing fascism but its not for all their evil the
fascists were determined to improve the lot of the people, however perversely they went about
it.
What we have today is legalised privateering.
None of the political parties today have the least intention to change a system that works
for them.
Fred, I can't remember who said it, but an observer of human systems and institutions made
the observation that unless the prevalent social, economic or political structures of the day
was not either changed or renewed, then those within the system would 'game' it; corrupting
it from within for personal benefit to the detriment of society as a whole.
This perfectly sums up neo-liberalism.
Whatever positive virtues were extolled when this ideology was adopted wholesale by so many
governments and societies (and please spare me the '-we delivered billions out of poverty!'
line, that was a positive byproduct, never the objective of neo-liberalism), it has since
become thoroughly corrupted, serving an ever shrinking percentage of society - entrenching a
super-wealthy 'ruling class' that makes a mockery of the idea of democracy.
It's time to ditch this 21st Century feudalistic construct, and replace it with something
that serves the whole of society with more justice than this current gravy train for the one
percenters.
Fully agree with the things being said here. The privatisation of essential services has been
a bloody disaster. Telecommunications, health, education energy production/distribution. Look
at what the NSW conservatives are doing the the public transport or the feds have done to our
communications, including Telstra the ABC and SBS.
But the issue is that this will just turn into an ongoing political football with each
successive conservative government trying to sell off the farm again.
These critical public services and infrastructure must be protected in law needing a
referendum to make major changes. Also their funding must be guaranteed and they must be run
at arms length from the government to reduce political interference and ensure they are
delivering the best possible service and are competitive with the huge private sector
operators.
There charter of operation and obligation to the public must be extremely robust and
clearly outline their duties of care to operate in a transparent and open fashion putting the
public interest as a priority.
The opposite of a neoliberal economic agenda isn't a progressive economic agenda, but
democratic re-engagement.
You can have democratic engagement voting for a 'neo-liberal economic agenda'. In fact
we've had it for decades.
But of course not even the Coalition believes that any more. These days they proudly
subsidise their friends and regulate their enemies in order to reshape Australia in their
preferred form.
They're politicians - they've never applied their ideological views in a pure way. This is
nothing new.
Ironically, one of the major objections to proportional representation in Australia has
been that it tends to deliver minority government, a situation that the major parties
prefer to avoid.
There's a big difference between minority government by a major party + a handful of
votes, versus a minority government by a handful of minority parties, or a major party + a
minor party. They tend to lead to the kind of instability we'd prefer to avoid.
The death of neoliberalism means
I think you've called it a bit prematurely. Both major parties here are still peddling
neo-liberalism, with policies which only differ on the margins.
"... 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 ..."
"... 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 ..."
"... 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. ..."
"... 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. ..."
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.
This post is a variant of "fake prosperity" -- yet another neoliberal myth. Also known as
"rising tidelift all boats"
The improvement of the standard of living in 90th was mainly due to economic plunder of xUSSR
and Eastern Europe as well as well as communication revolution happening simultaneously. The
period from 1990 to 2000 is known as "Triumphal March of Neoliberalism". Aftger year 200
neoliberalism went into recession and in 2008 in deep crisis. The neoliberal ideology was dead by
2008.
Indeed. That was in the time of feudalism and mercantilism.
No, it was as recently as WW2 more or less. After that it followed a confusing
period where social and political freedoms darted ahead up to the '80s when the economic
freedoms started being championed by the right: Thatcher, Reagan, etc.
That saw a liberalisation of trade and an explosive growth in international trade with
huge benefits for the whole world: developing countries like the Asian dragons have seen
their standards of living skyrocket and practically they can't get up with the developed
countries in one generation. China, and India to an extent, is following on that path with
pretty good results.
As the same time the developed countries saw a huge improvement in their standard of
living with products and services available at incredible prices. Even the countries that did
not get on this yet are benefiting and the fact that starvation in the world is less of a
problem is the proof of that for example.
The response should be a wholesale reevaluation of the way in which wealth is created
and distributed around the globe
But we know already how that is done: voluntary transactions among free agents.
That's called a free market and it is by far the most efficient way to produce wealth
humanity has ever known. Sure, we tried other methods (slavery, forced labour, communal
entities, government controlled economies, tribal economies, etc.) but nothing worked as well
as free markets.
The calls for governments' intervention in the economy is misguided and counterproductive.
They already extract about 50% of all wealth created in this country. That's way too much
since most of the money taken by governments is money diverted from productive use.
Wrong. Traditional liberalism supported both social and economic freedoms. That included
support for most of the civil rights and freedoms we enjoy today AND free trade and free
investments.
Indeed. That was in the time of feudalism and mercantilism.
I take this opportunity to draw everyone's attention to a Finnish theorist and proponent
of liberal economical and political thinking, whose treatise on liberal national economy
preceded Adam Smith by 11 years: Anders Chydenius (1729-1803).
Margaret Thatcher left office 23 years ago. The de-regulation of the City occurred in
1986, 27 years ago. Since then UK GDP has more than doubled, inflation and unemployment are
far lower, and the numbers living in extreme poverty have fallen dramatically.
This is an attractive but idealistinc notion, because the person destiny often is shaped by
forces beyond his control. Like Great Depression or WWII. The proper idea is that the society as
a whole serves as a "social security" mechanism to prevent worst outcomes. At the same time
neoliberalism accept bailout for financial sector and even demand them for goverment.
@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?
No 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.
Neoliberalism like Bolshevism is based on brainwashing and propaganda. In this case by
bought by financial elite and controlled by intelligence agencies MSM.
Notable quotes:
"... 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 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. ..."
"... 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. ..."
@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.
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.
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..."[28]
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.
about being permitted to engage in voluntary exchange of goods and services with others,
unmolested.
And if we ever had that, would it make the ideal society?
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.
TTG
Divadab Newton •
6 hours ago Being a rational actor does not mean caring only about one's own skin. Soldiers
jump on grenades knowing they will die to save their comrades. Some soldiers willingly run into
a dark cellar with a hatchet and empty weapon to confront armed murderers in order to save
innocent women and children.
There is a story in Robert Ardrey's "African Genesis" describing how a baboon troop
protected itself from the predations of leopards. An alfa male baboon attacked a leopard
one-on-one. The result of these encounters was the death of the baboon along with the severe
wounding and death of the leopard. This altruistic behavior has evolutionary value. I have the
calculus equations in my old ecology textbook explaining this value. As a species we've
inherited this altruistic trait. Parents willingly sacrifice themselves for the sake of their
children. We've gone beyond kith and kin and can also be willing to sacrifice all for the sake
of complete strangers and abstract societal goals.
Now if another trait would take better hold within our species, we would be much better
off... mercy. I have no mathematical formulas to explain that trait.
Quite. Language is the first victim of any hegemonic project. Examples abound in communism,
fascism and neoliberalism. There's nothing to argue with in this article yet, unsurprisingly,
the usual swivel-eyed brigade seem to have popped up. Perhaps your discussion of work strays
a little too close to philosophy for the unthinking. I don't know why I'm disheartened by
some of the responses, as the same voices appear btl in almost ever CIF article, but I am
somehow. Perhaps because the point of the article - the hijacking of language - is so
obviously true as to be uncontroversial to any but the ideologically purblind, yet still....
@thesingingdetective - what is an insurance policy other than a financial product where in
return for payments over a period of time a claim can be made in certain circumstances?
If anything, particularly given that the link between contributions and claims is now
nugatory, describing welfare as welfare is much more honest and much less "neoliberal". It is
a set of payments and entitlements society has agreed upon to ensure a level of welfare for
all rather than an insurance policy which each individual may claim against if they've kept
up their payments.
If an anti-neo-liberal, supportive of the article can get this so back to front, perhaps
the "debate" being posited is an empty one about language.
If you changed a few words from the Communist Manifesto, it could easily be about
neo-liberalism and leftist attitudes towards it.
"A spectre is haunting Europe; the spectre of neo-liberalism. All the leftists of old
Europe have entered into a Holy Alliance to exorcise this spectre; Toynbee and Loach;
Redgrave and Harris.
Where is the party in power that has not been decried as neo-liberalistic by its leftist
opponents on the sidelines?"
Take FE as a case study on how the coin counters have taken over the world.
Back in the dark ages of the 1980s, the maths department had 7 lecturers (2 part time) and
two people to look after the admin - there was also the Department Head (who was a lecturer)
and a Head of School. They had targets, loosely defined, but it was a rare year when there
wasn't a smattering of A grades at A level...
Then along came the coin counters, the target setters, with their management degrees and
swivel eyed certainty that 'greed is good... competition! competition! competition!' and with
them came the new professionals into the department... the 'Quality Manager'... the
'Curriculum Manager' the 'Exams Manager' the 'Deputy Exams Manager'... and the paperwork
increased to feed the beast that counts everything but knows nothing... and targets were
set.... 'Targets! Targets! Targets!... and we were all sent in search of excellence... 'teach
to the exam' 'We must meet our targets'... 'we won't use exam board 'A' because they're
tough' and the exam boards reacted to their own target culture by all simplifying. The
universities began to notice the standard of 'A' grade students (who increased) was
equivelant to a C grade of 5 years ago. However, targets were being met (on paper) quality
was maintained (on paper) we were improving year on year (on paper). However, what was going
on in the real world is that our students were being sold a pup - their level of competence
and of knowledge was very much inferior to their same grade fore bearers of just 5 years
previous
Eventually, the department became 1 full time lecturer and 4 on 'zero hour contracts' and
the Head of School became 'Chief Executive' the 'Head of Department' became 'Department
Manager' and a gap developed between those who taught and those who 'managed'... not just a
culture gap... a bloody big pay gap...
Who benefited from all this marketisation?
Not the lecturers... not the students... not the universities... not industry...not the
economy...
Who benefited? Work it out for yourselves (as I used to tell my students)
@roachclip - I am familiar with the numerous wiki sites including Wikipedia, thank you very
much. If you read the article yourself you would see it supports my point of view here.
There are loads of other examples of rarely scrutinised terms in our economic
vocabulary, for instance that bundle of terms clustered around investment and expenditure
– terms that carry with them implicit moral connotations. Investment implies an
action, even a sacrifice, undertaken for a better future. It evokes a future positive
outcome. Expenditure, on the other hand, seems merely an outgoing, a cost, a burden.
This is absolute nonsense...the terms "investment" and "expenditure" carry no moral
connotations that I can determine. Does the author accept that we need to have terms to
express each of these concepts? Perhaps she would like to come up with some alternative
suggestions for the notions of "contributing money" and "spending money"?
Seconded, its uses and abuses of the English Language second only that of the Church. A
fitting comparison in my book because they both have much in common. Both are well aware that
it is through language and the control of which that true cultural change is achieved.
Both know that this new language must be propagated as far and as wide as possible, with
saturation coverage. Control of information is a a must, people must see and they must know
only things of your choosing.
For example, back in the 4th Century AD (which is incidentally an abbreviation of the Latin
'Anno Domini', which means 'in the year of our Lord'), the church became centralised and
established under the patronage of the Roman Emperor Constantine. Part of this centralising
mission was the creation of a uniform belief system. Those that 'chose' to believe something
else were branded 'heretics'. The word 'heresy' coming from the Greek
'αἵρεσις' for 'choice'. Thus to choose to have your
own opinions was therefore deemed to be a bad thing.
As a quick aside, 'Pagan' comes from the Latin 'paganus' which means 'rural dweller'. I.e.
those beyond the remit of the urban Christian elites. 'Heathen' on the other hand is Old
English (hæðen). It simply means 'not Christian or Jewish.
When you have complete control over the flow of information, as the Church did by the 5th
Century, then you can write practically anything. This doesn't mean just writing good things
about yourself and bad things about your enemies. Rather it means that you can frame the
debate anyway you wish.
In modern times, I would argue that you can see similar things happen here. As the author
suggests, terms like 'Wealth Creator', 'Scrounger', 'Sponger', 'living on welfare', 'Growth',
'progress' and my personal favourite, 'reform', take on a whole new meaning.
Their definition of the word 'reform' and what we would see it to mean are two totally
different things, Yet since it is they that has access to the wider world and not us, then it
is their definition that gets heard. The same could be said for all the other words and their
latter day connotations.
Thus when you hear the news and you hear what passes for debate, you hear things on their
terms. Using their language with their meanings. A very sad state of affairs indeed.
Neoliberalism is in the first instance a theory of political economic practices that
proposes that human well-being can best be advanced by liberating individual entrepreneurial
freedoms and skills within an institutional framework characterized by strong private
property rights, free markets, and free trade.
You'll notice I've highlighted the word freedoms. Freedom is a word they hijacked right
from the start of the process and how they hijacked the Republican party in the USA.
For any way of thought to become dominant, a conceptual apparatus has to be advanced that
appeals to our intuitions and instincts, to our values and our desires, as well as to the
possibilities inherent in the social world we inhabit. If successful, this conceptual
apparatus becomes so embedded in common sense as to be taken for granted and not open to
question. The founding figures of neoliberal thought took political ideals of human
dignity and individual freedom as fundamental.
Concepts of dignity and individual freedom are powerful and appealing in their own right.
Such ideals empowered the dissident movements in eastern Europe and the Soviet Union before
the end of the Cold War as well as the students in Tiananmen Square. The student movements
that swept the world in 1968––from Paris and Chicago to Bangkok and Mexico
City––were in part animated by the quest for greater freedoms of speech and of
personal choice.
More generally, these ideals appeal to anyone who values the ability to make decisions for
themselves.
The idea of freedom, long embedded in the US tradition, has played a conspicuous role in
the US in recent years. '9/11' was immediately interpreted by many as an attack on it. 'A
peaceful world of growing freedom', wrote President Bush on the first anniversary of
that awful day, 'serves American long-term interests, reflects enduring American ideals
and unites America's allies.' 'Humanity', he concluded, 'holds in its hands the opportunity
to
offer freedom's triumph over all its age-old foes', and 'the United States welcomes its
responsibilities to lead in this great mission'. This language was incorporated into the US
National Defense Strategy document issued shortly thereafter. 'Freedom is the Almighty's gift
to every man and woman in this world', he later said, adding that 'as the greatest power on
earth we have an obligation to help the spread of freedom'.
When all of the other reasons for engaging in a pre-emptive war against Iraq were proven
wanting, the president appealed to the idea that the freedom conferred on Iraq was in and of
itself an adequate justification for the war. The Iraqis were free, and that was all
that really mattered. But what sort of 'freedom' is envisaged here, since, as the cultural
critic Matthew Arnold long ago thoughtfully observed, 'freedom is a very good horse to ride,
but to
ride somewhere'.To what destination, then, are the Iraqi people expected to ride the horse of
freedom donated to them by force of arms?
As Hayek quoted....
Planning and control are being attacked as a denial of freedom. Free
enterprise and private ownership are declared to be essentials of freedom.
No society built on other foundations is said to deserve to be called free.
The freedom that regulation creates is denounced as unfreedom; the justice, liberty and
welfare it offers are decried as a camouflage of slavery.
The Neoliberal idea of freedom 'thus degenerates into a mere advocacy of free
enterprise. It helps explain why neoliberalism has turned so authoritarian, forceful, and
anti-democratic at the very moment when 'humanity holds in its hands the opportunity to
offer freedom's triumph over all its age-old foes'. It makes us focus on how so many
corporations have profiteered from withholding the benefits of their
technologies, famine, and environmental disaster. It raises the worry as to whether or not
many of these calamities or
near calamities (arms races and the need to confront both real and
imagined enemies) have been secretly engineered for corporate advantage.
Political slogans can be invoked that mask specific strategies beneath vague
rhetorical devices. The word 'freedom' resonates so widely within the common-sense
understanding of Americans that it becomes 'a button that elites can press to open the door
to the masses' to justify almost anything.
Appeals to traditions and cultural values bulked large in all of this. An open project
around the restoration of economic power to a small elite would probably not gain much
popular support. But a programmatic attempt to advance the cause of individual freedoms could
appeal to a mass base and so disguise the drive to restore class power.
Fascinating article, thanks for publishing. It goes some way to explaining, not only the
tenacity of neo-liberalism, but also its ability to consolidate its power, even at the moment
when it seemed weakest. Its ability to rearticulate language and to present as natural law
what is socially constructed, shows the depth of its hold on society, economics, politics,
culture and even science.
There is a neat cross-over here between neo-liberal discourses and the use of language by
the military. Not only does this extend to the general diffusion of certain key phrases, but
I think it also runs deeper. Just as the elision of meaning in the language of war
facilitates the perpetuation of abuses and war crimes, so the neo-lib discourse permits the
perpetuation of questionable economic activity, even as this presents itself in the
unquestionable guise of "common sense".
"... I was, of course, referring to the families of the disappeared in Chile. They are, of course, relevant and should not be excluded from any arguments about neoliberalism and its effects. Nor should the families of the disappeared in Argentina, though it is less well known, the junta was entrusted with the introduction of neoliberal policies in Argentina. ..."
"... The Argentinian military coup, like those in Guatemala, Honduras, Brazil, Paraguay, Bolivia and Nicaragua, was sponsored by the US to protect and further its interests during the Cold War. By the 1970s neoliberalism was very much part of the menu; paramilitary governments were actively encouraged to practice neoliberal politics; neoliberalism was at this stage, what communism was to the Soviet Union; the ideological wing of the Cold War. You may be familiar with Operation Condor? ..."
"... It has been pretty firmly established that the Allende regime was victim of US sponsored military coup and that said coup was sponsored to protect US interests. The Chicago boys then flew into Chile to use the nation as a laboratory for the more outlandish (at the time) neoliberal policies they were unable to practice at home. ..."
"... The political class, with the aid of their subservient corporate media quislings, have taken our language apart and used it against us. We have been backed into a corner, we are told, by both Labour and Tories, that there is no choice, either rabid profiteering or penury and we have, to our everlasting shame, lapped up every word of it. ..."
"... We have become so embedded in the language of individuals, choice, contracts and competition that we cannot see any alternative. Even Adam Smith understood the difference between "economy" and "society" when he argued that labor is directly connected to public interest while business is connected to self-interest. If business took over the public sphere, Smith argued, this would be quite destructive. ..."
@finnkn - Apologies. I was, of course, referring to the families of the disappeared in Chile. They are, of course, relevant
and should not be excluded from any arguments about neoliberalism and its effects. Nor should the families of the disappeared
in Argentina, though it is less well known, the junta was entrusted with the introduction of neoliberal policies in Argentina.
The Argentinian military coup, like those in Guatemala, Honduras, Brazil, Paraguay, Bolivia and Nicaragua, was sponsored
by the US to protect and further its interests during the Cold War. By the 1970s neoliberalism was very much part of the menu;
paramilitary governments were actively encouraged to practice neoliberal politics; neoliberalism was at this stage, what communism
was to the Soviet Union; the ideological wing of the Cold War. You may be familiar with Operation Condor?
To be clear: I am arguing that the direct effects of 'actually existing neoliberalism' are very far from benign. I do not argue
that the militarisation of Central and South America are the direct consequence neoliberal theory.
@finnkn - Well I think many would. It has been pretty firmly established that the Allende regime was victim of US sponsored
military coup and that said coup was sponsored to protect US interests. The Chicago boys then flew into Chile to use the nation
as a laboratory for the more outlandish (at the time) neoliberal policies they were unable to practice at home.
Neoliberalism was first practiced in authoritarian states; the states in which neoliberalism is most deeply embedded are (surprise,
surprise) increasingly authoritarian, and neoliberalism solutions are regularly imposed on client/vulnerable states by suprastructures
such as the IMF, the EU, and the World Bank. Friedrich Hayek and Adam Smith were very clear that the potential for degeneracy
existed. We have now reached that potential; increasingly centralised authority, states within states, the denuding of democratic
institutions and crony capitalism. Neoliberalism in practice is very different to neoliberalism in practice. Rather like 'really
existing socialism' and Marxism.
works best in authoritarian states because (in practice, if not in theory
As the statistics on that link show, there are certain countries (notably Russia and the Ukraine) where the +65 age group disapprove
of the change to democracy and capitalism. In the majority, however, people of all ages remain in favour.
For 'job' read 'bribe' (keep your mouth shut or lose it), for 'management' read 'take most of the interest out of the job
for everybody else and put them on a lower scale', etc. I guess you get my drift.
It's sad that you have such a negative, self-hating attitude towards your work.
Work is usually – and certainly should be – a central source of meaning and fulfilment in human lives. And it has – or could
have – moral and creative (or aesthetic) values at its core
Spoken like a true champagne socialist in a creative industry. How do you find meaning and fulfillment, or creative values, in
emptying bins, cleaning offices, sweeping the streets and a whole load of other work which needs doing but which is repetitive,
menial and not particularly pleasant?
There are two ways to get people to do work that needs doing but wouldn't be done voluntarily: coercion or payment. I think
the second is a more healthy way to run a society.
I've thought pretty much the same myself. Democracies can be good or bad (as the Greeks knew well)...but in our politic-speak
it is used to denounce and make good; as in "Israel is the only democracy in the Middle East"...it is intended to make us feel
something good about Israel, as it humiliates the Palestinians and steals their land.
In ancient Greece....'tyrant' simply meant
'usurper' without any neccessary negative association....simply someone who had usurped political power...they recognized that
tyrannies could be good, bad or indifferent.
In Rome, dictator simply meant the cahp that took over fpr periods of six months at a time, during times of crisis.
I used to vacation in Yugoslavia in Marshall Tito's time....it was a wonderful place, beautiful, inexpensive and safe...very
very safe. What came into the power vacuum after he died in 1980...what happened to the country? I'd argue that his was a good
dictatorship or tyranny....
I'm also not too sure what the 90% of people unaffected by and uninterested in power politics in any given country feel about
the 'liberation' of Libya and Iraq from their prior dictatorships...I'm sure that plenty of people whose previously steady lives
have been wrecked, are all that thrilled.
I have recently been exercised by the right's adoption of "Social Justice". In the past it was the left and churches who talked
of social justice as a phenomenon to empower the poor and dispossessed, whether in this country or the developing world. Social
Justice was a touchstone of Faith in the City, for example, but it seems now to be the smoke screen behind which benefits are
stipped from the "undeserving poor".
Most of this crap comes from America. Crappy middle-management bureaucrats spouting "free-market" bollocks.
The efficiency of the private sector - some nob with a name badge timing how long you've been on the toilet.
Freedommm!!!!
It is not just neoliberalism. Everyone is at it - sucking the meaning out of words. Corporate bullshit, public sector bullshit.
Being customers of your own government is a crime that everyone is guilty of. This is what Orwell railed against decades ago,
and it has got worse.
Case in point; just look at the way in which the Cameron set about co-opting words and phrases justifiably applied to his own
regime and repurposed them against his detractors.
For example, people who took a stand against the stealth privatisation of the NHS were branded as "vested interests", quite
unlike the wholesome MPs who voted for the NHS bill who, despite the huge sums of money they received from the private healthcare
lobby, we are encouraged to believe were acting in our best interests by selling our health service to their corporate paymasters.
Or the farcical attempt to rebrand female Tory MPs as "feminists" despite their anti-social mobility, anti-equality, anti-human
rights and anti-abortion views.
The political class, with the aid of their subservient corporate media quislings, have taken our language apart and used
it against us. We have been backed into a corner, we are told, by both Labour and Tories, that there is no choice, either rabid
profiteering or penury and we have, to our everlasting shame, lapped up every word of it.
@Obelisk1 - You have single-handedly proven Massey's argument. We have become so embedded in the language of individuals,
choice, contracts and competition that we cannot see any alternative. Even Adam Smith understood the difference between "economy"
and "society" when he argued that labor is directly connected to public interest while business is connected to self-interest.
If business took over the public sphere, Smith argued, this would be quite destructive.
Our whole conversation seemed somehow reduced, my experience of it belittled into one of commercial transaction. My relation
to the gallery and to this engaging person had become one of instrumental market exchange.
But in the eyes of the economic right, that is precisely the case. Adjectives like altruistic, caring, selfless, empathy and
sympathy are simply not in their vocabulary. They are only ever any of those things provided they can see some sort of beneficial
payback at the end.
maxfisher -> Venebles 11 Jun 2013 06:20
@Venebles - I was simply joining many commentators in the mire. Those that dispute the neoliberal worldview are routinely dismissed
as marxists. I thought I'd save you all the energy, duck.
I'm not sure that the families of the disappeared of Chile and Argentina would concur with you benign view of neoliberalism
and its effects.
"... Once again I'd like to point out that Ralph's idolization of "Mom and Pop" businesses is its own form of unempirical ideology. Small businesses in reality tend to pay lower wages, have less benefits, and can get away with less worker protections. For example there are all sorts of statutes that do not need to be enforced until a business has 15-20 workers. There never has been and never will be such thing as exploitation-free capitalism. ..."
Market fundamentalism's ideological tyranny is metastasizing, afflicting the young,
silencing politicians and hoodwinking the media. Too few progressives have a handle on the
powerful arguments that can be made to counter market fundamentalism. It's time to confront the
myths with compelling empirical reality that deconstructs and destroys the plutocratic hoax. A
roundtable recorded at the Carnegie Institution of Washington DC, on October 19, 2018
Market fundamentalism's ideological tyranny is metastasizing, afflicting the young,
silencing politicians and hoodwinking the media. Too few progressives have a handle on the
powerful arguments that can be made to counter market fundamentalism. It's time to confront the
myths with compelling empirical reality that deconstructs and destroys the plutocratic hoax. A
roundtable recorded at the Carnegie Institution of Washington DC, on October 19, 2018
I am so delighted to see this terminology catching on, because I see great parallels
between the extremism of Market Fundamentalism and Religious Fundamentalism. The cult of
American Economics is just as hostile to outside ideas, such as Marxist Economics as any
religious cult is. The fact is that talking about the social good was so taboo due to the red
scare from the time of the Russian revolutions, that no US University or Business school
taught a single course covering Marxist Economic Theory until at least 2010.
The business ideologs go into the schools, the exact same way the 'Officer Friendly' Pigs
go into the schools -- to sell the various lies and crimes of the exploitative capitalist
order.
What happened to the older ~8 hr video? Once again I'd like to point out that Ralph's
idolization of "Mom and Pop" businesses is its own form of unempirical ideology. Small
businesses in reality tend to pay lower wages, have less benefits, and can get away with less
worker protections. For example there are all sorts of statutes that do not need to be
enforced until a business has 15-20 workers. There never has been and never will be such
thing as exploitation-free capitalism.
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.
Technology is dominated by two types of people: those who understand what they do not manage,
and those who manage what they do not understand. -- Archibald Putt
Neoliberal PHBs like talk about KJLOCs, error counts, tickets closed and other types of
numerical measurements designed so that they can be used by lower-level PHBs to report fake
results to higher level PHBs. These attempts to quantify 'the quality' and volume of work
performed by software developers and sysadmins completely miss the point. For software is can
lead to code bloat.
The number of tickets taken and resolved in a specified time period probably the most ignorant way to measure performance of
sysadmins. For sysadmin you can invent creative creating way of generating and resolving
tickets. And spend time accomplishing fake task, instead of thinking about real problem that
datacenter face. Using Primitive measurement strategies devalue the work being performed by Sysadmins and programmers. They focus
on the wrong things. They create the boundaries that are supposed to contain us in a manner that is comprehensible to the PHB who
knows nothing about real problems we face.
Notable quotes:
"... Technology is dominated by two types of people: those who understand what they do not manage, and those who manage what they do not understand. ..."
In an advanced research or development project, success or failure is largely determined
when the goals or objectives are set and before a manager is chosen. While a hard-working and
diligent manager can increase the chances of success, the outcome of the project is most
strongly affected by preexisting but unknown technological factors over which the project
manager has no control. The success or failure of the project should not, therefore, be used as
the sole measure or even the primary measure of the manager's competence.
Putt's Law Is promulgated
Without an adequate competence criterion for technical managers, there is no way to
determine when a person has reached his level of incompetence. Thus a clever and ambitious
individual may be promoted from one level of incompetence to another. He will ultimately
perform incompetently in the highest level of the hierarchy just as he did in numerous lower
levels. The lack of an adequate competence criterion combined with the frequent practice of
creative incompetence in technical hierarchies results in a competence inversion, with the most
competent people remaining near the bottom while persons of lesser talent rise to the top. It
also provides the basis for Putt's Law, which can be stated in an intuitive and nonmathematical
form as follows:
Technology is dominated by two types of people: those who understand what they do not
manage, and those who manage what they do not understand.
As in any other hierarchy, the majority of persons in technology neither understand nor
manage much of anything. This, however, does not create an exception to Putt's Law, because
such persons clearly do not dominate the hierarchy. While this was not previously stated as a
basic law, it is clear that the success of every technocrat depends on his ability to deal with
and benefit from the consequences of Putt's Law.
These 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?
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.
dropped 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.
I 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.
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".
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."
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."
"... 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. ..."
"... The United States witnessed the ruling class take full control of the state, the workplace and distribution of social expenditures. ..."
"... 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 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. ..."
"... 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. ..."
"... "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. ..."
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.
Historical Context
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.
"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!
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.
" 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.
The 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
less
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 .
This 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.
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.
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.
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.
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
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 .
Much of the time they deserve it because they don't go to college.
Wrong.
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."
"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.
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.
"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)."
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.
"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?
"... The dominant corporate U.S. media routinely exaggerates the degree of difference and choice between the candidates run by the nation's two corporate-dominated political organizations, the Democrats and the Republicans. It never notes that the two reigning parties agree about far more than they differ on, particularly when it comes to fundamental and related matters of business class power and American Empire. It shows U.S. protestors engaged in angry confrontations with police and highlights isolated examples of protestor violence but it downplays peaceful protest and never pays serious attention to the important societal and policy issues that have sparked protest or to the demands and recommendations advanced by protest movements. ..."
"... Newscasters who want to keep their careers afloat learn the fine art of evasion with great skill they skirt around the most important parts of a story. With much finesse, they say a lot about very little, serving up heaps of junk news filled with so many empty calories and so few nutrients. Thus do they avoid offending those who wield politico-economic power while giving every appearance of judicious moderation and balance. It is enough to take your breath away ..."
"... In U.S. "mainstream" media, Washington's aims are always benevolent and democratic. Its clients and allies are progressive, its enemies are nefarious, and its victims are invisible and incidental. The U.S. can occasionally make "mistakes" and "strategic blunders" on the global stage, but its foreign policies are never immoral, criminal, or imperialist in nature as far as that media is concerned. This is consistent with the doctrine of "American Exceptionalism," according to which the U.S., alone among great powers in history, seeks no selfish or imperial gain abroad. It is consistent also with "mainstream" U.S. media's heavy reliance on "official government sources" (the White House, the Defense Department, and the State Department) and leading business public relations and press offices for basic information on current events. ..."
"... U.S. citizens regularly see images of people who are angry at the U.S. around the world. The dominant mass media never gives them any serious discussion of the US policies and actions that create that anger. Millions of Americans are left to ask in childlike ignorance "Why do they hate us? What have we done?" ..."
"... If transmitting Washington's lies about Iraq were something to be fired about, then U.S. corporate media authorities would have to get rid of pretty much of all their top broadcasters. ..."
"... The U.S. corporate media's propagandistic service to the nation's reigning and interrelated structures of Empire and inequality is hardly limited to its news and public affairs wings. Equally if not more significant in that regard is that media's vast "entertainment" sector, which is loaded with political and ideological content ..."
"... Seen broadly in its many-sided and multiply delivered reality, U.S. corporate media's dark, power-serving mission actually goes further than the manufacture of consent. A deeper goal is the manufacture of mass idiocy, with "idiocy" understood in the original Greek and Athenian sense not of stupidity but of childish selfishness and willful indifference to public affairs and concerns. (An "idiot" in Athenian democracy was characterized by self-centeredness and concerned almost exclusively with private instead of public affairs.). As the U.S. Latin Americanist Cathy Schneider noted, the U.S.-backed military coup and dictatorship headed by Augusto Pinochet "transformed Chile, both culturally and politically, from a country of active participatory grassroots communities, to a land of disconnected, apolitical individuals"[7] – into a nation of "idiots" understood in this classic Athenian sense. ..."
"... To be sure, a narrow and reactionary sort of public concern and engagement does appear and take on a favorable light in this corporate media culture. It takes the form of a cruel, often even sadistically violent response to unworthy and Evil Others who are perceived as failing to obey prevalent national and neoliberal cultural codes. Like the U.S. ruling class that owns it, the purportedly anti-government corporate media isn't really opposed to government as such. It's opposed to what the French sociologist Pierre Bourdieu called "the left hand of the state" – the parts of the public sector that serve the social and democratic needs of the non-affluent majority. ..."
"... The generation of mass idiocy in the more commonly understood sense of sheer stupidity is also a central part of U.S. "mainstream" media's mission. Nowhere is this more clearly evident than in the constant barrage of rapid-fire advertisements that floods U.S. corporate media. ..."
"... There's nothing surprising about the fact that the United States' supposedly "free" and "independent" media functions as a means of mass indoctrination for the nation's economic and imperial elite ..."
"... A second explanation is the power of advertisers. U.S. media managers are naturally reluctant to publish or broadcast material that might offend the large corporations that pay for broadcasting by purchasing advertisements. ..."
"... A third great factor is U.S. government media policy and regulation on behalf of oligopolistic hyper-concentration. The U.S. corporate media is hardly a "natural" outcome of a "free market." It's the result of government protections and subsidies that grant enormous "competitive" advantages to the biggest and most politically/plutocratically influential media firms. ..."
"... In this writer's experience, the critical Left analysis of the U.S. "mainstream" media as a tool for "manufacturing consent" and idiocy developed above meets four objections from defenders of the U.S. media system, A first objection notes that the New York Times, the Washington Post, the Financial Times (FT), the Wall Street Journal (WSJ) and other major U.S. corporate media outlets produce a significant amount of, informative, high-quality and often candid reporting and commentary that Left thinkers and activists commonly cite to support their cases for radical and democratic change. ..."
"... The observation that Leftists commonly use and cite information from the corporate media they harshly criticize is correct but it is easy to account for the apparent anomaly within the critical Left framework by noting that that media crafts two very different versions of U.S. policy, politics, society, "life," and current events for two different audiences. Following the work of the brilliant Australian propaganda critic Alex Carey, we can call the first audience the "grassroots."[14] It comprises the general mass of working and lower-class citizens. ..."
"... The second target group comprises the relevant political class of U.S. citizens from at most the upper fifth of society. This is who reads the Times, the Post, WSJ, and FT, for the most part. Call this audience (again following Carey) the "treetops": the "people who matter" and who deserve and can be trusted with something more closely approximating the real story because their minds have been properly disciplined and flattered by superior salaries, significant on-the-job labor autonomy, and "advanced" and specialized educational and professional certification. ..."
"... To everyday Americans' credit, corporate media has never been fully successful in stamping out popular resistance and winning over the hearts and minds of the U.S. populace. ..."
"... The U.S. elite is no more successful in its utopian (or dystopian) quest to control every American heart and mind than it is in its equally impossible ambition of managing events across a complex planet from the banks of the Potomac River in Washington D.C ..."
Consistent with its possession as a leading and money-making asset of the nation's wealthy
elite, the United States corporate and commercial mass media is a bastion of power-serving
propaganda and deadening twaddle designed to keep the U.S. citizenry subordinated to capital
and the imperial U.S. state. It regularly portrays the United States as a great model of
democracy and equality. It sells a false image of the U.S. as a society where the rich enjoy
opulence because of hard and honest work and where the poor are poor because of their laziness
and irresponsibility. The nightly television news broadcasts and television police and law and
order dramas are obsessed with violent crime in the nation's Black ghettoes and Latino barrios,
but they never talk about the extreme poverty, the absence of opportunity imposed on those
neighborhoods by the interrelated forces of institutional racism, capital flight, mass
structural unemployment, under-funded schools, and mass incarceration. The nightly television
weather reports tells U.S. citizens of ever new record high temperatures and related forms of
extreme weather but never relate these remarkable meteorological developments to anthropogenic
climate change.
The dominant corporate U.S. media routinely exaggerates the degree of difference and choice
between the candidates run by the nation's two corporate-dominated political organizations, the
Democrats and the Republicans. It never notes that the two reigning parties agree about far
more than they differ on, particularly when it comes to fundamental and related matters of
business class power and American Empire. It shows U.S. protestors engaged in angry
confrontations with police and highlights isolated examples of protestor violence but it
downplays peaceful protest and never pays serious attention to the important societal and
policy issues that have sparked protest or to the demands and recommendations advanced by
protest movements.
As the prolific U.S. Marxist commentator Michael Parenti once remarked, US "Newscasters who
want to keep their careers afloat learn the fine art of evasion with great skill they skirt
around the most important parts of a story. With much finesse, they say a lot about very
little, serving up heaps of junk news filled with so many empty calories and so few nutrients.
Thus do they avoid offending those who wield politico-economic power while giving every
appearance of judicious moderation and balance. It is enough to take your breath away." [1]
Selling Empire
U.S. newscasters and their print media counterparts routinely parrot and disseminate the
false foreign policy claims of the nation's imperial elite. Earlier this year, U.S. news
broadcasters dutiful relayed to U.S. citizens the Obama administration's preposterous assertion
that social-democratic Venezuela is a repressive, corrupt, and authoritarian danger to its own
people and the U.S. No leading national U.S. news outlet dared to note the special absurdity of
this charge in the wake of Obama and other top U.S. officials' visit to Riyadh to guarantee
U.S. support for the new king of Saudi Arabia, the absolute ruler of a leading U.S. client
state that happens to be the most brutally oppressive and reactionary government on Earth.
In U.S. "mainstream" media, Washington's aims are always benevolent and democratic. Its
clients and allies are progressive, its enemies are nefarious, and its victims are invisible
and incidental. The U.S. can occasionally make "mistakes" and "strategic blunders" on the
global stage, but its foreign policies are never immoral, criminal, or imperialist in nature as
far as that media is concerned. This is consistent with the doctrine of "American
Exceptionalism," according to which the U.S., alone among great powers in history, seeks no
selfish or imperial gain abroad. It is consistent also with "mainstream" U.S. media's heavy
reliance on "official government sources" (the White House, the Defense Department, and the
State Department) and leading business public relations and press offices for basic information
on current events.
As the leading Left U.S. intellectuals Noam Chomsky and Edward Herman showed in their
classic text Manufacturing Consent: The Political Economy of the Mass Media (1988), Orwellian
double standards are rife in the dominant U.S. media's coverage and interpretation of global
affairs. Elections won in other countries by politicians that Washington approves because those
politicians can be counted on to serve the interests of U.S. corporations and the military are
portrayed in U.S. media as good and clean contests. But when elections put in power people who
can't be counted on to serve "U.S. interests," (Hugo Chavez and Nicolas Maduro for example),
then U.S. corporate media portrays the contests as "rigged" and "corrupt." When Americans or
people allied with Washington are killed or injured abroad, they are "worthy victims" and
receive great attention and sympathy in that media. People killed, maimed, displaced and
otherwise harmed by the U.S. and U.S. clients and allies are anonymous and "unworthy victims"
whose experience elicits little mention or concern.[2]
U.S. citizens regularly see images of people who are angry at the U.S. around the world. The
dominant mass media never gives them any serious discussion of the US policies and actions that
create that anger. Millions of Americans are left to ask in childlike ignorance "Why do they
hate us? What have we done?"
In February of 2015, an extraordinary event occurred in U.S. news media – the firing
of a leading national news broadcaster, Brian Williams of NBC News. Williams lost his position
because of some lies he told in connection with the U.S. invasion of Iraq. A naïve
outsider might think that Williams was fired because he repeated the George W. Bush
administration's transparent fabrications about Saddam Hussein's weapons of mass destruction
and Saddam's supposed connection to 9/11. Sadly but predictably enough, that wasn't his
problem. Williams lost his job because he falsely boasted that he had ridden on a helicopter
that was forced down by grenade fire during the initial U.S. invasion. If transmitting
Washington's lies about Iraq were something to be fired about, then U.S. corporate media
authorities would have to get rid of pretty much of all their top broadcasters.
More than Entertainment
The U.S. corporate media's propagandistic service to the nation's reigning and interrelated
structures of Empire and inequality is hardly limited to its news and public affairs wings.
Equally if not more significant in that regard is that media's vast "entertainment" sector,
which is loaded with political and ideological content but was completely ignored in Herman and
Chomsky's groundbreaking Manufacturing Consent. [3] One example is the Hollywood movie "Zero
Dark Thirty," a 2012 "action thriller" that dramatized the United States' search for Osama
bin-Laden after the September 11, 2001 jetliner attacks. The film received critical acclaim and
was a box office-smash. It was also a masterpiece of pro-military, pro-CIA propaganda,
skillfully portraying U.S. torture practices "as a dirty, ugly business that is necessary to
protect America" (Glenn Greenwald[4]) and deleting the moral debate that erupted over the CIA's
"enhanced interrogation techniques." Under the guise of a neutral, documentary-like
façade, Zero Dark Thirty normalized and endorsed torture in ways that were all the more
effective because of its understated, detached, and "objective" veneer. The film also marked a
distressing new frontier in U.S. military-"embedded" filmmaking whereby the movie-makers
receive technical and logistical support from the Pentagon in return for producing elaborate
public relations on the military's behalf.
The 2014-15 Hollywood blockbuster American Sniper is another example. The film's audiences
is supposed to marvel at the supposedly noble feats, sacrifice, and heroism of Chris Kyle, a
rugged, militantly patriotic, and Christian-fundamentalist Navy SEALS sniper who participated
in the U.S. invasion of Iraq to fight "evil" and to avenge the al Qaeda jetliner attacks of
September 11, 2001. Kyle killed 160 Iraqis over four tours of "duty" in "Operational Iraqi
Freedom." Viewers are never told that the Iraqi government had nothing to do with the 9/11
attacks or al Qaeda or that the U.S. invasion was one of the most egregiously criminal and
brazenly imperial and mass-murderous acts in the history of international violence. Like Zero
Dark Thirty's apologists, American Sniper's defenders claim that the film takes a neutral
perspective of "pure storytelling," with no ideological bias. In reality, the movie is filled
with racist and imperial distortions, functioning as flat-out war propaganda.[5]
These are just two among many examples that could be cited of U.S. "entertainment" media's
regular service to the American Empire. Hollywood and other parts of the nation's vast
corporate entertainment complex plays the same power-serving role in relation to domestic
("homeland") American inequality and oppression structures of class and race. [6]
Manufacturing Idiocy
Seen broadly in its many-sided and multiply delivered reality, U.S. corporate media's dark,
power-serving mission actually goes further than the manufacture of consent. A deeper goal is
the manufacture of mass idiocy, with "idiocy" understood in the original Greek and Athenian
sense not of stupidity but of childish selfishness and willful indifference to public affairs
and concerns. (An "idiot" in Athenian democracy was characterized by self-centeredness and
concerned almost exclusively with private instead of public affairs.). As the U.S. Latin
Americanist Cathy Schneider noted, the U.S.-backed military coup and dictatorship headed by
Augusto Pinochet "transformed Chile, both culturally and politically, from a country of active
participatory grassroots communities, to a land of disconnected, apolitical individuals"[7]
– into a nation of "idiots" understood in this classic Athenian sense.
In the U.S., where violence is not as readily available to elites as in 1970s Latin America,
corporate America seeks the same terrible outcome through its ideological institutions,
including above all its mass media. In U.S. movies, television sit-coms, television dramas,
television reality-shows, commercials, state Lottery advertisements, and video games, the
ideal-type U.S. citizen is an idiot in this classic sense: a person who cares about little more
than his or her own well-being, consumption, and status. This noble American idiot is
blissfully indifferent to the terrible prices paid by others for the maintenance of reigning
and interrelated oppressions structures at home and abroad.
A pervasive theme in this media culture is the notion that people at the bottom of the
nation's steep and interrelated socioeconomic and racial pyramids are the "personally
irresponsible" and culturally flawed makers of their own fate. The mass U.S. media's version of
Athenian idiocy "can imagine," in the words of the prolific Left U.S. cultural theorist Henry
Giroux "public issues only as private concerns." It works to "erase the social from the
language of public life so as to reduce" questions of racial and socioeconomic disparity to
"private issues of individual character and cultural depravity. Consistent with "the central
neoliberal tenet that all problems are private rather than social in nature," it portrays the
only barriers to equality and meaningful democratic participation as "a lack of principled
self-help and moral responsibility" and bad personal choices by the oppressed. Government
efforts to meaningfully address and ameliorate (not to mention abolish) societal disparities of
race, class, gender, ethnicity, nationality and the like are portrayed as futile,
counterproductive, naïve, and dangerous.[8]
To be sure, a narrow and reactionary sort of public concern and engagement does appear and
take on a favorable light in this corporate media culture. It takes the form of a cruel, often
even sadistically violent response to unworthy and Evil Others who are perceived as failing to
obey prevalent national and neoliberal cultural codes. Like the U.S. ruling class that owns it,
the purportedly anti-government corporate media isn't really opposed to government as such.
It's opposed to what the French sociologist Pierre Bourdieu called "the left hand of the state"
– the parts of the public sector that serve the social and democratic needs of the
non-affluent majority. It celebrates and otherwise advances the "right hand of the state"[9]:
the portions of government that serve the opulent minority, dole out punishment for the poor,
and attacks those perceived as nefariously resisting the corporate and imperial order at home
and abroad. Police officers, prosecutors, military personnel, and other government authorities
who represent the "right hand of the state" are heroes and role models in this media. Public
defenders, other defense attorneys, civil libertarians, racial justice activists, union
leaders, antiwar protesters and the like are presented at best as naïve and irritating
"do-gooders" and at worst as coddlers and even agents of evil.
The generation of mass idiocy in the more commonly understood sense of sheer stupidity is
also a central part of U.S. "mainstream" media's mission. Nowhere is this more clearly evident
than in the constant barrage of rapid-fire advertisements that floods U.S. corporate media. As
the American cultural critic Neil Postman noted thirty years ago, the modern U.S. television
commercial is the antithesis of the rational economic consideration that early Western
champions of the profits system claimed to be the enlightened essence of capitalism. "Its
principal theorists, even its most prominent practitioners," Postman noted, "believed
capitalism to be based on the idea that both buyer and seller are sufficiently mature,
well-informed, and reasonable to engage in transactions of mutual self-interest." Commercials
make "hash" out of this idea. They are dedicated to persuading consumers with wholly irrational
claims. They rely not on the reasoned presentation of evidence and logical argument but on
suggestive emotionalism, infantilizing manipulation, and evocative, rapid-fire imagery.[10]
The same techniques poison U.S. electoral politics. Investment in deceptive and manipulative
campaign commercials commonly determines success or failure in mass-marketed election contests
between business-beholden candidates that are sold to the audience/electorate like brands of
toothpaste and deodorant. Fittingly enough, the stupendous cost of these political
advertisements is a major factor driving U.S. campaign expenses so high (the 2016 U.S.
presidential election will cost at least $5 billion) as to make candidates ever more dependent
on big money corporate and Wall Street donors.
Along the way, mass cognitive competence is assaulted by the numbing, high-speed ubiquity of
U.S. television and radio advertisements. These commercials assault citizens' capacity for
sustained mental focus and rational deliberation nearly sixteen minutes of every hour on cable
television, with 44 percent of the individual ads now running for just 15 seconds. This is a
factor in the United States' long-bemoaned epidemic of "Attention Deficit Disorder."
Seventy years ago, the brilliant Dutch left Marxist Anton Pannekoek offered some chilling
reflections on the corporate print and broadcast media's destructive impact on mass cognitive
and related social resistance capacities in the United States after World War II:
"The press is of course entirely in hands of big capital [and it] dominates the spiritual
life of the American people. The most important thing is not even the hiding of all truth about
the reign of big finance. Its aim still more is the education to thoughtlessness. All attention
is directed to coarse sensations, everything is avoided that could arouse thinking. Papers are
not meant to be read – the small print is already a hindrance – but in a rapid
survey of the fat headlines to inform the public on unimportant news items, on family triflings
of the rich, on sexual scandals, on crimes of the underworld, on boxing matches. The aim of the
capitalist press all over the world, the diverting of the attention of the masses from the
reality of social development, nowhere succeed with such thoroughness as in America."
"Still more than by the papers the masses are influenced by broadcasting and film. These
products of most perfect science, destined at one time to the finest educational instruments of
mankind, now in the hands of capitalism have been turned into the strongest means to uphold its
rule by stupefying the mind. Because after nerve-straining fatigue the movie offers relaxation
and distraction by means of simple visual impressions that make no demand on the intellect, the
masses get used to accepting thoughtlessly all its cunning and shrewd propaganda. It reflects
the ugliest sides of middle-class society. It turns all attention either to sexual life, in
this society – by the absence of community feelings and fight for freedom – the
only source of strong passions, or to brute violence; masses educated to rough violence instead
of to social knowledge are not dangerous to capitalism "[11]
Pannekoek clearly saw an ideological dimension (beyond just diversion and stupefaction) in
U.S. mass media's "education to thoughtlessness" through movies as well as print
sensationalism. He would certainly be impressed and perhaps depressed by the remarkably
numerous, potent, and many-sided means of mass distraction and indoctrination that are
available to the U.S. and global capitalist media in the present digital and Internet era.
The "entertainment" wing of its vast corporate media complex is critical to the considerable
"soft" ideological "power" the U.S. exercises around the world even as its economic hegemony
wanes in an ever more multipolar global system (and as its "hard" military reveals significant
limits within and beyond the Middle East). Relatively few people beneath the global capitalist
elite consume U.S. news and public affairs media beyond the U.S., but "American" (U.S.) movies,
television shows, video games, communication devices, and advertising culture are ubiquitous
across the planet.
Explaining "Mainstream" Media Corporate Ownership
There's nothing surprising about the fact that the United States' supposedly "free" and
"independent" media functions as a means of mass indoctrination for the nation's economic and
imperial elite. The first and most important explanation for this harsh reality is concentrated
private ownership – the fundamental fact that that media is owned primarily by giant
corporations representing wealthy interests who are deeply invested in U.S. capitalism and
Empire. Visitors to the U.S. should not be fooled by the large number and types of channels and
stations on a typical U.S. car radio or television set or by the large number and types of
magazines and books on display at a typical Barnes & Noble bookstore. Currently in the
U.S., just six massive and global corporations – Comcast, Viacom, Time Warner, CBS, The
News Corporation and Disney – together control more than 90 percent of the nation's print
and electronic media, including cable television, airwaves television, radio, newspapers,
movies, video games, book publishing, comic books, and more. Three decades ago, 50 corporations
controlled the same amount of U.S. media.
Each of the reigning six companies is a giant and diversified multi-media conglomerate with
investments beyond media, including "defense" (the military). Asking reporters and commentators
at one of those giant corporations to tell the unvarnished truth about what's happening in the
U.S. and the world is like asking the company magazine published by the United Fruit Company to
the tell the truth about working conditions in its Caribbean and Central American plantations
in the 1950s. It's like asking the General Motors company newspaper to tell the truth about
wages and working conditions in GM's auto assembly plants around the world.
As the nation's media becomes concentrated into fewer corporate hands, media personnel
become ever more insecure in their jobs because they have fewer firms to whom to sell their
skills. That makes them even less willing than they might have been before to go outside
official sources, to question the official line, and to tell the truth about current events and
the context in which they occur.
Advertisers
A second explanation is the power of advertisers. U.S. media managers are naturally
reluctant to publish or broadcast material that might offend the large corporations that pay
for broadcasting by purchasing advertisements. As Chomsky has noted in a recent interview,
large corporations are not only the major producers of the United States' mass and commercial
media. They are also that media's top market, something that deepens the captivity of nation's
supposedly democratic and independent media to big capital:
"The reliance of a journal on advertisers shapes and controls and substantially determines
what is presented to the public the very idea of advertiser reliance radically distorts the
concept of free media. If you think about what the commercial media are, no matter what, they
are businesses. And a business produces something for a market. The producers in this case,
almost without exception, are major corporations. The market is other businesses –
advertisers. The product that is presented to the market is readers (or viewers), so these
are basically major corporations providing audiences to other businesses, and that
significantly shapes the nature of the institution."[12]
At the same time, both U.S. corporate media managers and the advertisers who supply revenue
for their salaries are hesitant to produce content that might alienate the affluent people who
count for an ever rising share of consumer purchases in the U.S. It is naturally those with the
most purchasing power who are naturally most targeted by advertisers.
Government Policy
A third great factor is U.S. government media policy and regulation on behalf of
oligopolistic hyper-concentration. The U.S. corporate media is hardly a "natural" outcome of a
"free market." It's the result of government protections and subsidies that grant enormous
"competitive" advantages to the biggest and most politically/plutocratically influential media
firms. Under the terms of the 1934 Communications Act and the 1996 Telecommunications Act,
commercial, for-profit broadcasters have almost completely free rein over the nation's airwaves
and cable lines. There is no substantive segment of the broadcast spectrum set aside for truly
public interest and genuinely democratic, popular not-for profit media and the official
"public" broadcasting networks are thoroughly captive to corporate interests and to right-wing
politicians who take giant campaign contributions from corporate interests. Much of the 1996
bill was written by lobbyists working for the nations' leading media firms. [13]
A different form of state policy deserves mention. Under the Obama administration, we have
seen the most aggressive pursuit and prosecution in recent memory of U.S. journalists who step
outside the narrow parameters of pro-U.S. coverage and commentary – and of the
whistleblowers who provide them with leaked information. That is why Edward Snowden lives in
Russia, Glenn Greenwald lives in Brazil, Chelsea Manning is serving life in a U.S. military
prison, and Julian Assange is trapped in the Ecuadorian Embassy in London. A leading New York
Times reporter and author, James Risen, has been threatened with imprisonment by the White
House for years because of his refusal to divulge sources.
Treetops v. Grassroots Audiences
In this writer's experience, the critical Left analysis of the U.S. "mainstream" media as a
tool for "manufacturing consent" and idiocy developed above meets four objections from
defenders of the U.S. media system, A first objection notes that the New York Times, the
Washington Post, the Financial Times (FT), the Wall Street Journal (WSJ)
and other major U.S. corporate media outlets produce a significant amount of, informative,
high-quality and often candid reporting and commentary that Left thinkers and activists
commonly cite to support their cases for radical and democratic change. Left U.S. media critics
like Chomsky and Herman are said to be hypocrites because they obviously find much that is of
use as Left thinkers in the very media that they criticize for distorting reality in accord
with capitalist and imperial dictates.
The observation that Leftists commonly use and cite information from the corporate media
they harshly criticize is correct but it is easy to account for the apparent anomaly within the
critical Left framework by noting that that media crafts two very different versions of U.S.
policy, politics, society, "life," and current events for two different audiences. Following
the work of the brilliant Australian propaganda critic Alex Carey, we can call the first
audience the "grassroots."[14] It comprises the general mass of working and lower-class
citizens. As far as the business elites who own and manage the U.S. mass media and the
corporations that pay for that media with advertising purchases are concerned, this "rabble"
cannot be trusted with serious, candid, and forthright information. Its essential role in
society is to keep quiet, work hard, be entertained (in richly propagandistic and ideological
ways, we should remember), buy things, and generally do what they're told. They are to leave
key societal decisions to those that the leading 20th century U.S. public intellectual and
media-as-propaganda enthusiast Walter Lippman called "the responsible men." That "intelligent,"
benevolent, "expert," and "responsible" elite (responsible, indeed, for such glorious
accomplishments as the Great Depression, the Vietnam War, the invasion of Iraq, the Great
Recession, global warming, and the rise of the Islamic State) needed, in Lippman's view, to be
protected from what he called "the trampling and roar of the bewildered herd."[15] The deluded
mob, the sub-citizenry, the dangerous working class majority is not the audience for elite
organs like the Times, the Post, and the Journal.
The second target group comprises the relevant political class of U.S. citizens from at most
the upper fifth of society. This is who reads the Times, the Post, WSJ, and FT, for the most
part. Call this audience (again following Carey) the "treetops": the "people who matter" and
who deserve and can be trusted with something more closely approximating the real story because
their minds have been properly disciplined and flattered by superior salaries, significant
on-the-job labor autonomy, and "advanced" and specialized educational and professional
certification. This elite includes such heavily indoctrinated persons as corporate managers,
lawyers, public administrators, and (most) tenured university professors. Since these elites
carry out key top-down societal tasks of supervision, discipline, training, demoralization,
co-optation, and indoctrination – all essential to the rule of the real economic elite
and the imperial system – they cannot be too thoroughly misled about current events and
policy without deleterious consequences for the smooth functioning of the dominant social and
political order. They require adequate information and must not be overly influenced by the
brutal and foolish propaganda generated for the "bewildered herd." At the same time,
information and commentary for the relevant and respectable business and political classes and
their "coordinator class" servants and allies often contains a measure of reasoned and sincere
intra-elite political and policy debate – debate that is always careful not to stray
beyond narrow U.S. ideological parameters. That is why a radical Left U.S. thinker and activist
can find much that is of use in U.S. "treetops" media. Such a thinker or activist would,
indeed, be foolish not to consult these sources.
"P"BS and N"P"R
A second objection to the Left critique of U.S. "mainstream" media claims that the U.S.
public enjoys a meaningful alternative to the corporate media in the form of the nation's
Public Broadcasting Service (television) and National Public Radio (NPR). This claim should not
be taken seriously. Thanks to U.S. "public" media's pathetically weak governmental funding, its
heavy reliance on corporate sponsors, and its constant harassment by right wing critics inside
and beyond the U.S. Congress, N"P"R and "P"BS are extremely reluctant to question dominant U.S.
ideologies and power structures.
The tepid, power-serving conservatism of U.S. "public" broadcasting is by longstanding
political and policy design. The federal government allowed the formation of the "public"
networks only on the condition that they pose no competitive market or ideological challenge to
private commercial media, the profits system, and U.S. global foreign policy. "P"BS and N"P"R
are "public" in a very limited sense. They not function for the public over and against
corporate, financial, and imperial power to any significant degree.
"The Internet Will Save Us"
A third objection claims that the rise of the Internet creates a "Wild West" environment in
which the power of corporate media is eviscerated and citizens can find and even produce all
the "alternative media" they require. This claim is misleading but it should not be reflexively
or completely dismissed. In the U.S. as elsewhere, those with access to the Internet and the
time and energy to use it meaningfully can find a remarkable breadth and depth of information
and trenchant Left analysis at various online sites. The Internet also broadens U.S. citizens
and activists' access to media networks beyond the U.S. – to elite sources that are much
less beholden of course to U.S. propaganda and ideology. At the same time, the Internet and
digital telephony networks have at times shown themselves to be effective grassroots organizing
tools for progressive U.S. activists.
Still, the democratic and progressive impact of the Internet in the U.S. is easily
exaggerated. Left and other progressive online outlets lack anything close to the financial,
technical, and organizational and human resources of the corporate news media, which has its
own sophisticated Internet. There is nothing in Left other citizen online outlets that can
begin to remotely challenge the "soft" ideological and propagandistic power of corporate
"entertainment" media. The Internet's technical infrastructure is increasingly dominated by an
"ISP cartel" led by a small number of giant corporations. As the leading left U.S. media
analyst Robert McChesney notes:
"By 2014, there are only a half-dozen or so major players that dominate provision of
broadband Internet access and wireless Internet access. Three of them – Verizon,
AT&T, and Comcast – dominate the field of telephony and Internet access, and have
set up what is in effect a cartel. They no longer compete with each other in any meaningful
sense. As a result, Americans pay far more for cellphone and broadband Internet access than
most other advanced nations and get much lousier service These are not 'free market'
companies in any sense of the term. Their business model, going back to pre-Internet days,
has always been capturing government monopoly licenses for telephone and cable TV services.
Their 'comparative advantage' has never been customer service; it has been world-class
lobbying.' [16]
Along the way, the notion of a great "democratizing," Wild West" and "free market" Internet
has proved politically useful for the corporate media giants. The regularly trumpet the great
Internet myth to claim that the U.S. public and regulators don't need to worry about corporate
media power and to justify their demands for more government subsidy and protection. At the
same time, finally, we know from the revelations of Edward Snowden, Glenn Greenwald and others
that the nation's leading digital and Internet-based e-mail (Google and Yahoo), telephony (e.g.
Verizon), and "social network" (Facebook above all) corporations have collaborated with the
National Security Agency and with the nation's local, state, and federal police in the
surveillance of U.S. citizens' and activists' private communications.[17]
Solutions
The fourth objection accuses Left media critics of being overly negative, "carping" critics
who offer no serious alternatives to the nation's current corporate-owned corporate-managed
commercial and for-profit media system. This is a transparently false and mean-spirited charge.
Left U.S. media criticism is strongly linked to a smart and impressive U.S. media reform
movement that advances numerous and interrelated proposals for the creation of a genuinely
public and democratically run non-commercial and nonprofit U.S. media system. Some of the
demand and proposals of this movement include public ownership and operation of the Internet as
a public utility; the break-up of the leading media oligopolies; full public funding of public
broadcasting; limits on advertising in commercial media; the abolition of political
advertisements; the expansion of airwave and broadband access for alternative media outlets;
publicly-funded nonprofit and non-commercial print journalism; the abolition of government and
corporate surveillance, monitoring, and commercial data-mining of private communication and
"social networks."[18] With regard to the media as with numerous other areas, we should recall
Chomsky's sardonic response to the standard conservative claim that the Left offers criticisms
but no solutions: "There is an accurate translation for that charge: 'they present solutions
and I don't like them.'"[19]
A False Paradox
The propagandistic and power-serving mission and nature of dominant U.S, corporate mass
media might seem ironic and even paradoxical in light of the United States' strong free speech
and democratic traditions. In fact, as Carey and Chomsky have noted, the former makes perfect
sense in light of the latter. In nations where popular expression and dissent is routinely
crushed with violent repression, elites have little incentive to shape popular perceptions in
accord with elite interests. The population is controlled primarily through physical coercion.
In societies where it is not generally considered legitimate to put down popular expression
with the iron heel of armed force and where dissenting opinion is granted a significant measure
of freedom of expression, elites are heavily and dangerously incentivized to seek to
manufacture mass popular consent and idiocy. The danger is deepened by the United States'
status as the pioneer in the development of mass consumer capitalism, advertising, film, and
television. Thanks to that history, corporate America has long stood in the global vanguard
when it comes to developing the technologies, methods, art, and science of mass persuasion and
thought control.[20]
It is appropriate to place quotation marks around the phrase "mainstream media" when writing
about dominant U.S. corporate media. During the Cold War era, U.S. officials and media never
referred to the Soviet Union's state television and radio or its main state newspapers as
"mainstream Russian media." American authorities referred to these Russian media outlets as
"Soviet state media" and treated that media as means for the dissemination of Soviet
"propaganda" and ideology. There is no reason to consider the United States' corporate and
commercial media as any more "mainstream" than the leading Soviet media organs were back in
their day. It is just as dedicated as the onetime Soviet state media to advancing the doctrinal
perspectives of its host nation's reigning elite -- and far more effective.
Its success is easily exaggerated, however. To everyday Americans' credit, corporate media
has never been fully successful in stamping out popular resistance and winning over the hearts
and minds of the U.S. populace. A recent Pew Research poll showed that U.S. "millennials"
(young adults 18-29 years old) have a more favorable response to the word "socialism" than to
"capitalism" – a remarkable finding on the limits of corporate media and other forms of
elite ideological power in the U.S. The immigrant worker uprising of May 2006, the Chicago
Republic Door and Window plant occupation of 2008, the University of California student
uprisings of 2009 and 2010, the Wisconsin public worker rebellion in early 2011, the Occupy
Movement of late 2011, and Fight for Fifteen (for a $15 an hour minimum wage) and Black Lives
Matter movements of 2014 and 2015 show that U.S. corporate and imperial establishment has not
manufactured anything like comprehensive and across the board mass consent and idiocy in the
U,S. today. The U.S. elite is no more successful in its utopian (or dystopian) quest to control
every American heart and mind than it is in its equally impossible ambition of managing events
across a complex planet from the banks of the Potomac River in Washington D.C. The struggle for
popular self-determination, democracy, justice, and equality lives on despite the influence of
corporate media.
"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."
Being run by business, American culture suffers from an overwhelming
preponderance of stupidity . When a set of institutions as reactionary as big business has
a virtual monopoly over government and the media, the kinds of information, entertainment,
commentary, ideologies, and educational policies on offer will not conduce to rationality or
social understanding. What you'll end up with is, for instance, an electorate 25 percent of
whose members are inclined to
libertarianism . And the number is even higher
among young people. That is to say, huge numbers of people will be exposed to and persuaded by
the propaganda of the Cato Institute, the magazine Reason , Ayn Rand's novels, and
Milton Friedman's ideological hackery to express their rebellious and anti-authoritarian
impulses by becoming "extreme advocates of total tyranny," to quote Chomsky . They'll believe, as he translates,
that "power ought to be given into the hands of private, unaccountable tyrannies," namely
corporations. They'll think that if you just get government out of the picture and let
capitalism operate freely, unencumbered by regulations or oversight or labor unionism, all will
be for the best in this best of all possible worlds. And they'll genuinely believe they're
being subversive and anarchistic by proposing such a program.
The spectacle of millions adhering to such a breathtakingly stupid ideology would be comical
if it weren't so tragic. I'm an atheist, but Christianity strikes me as a more rational
-- and moral -- religion than this "libertarian" (really totalitarian) one of absolute faith in
universal privatization, marketization, corporatization, and commoditization. To be a so-called
libertarian is to be deplorably ignorant of modern history ,
economics , commonsense
sociology , human
psychology , and morality
itself . (Regarding morality: if the Golden Rule is an essential maxim, then the communist
slogan "From each according to his ability, to each according to his need," which is basically
a derivative of the Golden Rule, is fundamental to any humane social organization. Greed and
Social Darwinism -- every man for himself -- are hardly morally luminous principles.) Given
this reactionary philosophy's intellectual sterility and the fact that it's been refuted
countless times, it's tempting to simply ignore it. And most leftists do ignore it. But that's
a mistake, as the frightening figure quoted a moment ago (25 percent of the electorate)
indicates. It's necessary to challenge "free market" worship whenever and wherever it
appears.
The economist Rob Larson has performed an important service, therefore, in publishing his
new book Capitalism vs. Freedom:
The Toll Road to Serfdom , the more so because the book's lucidity and brevity should
win for it a wide readership. In five chapters, Larson systematically demolishes the glib
nostrums of Milton Friedman and Friedrich Hayek (in the process also dispatching those other
patron saints of the right wing, Ludwig von Mises, Ayn Rand, and Murray Rothbard). Even the
book's title is highly effective: the message " capitalism vs. freedom " should be
trumpeted from the hills, since it challenges one of the reigning dogmas of our society.
Liberals and leftists themselves sometimes buy into the view that capitalism promotes freedom,
arguing only that socialist equality and justice are more important than capitalist freedom.
But this is a false framing of the issue. The fact is that socialism, which is to say workers'
democratic control of the economy, not only means greater equality and justice than capitalism
but also greater freedom, at least for the 99 percent. It is freedom, after all, that has
inspired anarchists and even Marxists, including
Marx himself .
Larson begins with a brief discussion of two concepts of freedom, negative and positive (a
distinction that goes back, as he notes, at least to Isaiah Berlin). Crudely speaking, negative
freedom means the absence of external constraint, of a power that can force you to act in
particular ways. Positive freedom is the ability or opportunity actually to realize purposes
and wishes, to "control your destiny," so to speak. It involves having the means to satisfy
desires, as when you have the means to assuage hunger, be adequately clothed and sheltered, and
have adequate sanitation. Positive freedom can be thought of as "freedom to," whereas negative
freedom is "freedom from." Classical liberals like John Stuart Mill and modern conservatives
like Friedman and Hayek are more concerned with negative freedom, which explains their desire
for a minimal state; socialists are concerned also with positive freedom, sometimes believing
that a stronger state (e.g., a social democracy) can help ensure such freedom for the majority
of people.
Friedman and Hayek argued that free-market capitalism, with minimal intervention by the
state, is the surest guarantee of negative liberty. Larson's book is devoted mainly to refuting
this belief, which is widely held across the political spectrum; but it also defends the less
controversial claim that capitalism is incompatible with widespread positive liberty too.
"Capitalism," Larson writes, "withholds opportunities to enjoy freedom (required by the positive view of freedom) and
also encourages the growth of economic power (the adversary of liberty in the negative view of
freedom)." That concentrations of economic power in themselves threaten negative liberty might
be challenged, but this is a weak argument, among other reasons because it's clear that centers
of (economic) power will tend to dominate and manipulate the state in their own interest.
They'll construct coercive apparatuses to subordinate others to their power, which will itself
enable further accumulations of power, etc., until finally the society is ruled by an
oligarchy. Thus, from "pure" capitalism you get an oligarchy with the power to coerce.
However obvious this point may seem to those possessed of common sense, it's far from
obvious to libertarians and most conservatives. According to Friedman, "the kind of economic
organization that provides economic freedom directly, namely, competitive capitalism, also
promotes political freedom because it separates economic power from political power and in this
way enables the one to offset the other." Here we encounter the typical naïve idealism of
conservatives (and, indeed, of centrists and liberals), which I've discussed at length
here . Rather than
analyzing the real conditions of real social structures, conservatives traffic in airy
abstractions about "freedom," "the separation of political and economic power," the lofty
virtues of "competitive capitalism," and so on. Evidently it doesn't occur to Friedman that
economic power will tend to confer political power, and therefore that, far from offsetting
each other, the two will be approximately fused. The economically powerful might not directly
hold political office, but because of the resources they possess, they'll have inordinate power
and influence over political leaders. This is intuitively obvious, but it's also borne out by
empirical research .
It's worth pointing out, too, something that Larson doesn't really focus on: within
corporations, freedom, even negative freedom, is severely curtailed. In the absence of a union,
the employee has hardly any rights. There's no freedom of expression, for example, and the boss
can threaten you, manipulate you however he wants, verbally abuse you, behave horrendously
towards you with probably no repercussions for himself. Capitalism in fact is a kind of
fragmented totalitarianism, as privately totalitarian corporate entities proliferate all over
society and constitute its essential infrastructure, its foundation
. The more oligopolistic they become, to some degree even fused with the state, the less
"fragmented" and more dangerous the totalitarianism is. Eventually the "libertarian" millennium
might be achieved in which all countervailing forces, such as unions, are eradicated and the
population is left wholly at the mercy of corporations, reveling in its sublime freedom to be
totally dominated.
Anyway, to resume the thread: Larson is right that "in portraying [the] concentration of
money in society as a reasonable development" -- e.g., as a reward for successfully competing
against other capitalists -- "the libertarian tradition completely dismisses the power
of concentrated money." Hayek, for example, claims that in a "competitive society" (a
meaningless abstraction: different kinds of societies can be "competitive") nobody possesses
excessive power. "So long as property is divided among many owners, none of them acting
independently has exclusive power to determine the income and position of particular people."
Okay, fine, maybe not exclusive power, but to the degree that property is divided
among fewer and fewer owners, these people can achieve overwhelming power to determine
the income and position of others. Such as by acquiring greater "positive freedom" to dominate
the state in their interests and against the interests of others, who thus proportionately lose
positive freedom and possibly (again) even negative freedom, e.g. if the wealthy can get laws
passed that restrict dissidents' right to free speech or free assembly.
More generally, it goes without saying that positive freedom is proportional to how much
money you have. It apparently doesn't bother most libertarians that if you're poor and unable
to find an employer to rent yourself to (in the gloriously "free, voluntary, and non-coercive"
labor market), you won't be able to eat or have a minimally decent life. Hopefully private
charities and compassionate individuals will come forward to help you; but if not, well, it's
nothing that society as a whole should care about. Strictly speaking, there is no
right to live (or to have shelter, food, health care, education, etc.); there is only
a right not to be interfered with by others (except in the workplace). What a magnificent moral
vision.
Libertarians admit that concentrations of wealth emerge in capitalism, but they deprecate
the idea that capitalism leads to competition-defeating market concentration in such forms as
oligopolies, monopolies, and monopsonies (like Wal-Mart). Usually these are created,
supposedly, by government interference. But most businessmen and serious scholars disagree,
pointing, for instance, to the significance of economies of scale. The famous business
historian Alfred Chandler showed that many industries quickly became oligopolistic on the
basis, in large part, of economies of scale. Historian Douglas Dowd observes that large-scale
industrial technology has made it both necessary for firms to enlarge and possible for them to
control their markets, while Australian economist Steve Keen argues that "increasing returns to
scale mean that the perfectly competitive market is unstable: it will, in time break down [into
oligopoly or monopoly]."
Larson might have gone further in this line of argument by emphasizing just how much
capitalists hate market discipline -- i.e., the "free market" -- and are constantly
trying to overcome it. They're obsessed with controlling markets, whether through
massive advertising campaigns, destruction or absorption of their competitors, price-fixing and
other forms of collusion, or the formation of hundreds of trade associations. The historian
Gabriel Kolko's classic study The Triumph of Conservatism: A Reinterpretation of
American History, 1900–1916 revealed that the hatred of market anarchy is so
extreme that Progressive-Era oligopolists were actually the main force behind government
regulation of industry (to benefit business, not the public), as with the Meat Inspection Act
of 1906, the Pure Food and Drug Act, the Federal Reserve Act, the Clayton Antitrust Act, and
the Federal Trade Commission Act. Andrew Carnegie and Elbert H. Gary, head of U.S. Steel, even
advocated government price-fixing! So much for the corporate propaganda about how wonderful
free markets are.
If government regulation is primarily responsible for monopoly elements in industries, as
Friedman and Hayek argue, then you'd think that the deregulation tsunami of the neoliberal era
would have led to greater competition across the economy. Did it? Not exactly. Larson quotes a
Forbes article:
Since freight railroads were deregulated in 1980, the number of large, so-called Class I
railroads has shrunk from 40 to seven. In truth, there are only four that matter These four
superpowers now take in more than 90% of the industry's revenue An estimated one-third of
shippers have access to only one railroad.
Quod erat demonstrandum . But there are many other examples. The deregulatory
Telecommunications Act of 1996 was supposed to throw open the industry to competition; what it
accomplished, according to the Wall Street Journal , was "a new phase in the
hyper-consolidation of the cable industry An industry that was once a hodgepodge of
family-owned companies has become one of the nation's most visible and profitable oligopolies."
These trends have occurred throughout
the media , on a global scale.
The same consolidation is found in the airline industry, where deregulation "set off a
flurry of mergers" (as the Journal notes), "creating a short roster of powerful
giants. And consumers are, in many cases, paying the price." In fact, it's well known that
deregulation has facilitated an enormous wave of mergers and acquisitions since the 1980s.
(Similarly, the big businesses, and later the mergers, of the Gilded Age appeared in a time of
little public regulation.) All this market-driven oligopolization has certainly not increased
consumer freedom, or the freedom of anyone but the top fraction of one percent in wealth.
Speaking of communications and the media, another classic libertarian claim is hollow: far
from encouraging a rich and competitive diversity of information and opinion, the free market
tends to narrow the spectrum of opinion and information sources. When Hayek writes of
totalitarian governments that "The word 'truth' ceases to have its old meaning. It describes no
longer something to be found, with the individual conscience as the sole arbiter it becomes
laid down by authority," referring to the "spirit of complete cynicism as regards truth the
loss of the sense of even the meaning of truth," it is easy to think he's describing the mass
media in the heavily capitalist United States. For one thing, because of scale economies and
other market dynamics, over time fewer and fewer people or groups can afford to run, say, a
successful and profitable newspaper. Across the West, in the twentieth century competition
eventually weeded out working-class newspapers that had fewer resources than the capitalist
mass media, and the spectrum of information consumed by the public drastically narrowed.
"Market forces thus accomplished more than the most repressive measures of an aristocratic
state," to quote the authors of an important
study .
At the same time, the sources of information became less and less independent, due to the
development of the advertising market. Advertisers "acquired a de facto licensing power
because, without their support, newspapers ceased to be economically viable." As Edward Herman
says, it wasn't the final consumer's but the advertiser's choices that determined
media prosperity and survival, and hence the content (broadly speaking) of the news and opinion
pieces. Moreover, the media increasingly consisted of giant corporations who had basically the
same interests as advertisers anyway. The result corresponded less to Friedman's slogan Free to
Choose than to Edward
Bernays' slogan Free to Imagine That We Choose (because what we're choosing from is a
narrow
range of corporate and government propaganda ).
Capitalism vs. Freedom also has a chapter on "political freedom," and another on
the "freedom of future generations" -- which is nonexistent in a strictly capitalist society
because future generations have no money and therefore no power. They have to deal with
whatever market externalities result from their ancestors' monomaniacal pursuit of profit.
Including the possible destruction of civilization from global warming, a rather large
externality. Even in the present, the IMF has estimated that the "external" costs of using
fossil fuels, counting public health effects and environmental ramifications, are already $5
trillion a year. Again, this should suggest to anyone with a few neurons still functioning that
markets aren't particularly "efficient." Especially considering the existence of major public
goods that are undersupplied by the market, such as roads, bridges, sanitation systems, public
parks, libraries, scientific research, public education, and social welfare programs. What do
Friedman and Hayek think of these things? Well, Hayek was writing for a Western European
audience, so he had to at least pretend to be reasonable. "[T]he preservation of competition
[is not] incompatible with an extensive system of social services," he wrote, which leaves "a
wide and unquestioned field for state activity." Okay. But that's a significant concession.
Apparently his "libertarianism" wasn't very consistent.
For Friedman, public goods should be paid for by those who use them and not by a wealthy
minority that is being taxed against its wishes. "There is all the difference in the world," he
insists, "between two kinds of assistance through government that seem superficially similar:
first, 90 percent of us agreeing to impose taxes on ourselves in order to help the bottom 10
percent, and second, 80 percent voting to impose taxes on the top 10 percent to help the bottom
10 percent." Thus, the wealthy and powerful shouldn't have to pay taxes to maintain services
from which they don't directly benefit. We shouldn't subtract any of the positive freedom from
people who have an enormous amount of it (i.e., of power , the concentration of which
libertarians are supposed to oppose ) in order to give more positive freedom to people
who have very little of it. That would be unforgivably compassionate.
Most of Larson's chapter on political freedom consists of salutary reminders of how politics
actually works in the capitalist United States. Drawing on Thomas Ferguson's investment theory of party competition ,
Larson describes the political machinations of big business, the concerted and frequently
successful efforts to erode the positive and negative freedoms of the populace, the permanent
class war footing, the fanatical union-busting, the absurdly cruel austerity programs of the
IMF (which, again, serve but to crush popular freedom and power), and the horrifying legacy of
European and U.S. imperialism around the world. Readers who want to learn more about the dark
side of humanity can consult William Blum's Killing Hope ,
Naomi Klein's The Shock
Doctrine (which also describes Hayek and Friedman's love-affairs with neo-Nazi Latin
American generals), Robert Fisk's The Great War for
Civilization , and most of Noam Chomsky's books . In light of all these
practices and policies that have emerged, directly or indirectly, out of the dynamics of the
West's market economy, to argue that capitalism promotes human freedom is to be a hopeless
intellectual fraud and amoral minion of power.
(If that judgment sounds harsh, consider this gem from Hayek, directed against measures to
ensure worker security: "It is essential that we should relearn frankly to face the fact that
freedom can be had only at a price and that as individuals we must be prepared to make severe
material sacrifices to preserve our liberty." More exactly, working-class individuals have to
make severe sacrifices to preserve the liberty of the capitalist class.)
In fact, to the extent that we have freedom and democracy at all, it has been achieved
mainly through decades and centuries of popular struggle against capitalism, and
against vicious modes of production and politics (including slavery and Latin American
semi-feudalism) that have been essential to the
functioning of the capitalist world-economy. Göran Therborn's classic article " The
Rule of Capital and the Rise of Democracy " gives details, as does Howard Zinn's famous
People's History of the
United States .
Larson, unlike the charlatans whose work he reviews, actually does believe that
"concentrated power is opposed to human freedom," so he dedicates his final chapter to briefly
expositing a genuinely libertarian vision, that of socialism. Here I need only refer
to the work of such writers as Anton Pannekoek, Rudolf Rocker, Peter Kropotkin, Errico
Malatesta, Murray Bookchin, and others in the anarchist and/or left-Marxist tradition. There's
a lot of talk of socialism these days, but few commentators (except on the left) know what
they're talking about. For instance, like Hayek and Friedman, they tend to equate socialism
with state control, authoritarianism, the Soviet Union, and other boogeymen. This ignores the
fact that anarchism, which reviles the state, is committed to socialism. So virtually all
mainstream commentary on socialism is garbage and immediately refuted from that one
consideration alone. The basic point that conservatives, centrists, and liberals refuse to
mention, because it sounds too appealing, is that socialism means nothing else but worker and
community control. Economic, political, and social democracy. It is, in essence, a set of moral
principles that can theoretically be fleshed out in a variety of ways, for instance some
preserving a place for the market and others based only on democratic planning (at the level of
the neighborhood, the community, the firm, the city, the nation, etc.). The core of socialism
is freedom -- the absence of concentrated power -- not absolute equality.
Whether a truly socialist, libertarian society will ever exist is an open question, but
certain societies have approached the ideal more closely than others. The Soviet Union was, and
the U.S. is, very far from socialism, while Scandinavian countries are a little closer (since
the population generally has more freedom and power there than in the U.S. and the Soviet
Union). The Bolivian Constitution of
2009 is vastly closer to socialism, which is to say morality and the ideal of human
dignity, than the reactionary U.S. Constitution . On a smaller scale,
worker cooperatives -- see
this book -- tend to embody a microcosmic socialism.
Larson ends his book on the note sounded by Rosa Luxemburg a century ago: socialism or
barbarism . Margaret Thatcher's infamous declaration "There is no alternative" can now be
given a more enlightened meaning: there is no alternative to socialism, except the destruction
of civilization and maybe the human species. Morality and pragmatic necessity, the necessities
of survival, now coincide. Concentrated corporate power must be dismantled and democracy
substituted for it -- which is a global project that will take generations but is likely to
develop momentum as society experiences ever-greater crises.
In the end, perhaps Friedman, Hayek, and their ilk will be seen to have contributed to the
realization of a truly libertarian program after all, albeit indirectly. For by aiding in the
growth of an increasingly authoritarian system, they may have hastened the birth of a
democratic opposition that will finally tear up the foundations of tyranny and lay the
groundwork for an emancipated world. Or at least a world in which Friedmans and Hayeks can't
become intellectual celebrities. For now, I'd settle for that. Join the debate on
Facebook More articles by: Chris Wright
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.
"... By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website ..."
"... Squeezed: Why Our Families Can't Afford America ..."
"... 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. ..."
"... The Vanishing Middle Class ..."
"... Capital in the Twenty-First Century ..."
"... Global Wealth Report ..."
"... 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! ..."
"... I think one crucial thing that has to change is the culture of extreme individualisation. ..."
"... die Plutonomisten und Bolshewisten! ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... "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?" ..."
"... "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." ..."
"... "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. ..."
"... 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. ..."
"... Economics was always far too dangerous to be allowed to reveal the truth about the economy. ..."
"... "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." ..."
"... 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. ..."
"... 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 cost of living = housing costs + healthcare costs + student loan costs ..."
"... 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. ..."
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.
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.
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.
====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.
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.
"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."
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.
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."
'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.
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.
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.
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.
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.
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.
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.
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?
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.
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.
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.]
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.
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.pdf
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?
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.
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%.
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.
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?
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"
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:
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.
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.
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.
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?"
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.
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.
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 ".
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.
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.
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.
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.
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.
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.
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.html
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?
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?
"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.
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.
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.
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.
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.
"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.
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.
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.
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.
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!!"
"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."
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.
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?
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.
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.
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).
"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.
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."
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.
> 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.
"... Well, it comes down to the myths we've been sold. Myths that are ingrained in our social programming from birth, deeply entrenched, like an impacted wisdom tooth. These myths are accepted and basically never questioned. ..."
"... Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard on hard-on pills, but we can't get anything resembling hard news because it's funded by dicks.) The corporate media's jobs are to rally for war, cheer for Wall Street and froth at the mouth for consumerism. It's their mission to actually fortify belief in the myths I'm telling you about right now. Anybody who steps outside that paradigm is treated like they're standing on a playground wearing nothing but a trench coat. ..."
"... The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges recently noted , "The most basic constitutional rights have been erased for many. Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret evidence, secret budgets and secret prisons in the name of national security." ..."
"... This myth (Buying will make you happy) is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious). ..."
"... According to Deloitte's Shift Index survey : "80% of people are dissatisfied with their jobs" and "[t]he average person spends 90,000 hours at work over their lifetime." That's about one-seventh of your life -- and most of it is during your most productive years. ..."
"... Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms. ..."
Our society should've collapsed by now. You know that, right?
No society should function with this level of inequality (with the possible exception of one of those prison planets in a "Star
Wars" movie). Sixty-three percent of Americans
can't afford a $500 emergency
. Yet Amazon head Jeff Bezos is now
worth a record $141 billion . He could literally end world hunger for multiple years and still have more money left over than
he could ever spend on himself.
Worldwide,
one in
10 people only make $2 a day. Do you know how long it would take one of those people to make the same amount as Jeff Bezos has?
193 million years . (If they only buy single-ply toilet paper.) Put simply, you cannot comprehend the level of inequality in our
current world or even just our nation.
So shouldn't there be riots in the streets every day? Shouldn't it all be collapsing? Look outside. The streets aren't on fire.
No one is running naked and screaming (usually). Does it look like everyone's going to work at gunpoint? No. We're all choosing to
continue on like this.
Why?
Well, it comes down to the myths we've been sold. Myths that are ingrained in our social programming from birth, deeply entrenched,
like an impacted wisdom tooth. These myths are accepted and basically never questioned.
I'm going to cover eight of them. There are more than eight. There are probably hundreds. But I'm going to cover eight because
(A) no one reads a column titled "Hundreds of Myths of American Society," (B) these are the most important ones and (C) we all have
other shit to do.
Myth No. 8 -- We have a democracy.
If you think we still have a democracy or a democratic republic, ask yourself this: When was the last time Congress did something
that the people of America supported that did not align with corporate interests? You probably can't do it. It's like trying to think
of something that rhymes with "orange." You feel like an answer exists but then slowly realize it doesn't. Even the Carter Center
and former President Jimmy Carter believe that America has been
transformed into
an oligarchy : A small, corrupt elite control the country with almost no input from the people. The rulers need the myth that
we're a democracy to give us the illusion of control.
Myth No. 7 -- We have an accountable and legitimate voting system.
Gerrymandering, voter purging, data mining, broken exit polling, push polling, superdelegates, electoral votes, black-box machines,
voter ID suppression, provisional ballots, super PACs, dark money, third parties banished from the debates and two corporate parties
that stand for the same goddamn pile of fetid crap!
What part of this sounds like a legitimate election system?
No, we have what a large Harvard study called the
worst election system in the Western world . Have you ever seen where a parent has a toddler in a car seat, and the toddler has
a tiny, brightly colored toy steering wheel so he can feel like he's driving the car? That's what our election system is -- a toy
steering wheel. Not connected to anything. We all sit here like infants, excitedly shouting, "I'm steeeeering !"
And I know it's counterintuitive, but that's why you have to vote. We have to vote in such numbers that we beat out what's stolen
through our ridiculous rigged system.
Myth No. 6 -- We have an independent media that keeps the rulers accountable.
Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard
on hard-on pills, but we can't get anything resembling hard news because it's funded by dicks.) The corporate media's jobs are to
rally for war, cheer for Wall Street and froth at the mouth for consumerism. It's their mission to actually fortify belief in the
myths I'm telling you about right now. Anybody who steps outside that paradigm is treated like they're standing on a playground wearing
nothing but a trench coat.
Myth No. 5 -- We have an independent judiciary.
The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions
of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges
recently noted , "The most basic constitutional
rights have been erased for many. Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret
evidence, secret budgets and secret prisons in the name of national security."
If you're not part of the monied class, you're pressured into releasing what few rights you have left. According to
The New
York Times , "97 percent of federal cases and 94 percent of state cases end in plea bargains, with defendants pleading guilty
in exchange for a lesser sentence."
That's the name of the game. Pressure people of color and poor people to just take the plea deal because they don't have a million
dollars to spend on a lawyer. (At least not one who doesn't advertise on beer coasters.)
Myth No. 4 -- The police are here to protect you. They're your friends .
That's funny. I don't recall my friend pressuring me into sex to get out of a speeding ticket. (Which is essentially still
legal in 32
states .)
The police in our country are primarily designed to do two things: protect the property of the rich and perpetrate the completely
immoral war on drugs -- which by definition is a war on our own people .
We lock up more people than
any other country on earth
. Meaning the land of the free is the largest prison state in the world. So all these droopy-faced politicians and rabid-talking
heads telling you how awful China is on human rights or Iran or North Korea -- none of them match the numbers of people locked up
right here under Lady Liberty's skirt.
Myth No. 3 -- Buying will make you happy.
This myth (Buying will make you happy) is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a
tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because
most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then
flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious).
If we're lucky, we'll make enough money during the week to afford enough beer on the weekend to help it all make sense. (I find
it takes at least four beers for everything to add up.) But that doesn't truly bring us fulfillment. So what now? Well, the ads say
buying will do it. Try to smother the depression and desperation under a blanket of flat-screen TVs, purses and Jet Skis. Now does
your life have meaning? No? Well, maybe you have to drive that Jet Ski a little faster! Crank it up until your bathing suit flies
off and you'll feel alive !
The dark truth is that we have to believe the myth that consuming is the answer or else we won't keep running around the wheel.
And if we aren't running around the wheel, then we start thinking, start asking questions. Those questions are not good for the ruling
elite, who enjoy a society based on the daily exploitation of 99 percent of us.
Myth No. 2 -- If you work hard, things will get better.
According to Deloitte's Shift
Index survey : "80% of people are dissatisfied with their jobs" and "[t]he average person spends 90,000 hours at work over their
lifetime." That's about one-seventh of your life -- and most of it is during your most productive years.
Ask yourself what we're working for. To make money? For what? Almost none of us are doing jobs for survival anymore. Once upon
a time, jobs boiled down to:
I plant the food -- >I eat the food -- >If I don't plant food = I die.
But nowadays, if you work at a café -- will someone die if they don't get their super-caf-mocha-frap-almond-piss-latte? I kinda
doubt they'll keel over from a blueberry scone deficiency.
If you work at Macy's, will customers perish if they don't get those boxer briefs with the sweat-absorbent-ass fabric? I doubt
it. And if they do die from that, then their problems were far greater than you could've known. So that means we're all working to
make other people rich because we have a society in which we have to work. Technological advancements can do most everything that
truly must get done.
So if we wanted to, we could get rid of most work and have tens of thousands of more hours to enjoy our lives. But we're not doing
that at all. And no one's allowed to ask these questions -- not on your mainstream airwaves at least. Even a half-step like universal
basic income is barely discussed because it doesn't compute with our cultural programming.
Scientists say it's quite possible artificial intelligence will take away
all human jobs in 120 years . I think they know that will
happen because bots will take the jobs and then realize that 80 percent of them don't need to be done! The bots will take over and
then say, "Stop it. Stop spending a seventh of your life folding shirts at Banana Republic."
One day, we will build monuments to the bot that told us to enjoy our lives and leave the shirts wrinkly.
And this leads me to the largest myth of our American society.
Myth No. 1 -- You are free.
... ... ...
Try sleeping in your car for more than a few hours without being harassed by police.
Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms.
Try signing up for the military because you need college money and then one day just walking off the base, going, "Yeah, I was
bored. Thought I would just not do this anymore."
Try explaining to Kentucky Fried Chicken that while you don't have the green pieces of paper they want in exchange for the mashed
potatoes, you do have some pictures you've drawn on a napkin to give them instead.
Try using the restroom at Starbucks without buying something while black.
We are less free than a dog on a leash. We live in one of the hardest-working, most unequal societies on the planet with more
billionaires than ever .
Meanwhile,
Americans
supply 94 percent of the paid blood used worldwide. And it's almost exclusively coming from very poor people. This abusive vampire
system is literally sucking the blood from the poor. Does that sound like a free decision they made? Or does that sound like something
people do after immense economic force crushes down around them? (One could argue that sperm donation takes a little less convincing.)
Point is, in order to enforce this illogical, immoral system, the corrupt rulers -- most of the time -- don't need guns and tear
gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into,
hook, line and sinker. Some fairy tales for adults.
815M people chronically malnourished according to the UN. Bezos is worth $141B.
$141B / 815M people = $173 per person. That would definitely not feed them for "multiple years". And that's only if Bezos could
fully liquidate the stock without it dropping a penny.
" Point is, in order to enforce this illogical, immoral system, the corrupt rulers -- most of the time -- don't
need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for
us all to buy into, hook, line and sinker. Some fairy tales for adults. "
Seems like there's tear gas in the air and guns are going to be used soon. The myths are dying on the tongues of the liars.
Molon Labe!....and I'm usually a pacifist.
"American Society Would Collapse If It Weren't For Invasions Of Foreign Countries, Murdering Their People, Stealing Their Oil
Then Blaming Them For Making The US Do It."
Well, in a world driven by oil, it is entirely bogus to suggest that citizens have to work their asses off. That was the whole
point of the bill of goods that was sold to us in the late 70's and early 80'. More leisure time, more time for your family and
personal interests.
Except! It never happened. All they fucking did was reduce real wages and force everyone from the upper middle class down,
into a shit hole.
But, they will pay for their folly. Guaran-fucking-teed.
As one who has hoed many rows of cotton in 115F temperatures as well as picking cotton during my childhood and early adolescence
during weekends and school holidays, I concur. It was a very powerful inducement to get a good education back when schools actually
taught things and did not tolerate backtalk or guff from students instead of babysitting them. It worked, and I ended up writing
computer software for spacecraft, which was much fun than working in the fields.
"... Congress wasted no time jumping on the Treason bandwagon, led by Chuck Schumer conjuring the spectre of the KGB, Marco Rubio as neocon point-man (one imagines Barbara Bush rolling in her grave at his usurpation of Jeb's rightful role) proposing locked-and-loaded sanctions in case of future "meddling," and John McCain , still desperate to take the rest of the world with him before he finally kicks a long-overdue bucket, condemning the "disgraceful" display of two heads of state trying to come to an agreement about matters of mutual interest. The Pentagon has invested a lot of time and money in positioning Russia as Public Enemy #1, and for Trump to put his foot in it by making nice with Putin might diminish the size of their weapons contracts – or the willingness of the American people to tolerate more than half of every tax dollar disappearing down an unaccountable hole . Peace? Eh, who needs it. Cash , motherfucker. ..."
"... The Intelligence Community believes it is God, and it hath smote Trump good. Smelling blood in the water, the media redoubled their shrieking for several days, and crickets. ..."
The Helsinki hysteria shone a spotlight on the utter impotence of the establishment media
and their Deep State controllers to make their delusions reality. Never before has there been
such a gaping chasm visible between the media's "truth" and the facts on the ground. Pundits
compared the summit to Pearl Harbor and
9/11 , with some even reaching for the brass ring of the Holocaust by likening it to
Kristallnacht , while
polls revealed the American people reallydidn't care .
Worse, it laid bare the collusion between the media and their Deep State handlers –
the central dissemination point for the headlines, down to the same phrases, that led to every
outlet claiming Trump had "thrown the Intelligence Community under the bus" by refusing to
embrace the Russia-hacked-our-democracy narrative during his press conference with Putin.
Leaving aside the sudden ubiquity of "Intelligence Community" in our national discourse –
as if this network of spies and murderous thugs is Mr. Rogers' Neighborhood – no one
seriously believes every pundit came up with "throws under the bus" as the proper way of
describing that press conference.
The same central control was apparent in the unanimous condemnations of Putin – that
he murders
journalists , breaks
international agreements , uses bannedchemical
weapons ,
kills women and children
in Syria , and, of course,
meddles in elections . For every single establishment pundit to exhibit such a breathtaking
lack of insight into their own government's misdeeds is highly unlikely. Many of these same
talking heads remarked in horror on Sinclair Broadcasting's Orwellian "prepared statement"
issuing forth from the mouths of hundreds of stations' anchors at once. Et tu, Anderson
Cooper?
The media frenzy was geared toward sparking a popular revolt, with tensions already running
high from the previous media frenzy about family separation at the border (though only one
MSNBC segment seemed to recall that they should still care about that, and belatedly included
some footage of kids
behind a fence wrapped in Mylar blankets). Rachel Maddow , armed with the crocodile tears that
served her so well during the family-separation fracas, exhorted her faithful cultists to
do something.
Meanwhile, national-security neanderthal John Brennan all but called for a coup, condemning the
president for the unspeakable "high crimes and misdemeanors" of seeking to improve relations
with the world's second-largest nuclear power. He called on Pompeo and Bolton, the two biggest
warmongers in a Trump administration bristling with warmongers, to resign in protest. This
would have been a grand slam for world peace, but alas, it was not to be. Even those two
realize what a has-been Brennan is.
Congress wasted no time jumping on the Treason bandwagon, led by Chuck Schumer conjuring
the spectre of the KGB, Marco Rubio as neocon point-man (one imagines Barbara Bush rolling in
her grave at his usurpation of Jeb's rightful role) proposing locked-and-loaded sanctions in
case of future "meddling," and John McCain , still desperate to take the rest of the world with
him before he finally kicks a long-overdue bucket, condemning the "disgraceful" display of two
heads of state trying to come to an agreement about matters of mutual interest. The Pentagon
has invested a lot of time and money in
positioning Russia as Public Enemy #1, and for Trump to put his foot in it by making nice
with Putin might diminish the size of their weapons contracts – or the willingness of the
American people to tolerate more than half of every tax dollar disappearing down an unaccountable
hole . Peace? Eh, who needs it. Cash , motherfucker.
Trump's grip on his long-elusive spine was only temporary, and he held another press
conference upon returning home to reiterate his trust in the intelligence agencies that have
made no secret of their utter loathing for him since day one. When the lights went out at the
climactic moment, it became clear for anyone who still hadn't gotten the message who was
running the show here (and Trump, to his credit, actually joked about it). The Intelligence
Community believes it is God, and it hath smote Trump good. Smelling blood in the water, the
media redoubled their shrieking for several days, and crickets.
On to the Playmates .
Sacha Baron Cohen 's latest series, "Who is America," targeted Ted Koppel for one segment.
Koppel cut the interview short after smelling a rat and expressed his
high-minded concern that Cohen's antics would hurt Americans' trust in reporters. But after
a week of the entire media establishment screaming that the sky is falling while the heavens
remain firmly in place, Cohen is clearly the least of their problems. At least he's funny.
*
Helen Buyniski is a journalist and photographer based in New York City. She covers
politics, sociology, and other anthropological/cultural phenomena. Helen has a BA in Journalism
from New School University and also studied at Columbia University and New York University.
Find more of her work at http://www.helenofdestroy.com and http://medium.com/@helen.buyniski .
Not only "An economic system that rewards psychopathic personality traits has changed our
ethics and our personalities", it crushes the will to resist presenting psychopathic dictate in
forms that make it difficult. Such as performance reviews waterboarding or putting individual in
the way too complex and self-contradictory Web of regulations.
Notable quotes:
"... An economic system that rewards psychopathic personality traits has changed our ethics and our personalities. ..."
"... 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. ..."
"... 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. ..."
"... The current economic system is bringing out the worst in us. ..."
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.
Panic 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.
...what?
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.
Capitalism cannot differentiate between honest competition and cheating. Since humans will
cheat to win, capitalism has become survival of the worst not the best.
The 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.
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.
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'.
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.
Granted, they aren't social libertarians, but then, in the US, libertarians don't seem to
be either.
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.
The thing about selfishness and a brutal form of dog eat dog capitalism.
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.
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.
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.
"... Divine right, infalibility of Pope and Kings over the poor 99% / Divine right and infalibility of corporations and the invisible hand of the market over the 99%. Thank you ..."
"... They devised the scam of privatization to get the money and TOOK IT GLOBAL, getting money from our country and many others that could issue money with almost no constraints (meaning that the constraint is 'what is physically possible', or put another way, real resources are the constraint). ..."
"... But of course they needed plausible LIES to dupe the public, right? And so they pretended that our federal money is finite and 'like a household budget' to dupe us so they could implement their scam. They lie about our national 'debt', for example; it is actually our NATIONAL SAVINGS ACCOUNT. They lie about having to raise taxes in order to have nice things. Every fearmongering thing they tell us is a LIE – about the deficit, about 'can't afford', about 'have to make cuts to some programs', and on and on." ..."
"... I might add that we citizens of the U.S. are more often than not referred to by the media and government officials as consumers. An Orwellian shift that many haven't even noticed, yet these two definitions are so completely different, while the consequence is the denuding of the meaning of what a citizen is and is replaced with the corporate ideal that a citizen is nothing more than a cog, a consumer, and in essence citizenship is irrelevant in a globalized oligarchy. ..."
Divine right, infalibility of Pope and Kings over the poor 99% / Divine right and
infalibility of corporations and the invisible hand of the market over the 99%. Thank
you
Unfettered Fire , July 4, 2018 at 7:52 am
The latest revolt has been the Revolt of the Elites these past 40 years:
"Basically, the only reason we do not have good things like most other advanced countries
have is because the greedy sociopaths running things for decades wanted our unlimited federal
money for themselves.
Unlimited money? HOW CAN THAT BE? Yes, since the 70s, they understood that the federal
government could issue any amount of money for anything that is physically possible.* And
they wanted that money for themselves instead of using our money for the good of all as
directed by our Constitution (Article 1, Section 8).
They devised the scam of privatization to get the money and TOOK IT GLOBAL, getting money
from our country and many others that could issue money with almost no constraints (meaning
that the constraint is 'what is physically possible', or put another way, real resources are
the constraint).
But of course they needed plausible LIES to dupe the public, right? And so they pretended
that our federal money is finite and 'like a household budget' to dupe us so they could
implement their scam. They lie about our national 'debt', for example; it is actually our
NATIONAL SAVINGS ACCOUNT. They lie about having to raise taxes in order to have nice things.
Every fearmongering thing they tell us is a LIE – about the deficit, about 'can't
afford', about 'have to make cuts to some programs', and on and on."
I might add that we citizens of the U.S. are more often than not referred to by the media
and government officials as consumers. An Orwellian shift that many haven't even noticed, yet
these two definitions are so completely different, while the consequence is the denuding of
the meaning of what a citizen is and is replaced with the corporate ideal that a citizen is
nothing more than a cog, a consumer, and in essence citizenship is irrelevant in a globalized
oligarchy.
Half 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.
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.
Victim 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.
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.
This 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.
I'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.
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.]
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
"... 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. ..."
"... 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. ..."
"... 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 ..."
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.
"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
"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
Notable quotes:
"... 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 ..."
"... 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. ..."
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.
perfect stranger:
"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.
DownSouth:
perfect stranger,
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.
Examples:
•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?
perfect stranger:
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.
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
DownSouth:
Rex,
I agree.
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."
JTFaraday:
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.
attempter:
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.
psychohistorian:
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.
Ishmael:
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.
Lidia:
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).
Hosswire
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.
Ishmael:
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.
Mannwich:
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?
Ishmael:
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).
Ishmael:
Birch:
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.
davver:
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?
Escariot:
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.
Mickey Marzick:
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.
Eric:
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!
James:
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
damien:
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.
youniquelikeme:
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.
Hosswire:
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.
Kit:
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.
Ming:
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.
Nexus:
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.
S P:
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.
"... 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. ..."
Upward 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.
"... 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. ..."
"... 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. ..."
"... 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). ..."
"... 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. ..."
"... 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 ..."
"... 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 ..."
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...
Chris Hedges published this book eight years ago and the things he predicted have sadly been
realized
Notable quotes:
"... his screed is a liberating tonic against the crazy-making double-speak and the lies Americans are sold by our country's elite in order to distract us from the true threat and nature of the Corporate State, from the cult of celebrity, to how our nation's Universities have been hijacked to serve the interests, not of the public, but of our corporate overlords. It explains the self-same conditions in all aspects of our society and culture that we now must face, the ever-shrinking flame of enlightenment being exchanged for the illusory shadows on a cave wall. ..."
"... He fearlessly and incisively calls us out on the obvious farce our democracy has become, how we got here, and highlights the rapidly closing window in which we have to do something to correct it. It is a revelation, and yet he merely states the obvious. The empire has no clothes. ..."
"... One of the most powerful aspects of this book was in regard to how our Universities are run these days. I may be in the minority, but I experienced a life-changing disillusionment when I gained entrance to a prestigious "elite" University. Instead of drawing the best and the brightest, or being a place where scholarship was valued, where students were taught critical thinking skills, the University I attended was nothing more than an expensive diploma mill for the children of the wealthy. In the eyes of the University, students were not minds to be empowered and developed, but walking dollar signs. ..."
"... Instead of critical thinking, students were taught to OBEY, not to question authority, and then handed a piece of paper admitting them to the ruling class that is destroying America without a moral compass. Selfishness, deceit, disregard for the common good, and a win-at-all-costs attitude were rewarded. Empathy, curiosity, dissent, and an honest, intellectually rigorous evaluation of ourselves and our world were punished. Obviously I am not the only one to whom this was cause to fear for the future of our country. ..."
"... The chapter involving the porn trade that is run by large corporations such as AT&T and GM (the car maker, for crying out loud) was an especially dark, profanity-laced depiction of the abuse and moral decay of American society . ..."
"... He is correct in his belief that the continual barrage of psuedo-events and puffery disguised as news (especially television) has conditioned most of Americans to be non-critical thinkers. ..."
"... Entertainment, consumption and the dangerous illusion that the U.S. is the best in the world at everything are childish mindsets. ..."
"... The are the puppet masters." As extreme as that is, he is more credible when he says, "Commodities and celebrity culture define what it means to belong, how we recognize our place in society, and how we conduct our lives." I say 'credible' because popular and mass culture's influence are creating a world where substance is replaced by questionable style. ..."
"... Celebrity and connectivity are both ways of becoming known. This is what the contemporary self wants. It wants to be recognized, wants to be connected: It wants to be visible. If not to the millions, on Survivor or Oprah, then to the hundreds, on Twitter or Facebook. ..."
"... Visibility has replaced substance and accomplishment; packaging over product, sizzle not steak. Chris Rojek calls this "the cult of distraction" where society is consumed by the vacuous and the vapid rather than striving for self-awareness, accomplishment and contribution ("Propaganda has become a substitute for ideas and ideology."). Hedges builds on Rojek's descriptor by suggesting we are living in a "culture of illusion" which impoverishes language, makes us childlike, and is basically dumbing us all down. ..."
"... Today's delusionary and corrupted officials, corporate and government, are reminiscent of the narratives penned by Charles Dickens. Alexander Hamilton referred to the masses as a "great beast" to be kept from the powers of government. ..."
"... Edmund Burke used propaganda to control "elements of society". Walter Lippmann advised that "the public must be kept in its place". Yet, many Americans just don't get it. ..."
"... Divide and conquer is the mantra--rich vs. poor; black vs. white. According to Norm Chomsky's writings, "In 1934, William Shepard argued that government should be in the hands of `aristocracy and intellectual power' while the `ignorant, and the uninformed and the antisocial element' must not be permitted to control elections...." ..."
"... The appalling statistics and opinions outlined in the book demonstrate the public ignorance of the American culture; the depth and extent of the corporatocracy and the related economic malaise; and, the impact substandard schools have on their lives. ..."
"... This idea was recently usurped by the U.S. Supreme Court where representative government is called to question, rendering "our" consent irrelevant. Every voting election is an illusion. Each election, at the local and national level, voters never seemingly "miss an opportunity to miss an opportunity" to eliminate irresponsible and unresponsive officials. ..."
"... Walt Kelly's quote "We have met the enemy and he is us" prevails! ..."
"... It's also hard to follow at times as Hedges attempts to stress the connections between pop culture and social, political. and economic policy. Nor is Hedges a particularly stylish writer (a sense of humor would help). ..."
"... The stomach-turning chapter on trends in porn and their relationship to the torture of prisoners of war is a particularly sharp piece of analysis, and all of the other chapters do eventually convince (and depress). ..."
Hedges cogently and systematically dismantles the most pernicious cultural delusions of
our era and lays bare the pitiful truths that they attempt to mask. This book is a
deprogramming manual that trims away the folly and noise from our troubled society so that
the reader can focus on the most pressing matters of our time.
Despite the dark reality Hedges excavates, his screed is a liberating tonic against
the crazy-making double-speak and the lies Americans are sold by our country's elite in order
to distract us from the true threat and nature of the Corporate State, from the cult of
celebrity, to how our nation's Universities have been hijacked to serve the interests, not of
the public, but of our corporate overlords. It explains the self-same conditions in all
aspects of our society and culture that we now must face, the ever-shrinking flame of
enlightenment being exchanged for the illusory shadows on a cave wall.
As a twenty-something caught in the death-throes of American Empire and culture, I have
struggled to anticipate where our country and our world are heading, why, and what sort of
life I can expect to build for myself. Hedges presents the reader with the depressing, yet
undeniable truth of the forces that have coalesced to shape the world in which we now find
ourselves. The light he casts is searing and relentless. He fearlessly and incisively
calls us out on the obvious farce our democracy has become, how we got here, and highlights
the rapidly closing window in which we have to do something to correct it. It is a
revelation, and yet he merely states the obvious. The empire has no clothes.
One of the most powerful aspects of this book was in regard to how our Universities
are run these days. I may be in the minority, but I experienced a life-changing
disillusionment when I gained entrance to a prestigious "elite" University. Instead of
drawing the best and the brightest, or being a place where scholarship was valued, where
students were taught critical thinking skills, the University I attended was nothing more
than an expensive diploma mill for the children of the wealthy. In the eyes of the
University, students were not minds to be empowered and developed, but walking dollar
signs.
Instead of critical thinking, students were taught to OBEY, not to question authority,
and then handed a piece of paper admitting them to the ruling class that is destroying
America without a moral compass. Selfishness, deceit, disregard for the common good, and a
win-at-all-costs attitude were rewarded. Empathy, curiosity, dissent, and an honest,
intellectually rigorous evaluation of ourselves and our world were punished. Obviously I am
not the only one to whom this was cause to fear for the future of our country.
Five stars is not enough. Ever since I began reading Empire of Illusion, I have insisted
friends and family pick up a copy, too. Everyone in America should read this incredibly
important book.
Mr. Hedges is in one heck of a foul mood. His raging against the evolving of American
democracy into an oligarchy is accurate, but relentlessly depressing. The author focuses on
some of our most horrid characteristics: celebrity worship; "pro" wrestling; the brutal porn
industry; Jerry Springer-like shows; the military-industrial complex; the moral void of elite
colleges such as Yale, Harvard, Berkeley and Princeton; optimistic-ladened pop psychology;
and political/corporate conformity.
Mr. Hedges grim assessment put me in a seriously foul mood. The chapter involving the
porn trade that is run by large corporations such as AT&T and GM (the car maker, for
crying out loud) was an especially dark, profanity-laced depiction of the abuse and moral
decay of American society .
He is correct in his belief that the continual barrage of psuedo-events and puffery
disguised as news (especially television) has conditioned most of Americans to be
non-critical thinkers.
Entertainment, consumption and the dangerous illusion that the U.S. is the best in the
world at everything are childish mindsets.
The oddest part of Mr. Hedges' book is the ending. The last three pages take such an
unexpectedly hard turn from "all is lost" to "love will conquer," I practically got whiplash.
Overall, the author should be commended for trying to bring our attention to what ails our
country and challenging readers to wake up from their child-like illusions.
Now, time for me to go run a nice, warm bath and where did I put those razor
blades?...
I must say I was captivated by the author's passion, eloquence and insight. This is not an
academic essay. True, there are few statistics here and there and quotes from such and such
person, but this is not like one of those books that read like a longer version of an
academic research paper. The book is more of author's personal observations about American
society. Perhaps that is where its power comes from.
Some might dismiss the book as nothing more than an opinion piece, but how many great
books and works out there are opinion pieces enhanced with supporting facts and
statistics?
The book is divided into five chapters. Chapter one is about celebrity worship and how far
people are willing to humiliate themselves and sacrifice their dignity for their five minutes
of fame. But this is not just about those who are willing to make idiots out of themselves
just to appear on television. This is about how the fascination with the world of rich and
famous distracts the society from the important issues and problems and how it creates
unhealthy and destructive desire to pursue wealth and fame. And even for those few who do
achieve it, their lives are far from the bliss and happiness shown in movies. More than one
celebrity had cursed her life.
Chapter two deals with porn. It offers gutwrenching, vomit inducing descriptions of lives
and conditions in the porn industry. But the damage porn does goes far beyond those working
in the "industry". Porn destroys the love, intimacy and beauty of sex. Porn reduces sex to an
act of male dominance, power and even violence. Unfortunately, many men, and even women, buy
into that and think that the sex seen in porn is normal and this is how things should be.
After reading this chapter, I will never look at porn the same way again. In fact, I
probably will never look at porn at all.
Chapter three is about education. It focuses mostly on college level education and how in
the past few decades it had increasingly changed focus from teaching students how to be
responsible citizens and good human beings to how to be successful, profit seeking, career
obsessed corporate/government drones. The students are taught that making money and career
building are the only thing that matters. This results in professionals who put greed and
selfishness above everything else and mindlessly serve a system that destroys the society and
the whole planet. And when they are faced with problems (like the current economic crisis)
and evidence that the system is broken, rather than rethink their paradigm and consider that
perhaps they were wrong, they retreat further into old thinking in search of ways to
reinforce the (broken) system and keep it going.
Chapter four is my favorite. It is about positive thinking. As someone who lives with a
family member who feeds me positive thinking crap at breakfast, lunch and supper, I enjoyed
this chapter very much. For those rare lucky few who do not know what positive thinking is,
it can be broadly defined as a belief that whatever happens to us in life, it happens because
we "attracted" it to ourselves. Think about it as karma that affects us not in the next life,
but in this one. The movement believes that our conscious and unconscious thoughts affect
reality. By assuming happy, positive outlook on life, we can affect reality and make good
things happen to us.
Followers of positive thinking are encouraged/required to purge all negative emotions,
never question the bad things that happen to them and focus on thinking happy thoughts.
Positive thinking is currently promoted by corporations and to lesser extent governments to
keep employees in line. They are rendered docile and obedient, don't make waves (like fight
for better pay and working conditions) and, when fired, take it calmly with a smile and never
question corporate culture.
Chapter five is about American politics and how the government and the politicians had
sold themselves out to corporations and business. It is about imperialism and how the
government helps the corporations loot the country while foreign wars are started under the
pretext of defense and patriotism, but their real purpose is to loot the foreign lands and
fill the coffers of war profiteers. If allowed to continue, this system will result in
totalitarianism and ecological apocalypse.
I have some objections with this chapter. While I completely agree about the current state
of American politics, the author makes a claim that this is a relatively recent development
dating roughly to the Vietnam War. Before that, especially in the 1950s, things were much
better. Or at least they were for the white men. (The author does admit that 1950s were not
all that great to blacks, women or homosexuals.)
While things might have gotten very bad in the last few decades, politicians and
governments have always been more at the service of Big Money rather than the common
people.
And Vietnam was not the first imperialistic American war. What about the conquest of Cuba
and Philippines at the turn of the 20th century? And about all those American "adventures" in
South America in the 19th century. And what about the westward expansion and extermination of
Native Americans that started the moment the first colonists set their foot on the
continent?
But this is a minor issue. My biggest issue with the book is that it is a powerful
denunciation, but it does not offer much in terms of suggestions on how to fix the problems
it is decrying. Criticizing is good and necessary, but offering solutions is even more
important. You can criticize all you want, but if you cannot suggest something better, then
the old system will stay in place.
The author does write at the end a powerful, tear inducing essay on how love conquers all
and that no totalitarian regime, no matter how powerful and oppressive, had ever managed to
crush hope, love and the human spirit. Love, in the end, conquers all.
That is absolutely true. But what does it mean in practice? That we must keep loving and
doing good? Of course we must, but some concrete, practical examples of what to do would be
welcome.
An excellent and sobering view at the decline of reason and literacy in modern society
This is an absolutely superb work that documents how our society has been subverted by
spectacle, glitz, celebrity, and the obsession with "fame" at the expense of reality,
literacy, reason, and actual ability. Hedges lays it all out in a very clear and thought
provoking style, using real world examples like pro wrestling and celebrity oriented
programming to showcase how severely our society has declined from a forward thinking,
literate one into a mass of tribes obsessed with stardom and money.
Even better is that the author's style is approachable and non judgemental. This isn't an
academic talking down to the masses, but a very solid reporter presenting findings in an
accurate, logical style.
Every American should read this, and then consider whether to buy that glossy celebrity
oriented magazine or watch that "I want to be a millionaire" show. The lifestyle and choices
being promoted by the media, credit card companies, and by the celebrity culture in general,
are toxic and a danger to our society's future.
The various ills impacting society graphically painted by Chris Hedges are attributed to a
lack of literacy. However, it is much more complex, layered, and inter-related. By examining
literacy, love, wisdom, happiness, and the current state of America, the author sets out to
convince the reader that our world is intellectually crumbling. He picks aspects of our
society that clearly offer questionable value: professional wrestling, the pornographic film
industry (which is provided in bizarre repetitive graphic detail), gambling, conspicuous
consumption, and biased news reporting to name a few.
The front of the end of the book was the most compelling. Especially when Hedges strays
into near conspiracy with comments such as this: "Those who manipulate the shadows that
dominate our lives are the agents, publicists, marketing departments, promoters, script
writers, television and movie producers, advertisers, video technicians, photographers,
bodyguards, wardrobe consultants, fitness trainers, pollsters, public announcers, and
television news personalities who create the vast stage for illusion. The are the puppet
masters." As extreme as that is, he is more credible when he says, "Commodities and celebrity
culture define what it means to belong, how we recognize our place in society, and how we
conduct our lives." I say 'credible' because popular and mass culture's influence are
creating a world where substance is replaced by questionable style.
What resonated most in the book is a passage taken from William Deresiewicz's essay The
End of Solitude: "What does the contemporary self want? The camera has created a culture of
celebrity; the computer is creating a culture of connectivity. As the two technologies
converge -- broadband tipping the Web from text to image, social-networking sites spreading
the mesh of interconnection ever wider -- the two cultures betray a common impulse.
Celebrity and connectivity are both ways of becoming known. This is what the
contemporary self wants. It wants to be recognized, wants to be connected: It wants to be
visible. If not to the millions, on Survivor or Oprah, then to the hundreds, on Twitter or
Facebook. This is the quality that validates us, this is how we become real to ourselves
-- by being seen by others. The great contemporary terror is anonymity. If Lionel Trilling
was right, if the property that grounded the self, in Romanticism, was sincerity, and in
modernism it was authenticity, then in postmodernism it is visibility."
Visibility has replaced substance and accomplishment; packaging over product, sizzle
not steak. Chris Rojek calls this "the cult of distraction" where society is consumed by the
vacuous and the vapid rather than striving for self-awareness, accomplishment and
contribution ("Propaganda has become a substitute for ideas and ideology."). Hedges builds on
Rojek's descriptor by suggesting we are living in a "culture of illusion" which impoverishes
language, makes us childlike, and is basically dumbing us all down.
This is definitely a provocative contribution and damning analysis of our society that
would be a great choice for a book club. It would promote lively debate as conclusions and
solutions are not easily reached.
A book that needs to be read, even if it's only half true.
Empire of Illusion might be the most depressing book I've ever read. Why? Because it
predicts the collapse of America and almost every word of it rings true.
I don't know if there's really anything new here; many of the ideas Hedges puts forth have
been floating around in the neglected dark corners of our national discourse, but Hedges
drags them all out into the daylight. Just about every social/cultural/economic/political ill
you can think of is mentioned at some point in the text and laid at the feet of the villains
whose insatiable greed has destroyed this once-great country. Hedges is bold. He predicts
nothing less than the end of America. Indeed, he claims America has already ended. The
American Dream is nothing more than an illusion being propped up by wealthy elites obsessed
with power and the preservation of their lifestyle, a blind academia that has forgotten how
to critique authority, and a government that is nothing more than the puppet of corporations.
Meanwhile, mindless entertainments and a compliant news media divert and mislead the working
and middle classes so they don't even notice that they are being raped to death by the
power-elite and the corporations.
(Don't misunderstand. This is no crack-pot conspiracy theory. It's not about secret
quasi-mystical cabals attempting world domination. Rather, Hedges paints a credible picture
of our culture in a state of moral and intellectual decay, and leaders corrupted by power and
greed who have ceased to act in the public interest.)
At times Hedges seems to be ranting and accusing without providing evidence or examples to
substantiate his claims. But that might only be because his claims have already been
substantiated individually elsewhere, and Hedges's purpose here is a kind of grand synthesis
of many critical ideas. Indeed, an exhaustive analysis of all the issues he brings forth
would require volumes rather than a single book. In any case, I challenge anyone to read this
book, look around honestly at what's happening in America, and conclude that Hedges is
wrong.
One final note: this book is not for the squeamish. The chapter about pornography is
brutally explicit. Still, I think it is an important book, and it would be good if a lot more
people would read it, discuss it, and thereby become dis-illusioned.
Chris Hedges book, "Empire of Illusion" is a stinging assessment and vivid indictment of
America's political and educational systems; a well-told story. I agree with his views but
wonder how they can be reversed or transformed given the economic hegemony of the
corporations and the weight of the entrenched political parties. Very few solutions were
provided.
Corporations will continue to have a presence and set standards within the halls of
educational and governmental institutions with impunity. Limited monetary measures, other
than governmental, exist for public educational institutions, both secondary and
post-secondary. Historically, Roman and Greek political elitists operated in a similar manner
and may have set standards for today's plutocracy. Plebeian societies were helpless and
powerless, with few options, to enact change against the political establishment. Given the
current conditions, America is on a downward spiral to chaos.
His book is a clarion call for action. Parents and teachers have warned repeatedly that
too much emphasis is placed on athletic programs at the expense of academics. Educational
panels, books and other experts have done little to reform the system and its intransigent
administrators.
Today's delusionary and corrupted officials, corporate and government, are reminiscent
of the narratives penned by Charles Dickens. Alexander Hamilton referred to the masses as a
"great beast" to be kept from the powers of government.
Edmund Burke used propaganda to control "elements of society". Walter Lippmann advised
that "the public must be kept in its place". Yet, many Americans just don't get it.
They continue to be hood-winked by politicians using uncontested "sound bites" and
"racially-coded" phrases to persuade voters.
Divide and conquer is the mantra--rich vs. poor; black vs. white. According to Norm
Chomsky's writings, "In 1934, William Shepard argued that government should be in the hands
of `aristocracy and intellectual power' while the `ignorant, and the uninformed and the
antisocial element' must not be permitted to control elections...."
The appalling statistics and opinions outlined in the book demonstrate the public
ignorance of the American culture; the depth and extent of the corporatocracy and the related
economic malaise; and, the impact substandard schools have on their lives. This is
further exemplified by Jay Leno's version of "Jaywalking". On the streets, he randomly
selects passersby to interview, which seems to validate much of these charges.
We are all culpable. We are further susceptible to illusions. John Locke said, "Government
receives its just powers from the consent of the governed".
This idea was recently usurped by the U.S. Supreme Court where representative
government is called to question, rendering "our" consent irrelevant. Every voting election
is an illusion. Each election, at the local and national level, voters never seemingly "miss
an opportunity to miss an opportunity" to eliminate irresponsible and unresponsive
officials.
Walt Kelly's quote "We have met the enemy and he is us" prevails!
There are many flaws with Hedges' book. For one thing, he is given to writing sermons (his
father was a minister), hurling down denunciations in the manner of the prophet Amos. The
book also tends to be repetitious, as Hedges makes the same general statements over and over.
It's also hard to follow at times as Hedges attempts to stress the connections between
pop culture and social, political. and economic policy. Nor is Hedges a particularly stylish
writer (a sense of humor would help).
His last-second "happy ending" (something like: we're all doomed, but eventually,
somewhere down the line, love will prevail beacuse it's ultimately the strongest power on
earth) is, to say the least, unconvincing.
SO why am I recommending this book? Because in spite of its flaws (and maybe even because
of them), this is a powerful depiction of the state of American society. The book does get to
you in its somewhat clumsy way.
The stomach-turning chapter on trends in porn and their relationship to the torture of
prisoners of war is a particularly sharp piece of analysis, and all of the other chapters do
eventually convince (and depress).
This book will not exactly cheer you up, but at least it will give you an understanding of
where we are (and where we're heading).
The idea the a scientist can be a gangster was probably first presented by
Sir Arthur Conan Doyle
in his famous Sherlock Holmes
detective stories. Neoliberalism just made this a reality. Mass production of "scientific gangsters"
is an immanent feature of neoliberalism.
Notable quotes:
"... 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 ..."
"... 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. ..."
"... 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 ..."
"... That means transforming business education, including the replacement of agency theory with innovation theory ..."
"... 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. ..."
"... 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. ..."
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
the rest of us lose .
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.
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.
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.
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.
>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".
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".
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.
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.
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.
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.
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?
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.
"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.
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 .
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 "
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.
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.
"... 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. ..."
"... 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. ..."
"... Free 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. ..."
"... 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. ..."
Krugman'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.)
[ 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.
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... , -1
Free 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
"... The book was The Constitution of Liberty by Frederick Hayek . Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism . It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone. ..."
"... But by the time Hayek came to write The Constitution of Liberty, the network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set out to close the gap. ..."
"... He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands. ..."
"... The general thrust is about the gradual hollowing out of the middle class (or more affluent working class, depending on the analytical terms being used), about insecurity, stress, casualisation, rising wage inequality. ..."
"... So Hayek, I feel, is like many theoreticians, in that he seems to want a pure world that will function according to a simple and universal law. The world never was, and never will be that simple, and current economics simply continues to have a blindspot for externalities that overwhelm the logic of an unfettered so-called free market. ..."
"... J.K. Galbraith viewed the rightwing mind as predominantly concerned with figuring out a way to justify the shift of wealth from the immense majority to an elite at the top. I for one regret acutely that he did not (as far as I know) write a volume on his belief in progressive taxation. ..."
"... The system that Clinton developed was an inheritance from George H.W. Bush, Reagan (to a large degree), Carter, with another large assist from Nixon and the Powell Memo. ..."
"... What's changed is the distribution of the gains in GDP growth -- that is in no small part a direct consequence of changes in policy since the 1970s. It isn't some "market place magic". We have made major changes to tax laws since that time. We have weakened collective bargaining, which obviously has a negative impact on wages. We have shifted the economy towards financial services, which has the tendency of increasing inequality. ..."
"... Wages aren't stagnating because people are working less. Wages have stagnated because of dumb policy choices that have tended to incentives looting by those at the top of the income distribution from workers in the lower parts of the economy. ..."
"... "Neoliberalism" is entirely compatible with "growth of the state". Reagan greatly enlarged the state. He privatized several functions and it actually had the effect of increasing spending. ..."
"... When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market. ..."
"... As for the rest, it's the usual practice of gathering every positive metric available and somehow attributing it to neoliberalism, no matter how tenuous the threads, and as always with zero rigour. Supposedly capitalism alone doubled life expectancy, supports billions of extra lives, invented the railways, and provides the drugs and equipment that keep us alive. As though public education, vaccines, antibiotics, and massive availability of energy has nothing to do with those things. ..."
"... I think the damage was done when the liberal left co-opted neo-liberalism. What happened under Bill Clinton was the development of crony capitalism where for example the US banks were told to lower their credit standards to lend to people who couldn't really afford to service the loans. ..."
The events that led to Donald Trump's election started in England in 1975. At a meeting a few months after Margaret Thatcher became
leader of the Conservative party, one of her colleagues, or so the story goes, was explaining what he saw as the core beliefs of
conservatism. She snapped open her handbag, pulled out a dog-eared book, and
slammed it on the table . "This is what we believe," she said. A political revolution that would sweep the world had begun.
The book was The Constitution
of Liberty by Frederick Hayek . Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an
outright racket.
The philosophy
was called neoliberalism . It saw competition as the defining characteristic of human relations. The market would discover a
natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design.
Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive.
Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.
This, at any rate, is how it was originally conceived. But by the time Hayek came to write The Constitution of Liberty, the
network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of
defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set
out to close the gap.
He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions
as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour
of the wealthy and powerful, intrude on the absolute freedom from coercion he demands.
Democracy, by contrast, "is not an ultimate or absolute value". In fact, liberty depends on preventing the majority from exercising
choice over the direction that politics and society might take.
He justifies this position by creating a heroic narrative of extreme wealth. He conflates the economic elite, spending their money
in new ways, with philosophical and scientific pioneers. Just as the political philosopher should be free to think the unthinkable,
so the very rich should be free to do the undoable, without constraint by public interest or public opinion.
The ultra rich are "scouts", "experimenting with new styles of living", who blaze the trails that the rest of society will follow.
The progress of society depends on the liberty of these "independents" to gain as much money as they want and spend it how they wish.
All that is good and useful, therefore, arises from inequality. There should be no connection between merit and reward, no distinction
made between earned and unearned income, and no limit to the rents they can charge.
Inherited wealth is more socially useful than earned wealth: "the idle rich", who don't have to work for their money, can devote
themselves to influencing "fields of thought and opinion, of tastes and beliefs". Even when they seem to be spending money on nothing
but "aimless display", they are in fact acting as society's vanguard.
Hayek softened his opposition to monopolies and hardened his opposition to trade unions. He lambasted progressive taxation and
attempts by the state to raise the general welfare of citizens. He insisted that there is "an overwhelming case against a free health
service for all" and dismissed the conservation of natural resources. It should come as no surprise to those who follow such matters
that he was awarded
the Nobel prize for economics .
By the time Thatcher slammed his book on the table, a lively network of thinktanks, lobbyists and academics promoting Hayek's
doctrines had been established on both sides of the Atlantic,
abundantly financed by some of the world's richest people and
businesses , including DuPont, General Electric, the Coors brewing company, Charles Koch, Richard Mellon Scaife, Lawrence Fertig,
the William Volker Fund and the Earhart Foundation. Using psychology and linguistics to brilliant effect, the thinkers these people
sponsored found the words and arguments required to turn Hayek's anthem to the elite into a plausible political programme.
Thatcherism and Reaganism were not ideologies in their own right: they were just two faces of neoliberalism. Their massive tax
cuts for the rich, crushing of trade unions, reduction in public housing, deregulation, privatisation, outsourcing and competition
in public services were all proposed by Hayek and his disciples. But the real triumph of this network was not its capture of the
right, but its colonisation of parties that once stood for everything Hayek detested.
Bill Clinton and Tony Blair did not possess a narrative of their own. Rather than develop a new political story, they thought
it was sufficient to
triangulate
. In other words, they extracted a few elements of what their parties had once believed, mixed them with elements of what their
opponents believed, and developed from this unlikely combination a "third way".
It was inevitable that the blazing, insurrectionary confidence of neoliberalism would exert a stronger gravitational pull than
the dying star of social democracy. Hayek's triumph could be witnessed everywhere from Blair's expansion of the private finance initiative
to Clinton's
repeal of the Glass-Steagal Act , which had regulated the financial sector. For all his grace and touch, Barack Obama, who didn't
possess a narrative either (except "hope"), was slowly reeled in by those who owned the means of persuasion.
As I warned
in April, the result is first disempowerment then disenfranchisement. If the dominant ideology stops governments from changing
social outcomes, they can no longer respond to the needs of the electorate. Politics becomes irrelevant to people's lives; debate
is reduced to the jabber of a remote elite. The disenfranchised turn instead to a virulent anti-politics in which facts and arguments
are replaced by slogans, symbols and sensation. The man who sank Hillary Clinton's bid for the presidency was not Donald Trump. It
was her husband.
The paradoxical result is that the backlash against neoliberalism's crushing of political choice has elevated just the kind of
man that Hayek worshipped. Trump, who has no coherent politics, is not a classic neoliberal. But he is the perfect representation
of Hayek's "independent"; the beneficiary of inherited wealth, unconstrained by common morality, whose gross predilections strike
a new path that others may follow. The neoliberal thinktankers are now swarming round this hollow man, this empty vessel waiting
to be filled by those who know what they want. The likely result is the demolition of our remaining decencies,
beginning with the agreement to limit global warming .
Those who tell the stories run the world. Politics has failed through a lack of competing narratives. The key task now is to tell
a new story of what it is to be a human in the 21st century. It must be as appealing to some who have voted for Trump and Ukip as
it is to the supporters of Clinton, Bernie Sanders or Jeremy Corbyn.
A few of us have been working on this, and can discern what may be the beginning of a story. It's too early to say much yet, but
at its core is the recognition that – as modern psychology and neuroscience make abundantly clear – human beings, by comparison with
any other animals, are both
remarkably social and
remarkably
unselfish . The atomisation and self-interested behaviour neoliberalism promotes run counter to much of what comprises human
nature.
Hayek told us who we are, and he was wrong. Our first step is to reclaim our humanity.
justamug -> Skytree 16 Nov 2016 18:17
Thanks for the chuckle. On a more serious note - defining neoliberalism is not that easy since it is not a laid out philosophy
like liberalism, or socialism, or communism or facism. Since 2008 the use of the word neoliberalism has increased in frequency
and has come to mean different things to different people.
A common theme appears to be the negative effects of the market on the human condition.
Having read David Harvey's book, and Phillip Mirowski's book (both had a go at defining neoliberalism and tracing its history)
it is clear that neoliberalism is not really coherent set of ideas.
ianfraser3 16 Nov 2016 17:54
EF Schumacher quoted "seek first the kingdom of God" in his epilogue of "Small Is Beautiful: a study of economics as if people
mattered". This was written in the early 1970s before the neoliberal project bit in the USA and the UK. The book is laced with
warnings about the effects of the imposition of neoliberalism on society, people and the planet. The predictions have largely
come true. New politics and economics needed, by leaders who place at the heart of their approach the premise, and fact, that
humans are "by comparison with any other animals, are both remarkably social and remarkably unselfish". It is about reclaiming
our humanity from a project that treats people as just another commodity.
Filipio -> YouDidntBuildThat 16 Nov 2016 17:42
Whoa there, slow down.
Your last post was questioning the reality of neoliberalism as a general policy direction that had become hegemonic across
many governments (and most in the west) over recent decades. Now you seem to be agreeing that the notion does have salience, but
that neoliberalism delivered positive rather than negative consequences.
Well, its an ill wind that blows nobody any good, huh?
Doubtless there were some positive outcomes for particular groups. But recall that the context for this thread is not whether,
on balance, more people benefited from neoliberal policies than were harmed -- an argument that would be most powerful only in
very utilitarian style frameworks of thought (most good for the many, or most harm for only the few). The thread is about the
significance of the impacts of neoliberalism in the rise of Trump. And in specific relation to privatisation (just one dimension
of neoliberalism) one key impact was downsizing (or 'rightsizing'; restructuring). There is a plethora of material, including
sociological and psychological, on the harm caused by shrinking and restructured work-forces as a consequence of privatisation.
Books have been written, even in the business management sector, about how poorly such 'change' was handled and the multiple deleterious
outcomes experienced by employees.
And we're still only talking about one dimension of neoliberalism! Havn't even touched on deregulation yet (notably, labour
market and financial sector).
The general thrust is about the gradual hollowing out of the middle class (or more affluent working class, depending on
the analytical terms being used), about insecurity, stress, casualisation, rising wage inequality.
You want evidence? I'm not doing your research for you. The internet can be a great resource, or merely an echo chamber. The
problem with so many of the alt-right (and this applies on the extreme left as well) is that they only look to confirm their views,
not read widely. Open your eyes, and use your search engine of choice. There is plenty out there. Be open to having your preconceptions
challenged.
RichardErskine -> LECKJ3000 16 Nov 2016 15:38
LECKJ3000 - I am not an economist, but surely the theoretical idealised mechanisms of the market are never realised in practice.
US subsidizing their farmers, in EU too, etc. And for problems that are not only externalities but transnational ones, the idea
that some Hayek mechanism will protect thr ozone layer or limit carbon emissions, without some regulation or tax.
Lord Stern called global warming the greatest market failure in history, but no market, however sophisticated, can deal with
it without some price put on the effluent of product (the excessive CO2 we put into the atmosphere).
As with Montreal and subsequent agreements, there is a way to maintain a level playing field; to promote different substances
for use as refrigerants; and to address the hole in ozone layer; without abandoning the market altogether. Simple is good, because
it avoids over-engineering the interventions (and the unintended consequences you mention).
The same could/ should be true of global warming, but we have left it so late we cannot wait for the (inevitable) fall of fossil
fuels and supremacy of renewables. We need a price on carbon, which is a graduated and fast rising tax essentially on its production
and/or consumption, which has already started to happen ( http://www.worldbank.org/content/dam/Worldbank/document/SDN/background-note_carbon-tax.pdf
), albeit not deep / fast / extensive enough, or international in character, but that will come, if not before the impacts really
bite then soon after.
So Hayek, I feel, is like many theoreticians, in that he seems to want a pure world that will function according to a simple
and universal law. The world never was, and never will be that simple, and current economics simply continues to have a blindspot
for externalities that overwhelm the logic of an unfettered so-called free market.
LionelKent -> greven 16 Nov 2016 14:59
And persistent. J.K. Galbraith viewed the rightwing mind as predominantly concerned with figuring out a way to justify the
shift of wealth from the immense majority to an elite at the top. I for one regret acutely that he did not (as far as I know)
write a volume on his belief in progressive taxation.
RandomLibertarian -> JVRTRL 16 Nov 2016 09:19
Not bad points.
When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more
expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would
have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market.
Do not forget that the USG, in WW2, took the deliberate step of allowing employers to provide health insurance as a tax-free
benefit - which it still is, being free even from SS and Medicare taxes. In the post-war boom years this resulted in the development
of a system with private rooms, almost on-demand access to specialists, and competitive pay for all involved (while the NHS, by
contrast, increasingly drew on immigrant populations for nurses and below). Next, the large sums of money in the system and a
generous court system empowered a vast malpractice industry. So to call our system in any way a consequence of a free market is
a misnomer.
Entirely state controlled health care systems tend to be even more cost-effective.
Read Megan McArdle's work in this area. The US has had similar cost growth since the 1970s to the rest of the world. The problem
was that it started from a higher base.
Part of the issue is that privatization tends to create feedback mechanism that increase the size of spending in programs.
Even Eisenhower's noted "military industrial complex" is an illustration of what happens when privatization really takes hold.
When government becomes involved in business, business gets involved in government!
Todd Smekens 16 Nov 2016 08:40
Albert Einstein said, "capitalism is evil" in his famous dictum called, "Why Socialism" in 1949. He also called communism,
"evil", so don't jump to conclusions, comrades. ;)
His reasoning was it distorts a human beings longing for the social aspect. I believe George references this in his statement
about people being "unselfish". This is noted by both science and philosophy.
Einstein noted that historically, the conqueror would establish the new order, and since 1949, Western Imperialism has continued
on with the predatory phase of acquiring and implementing democracy/capitalism. This needs to end. As we've learned rapidly, capitalism
isn't sustainable. We are literally overheating the earth which sustains us. Very unwise.
Einstein wrote, "Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to
protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate
abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures,
to comfort them in their sorrows, and to improve their conditions of life. Only the existence of these varied, frequently conflicting,
strivings accounts for the special character of a man, and their specific combination determines the extent to which an individual
can achieve an inner equilibrium and can contribute to the well-being of society."
Personally, I'm glad George and others are working on a new economic and social construct for us "human beings". It's time
we leave the predatory phase of "us versus them", and construct a new society which works for the good of our now, global society.
zavaell -> LECKJ3000 16 Nov 2016 06:28
The problem is that both you and Monbiot fail to mention that your "the spontaneous order of the market" does not recognize
externalities and climate change is outside Hayek's thinking - he never wrote about sustainability or the limits on resources,
let alone the consequences of burning fossil fuels. There is no beauty in what he wrote - it was a cold, mechanical model that
assumed certain human behaviour but not others. Look at today's money-makers - they are nearly all climate change deniers and
we have to have government to reign them in.
aLERNO 16 Nov 2016 04:52
Good, short and concise article. But the FIRST NEOLIBERAL MILESTONE WAS THE 1973 COUP D'ETAT IN CHILE, which not surprisingly
also deposed the first democratically-elected socialist government.
accipiter15 16 Nov 2016 02:34
A great article and explanation of the influence of Hayek on Thatcher. Unfortunately this country is still suffering the consequences
of her tenure and Osborne was also a proponent of her policies and look where we are as a consequence. The referendum gave the
people the opportunity to vent their anger and if we had PR I suspect we would have a greater turn-out and nearly always have
some sort of coalition where nothing gets done that is too hurtful to the population. As for Trump, again his election is an expression
of anger and desperation. However, the American voting system is as unfair as our own - again this has probably been the cause
of the low turn-out. Why should people vote when they do not get fair representation - it is a waste of time and not democratic.
I doubt that Trump is Keynsian I suspect he doesn't have an economic theory at all. I just hope that the current economic thinking
prevailing currently in this country, which is still overshadowed by Thatcher and the free market, with no controls over the city
casino soon collapses and we can start from a fairer and more inclusive base!
JVRTRL -> Keypointist 16 Nov 2016 02:15
The system that Clinton developed was an inheritance from George H.W. Bush, Reagan (to a large degree), Carter, with another
large assist from Nixon and the Powell Memo.
Bill Clinton didn't do it by himself. The GOP did it with him hand-in-hand, with the only resistance coming from a minority
within the Democratic party.
Trump's victory was due to many factors. A large part of it was Hillary Clinton's campaign and the candidate. Part of it was
the effectiveness of the GOP massive resistance strategy during the Obama years, wherein they pursued a course of obstruction
in an effort to slow the rate of the economic recovery (e.g. as evidence of the bad faith, they are resurrecting a $1 trillion
infrastructure bill that Obama originally proposed in 2012, and now that they have full control, all the talk about "deficits"
goes out the window).
Obama and the Democratic party also bear responsibility for not recognizing the full scope of the financial collapse in 2008-2009,
passing a stimulus package that was about $1 trillion short of spending needed to accelerate the recovery by the 2010 mid-terms,
combined with a weak financial regulation law (which the GOP is going to destroy), an overly complicated health care law -- classic
technocratic, neoliberal incremental policy -- and the failure of the Obama administration to hold Wall Street accountable for
criminal misconduct relating to the financial crisis. Obama's decision to push unpopular trade agreements didn't help either.
As part of the post-mortem, the decision to continuing pushing the TPP may have cost Clinton in the rust belt states that went
for Trump. The agreement was unpopular, and her shift on the policy didn't come across as credible. People noticed as well that
Obama was trying to pass the measure through the lame-duck session of Congress post-election. With Trump's election, the TPP is
done too.
JVRTRL daltonknox67 16 Nov 2016 02:00
There is no iron law that says a country has to run large trade deficits. The existence of large trade deficits is usually
a result of policy choices.
Growth also hasn't gone into the tank. What's changed is the distribution of the gains in GDP growth -- that is in no small
part a direct consequence of changes in policy since the 1970s. It isn't some "market place magic". We have made major changes
to tax laws since that time. We have weakened collective bargaining, which obviously has a negative impact on wages. We have shifted
the economy towards financial services, which has the tendency of increasing inequality.
The idea too that people will be "poorer" than in the 1920s and 1930s is just plain ignorant. It has no basis in any of the
data. Wages in the bottom quartile have actually decreased slightly since the 1970s in real terms, but those wages in the 1970s
were still exponentially higher than wages in the 1920s in real terms.
Wages aren't stagnating because people are working less. Wages have stagnated because of dumb policy choices that have tended
to incentives looting by those at the top of the income distribution from workers in the lower parts of the economy. The 2008
bailouts were a clear illustration of this reality. People in industries rigged rules to benefit themselves. They misallocated
resources. Then they went to representatives and taxpayers and asked for a large no-strings attached handout that was effectively
worth trillions of dollars (e.g. hundreds of billions through TARP, trillions more through other programs). As these players become
wealthier, they have an easier time buying politicians to rig rules further to their advantage.
JVRTRL -> RandomLibertarian 16 Nov 2016 01:44
"The tyranny of the 51 per cent is the oldest and most solid argument against a pure democracy."
"Tyranny of the majority" is always a little bizarre, given that the dynamics of majority rule are unlike the governmental
structures of an actual tyranny. Even in the context of the U.S. we had minority rule due to voting restrictions for well over
a century that was effectively a tyranny for anyone who was denied the ability to participation in the elections process. Pure
majorities can go out of control, especially in a country with massive wealth disparities and with weak civic institutions.
On the other hand, this is part of the reason to construct a system of checks and balances. It's also part of the argument
for representative democracy.
"Neoliberalism" is entirely compatible with "growth of the state". Reagan greatly enlarged the state. He privatized several
functions and it actually had the effect of increasing spending.
When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more
expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would
have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market.
Entirely state controlled health care systems tend to be even more cost-effective. Part of the issue is that privatization
tends to create feedback mechanism that increase the size of spending in programs. Even Eisenhower's noted "military industrial
complex" is an illustration of what happens when privatization really takes hold.
daltonknox67 15 Nov 2016 21:46
After WWII most of the industrialised world had been bombed or fought over with destruction of infrastructure and manufacturing.
The US alone was undamaged. It enjoyed a manufacturing boom that lasted until the 70's when competition from Germany and Japan,
and later Taiwan, Korea and China finally brought it to an end.
As a result Americans born after 1950 will be poorer than the generation born in the 20's and 30's.
This is not a conspiracy or government malfunction. It is a quirk of history. Get over it and try working.
Arma Geddon 15 Nov 2016 21:11
Another nasty neoliberal policy of Reagan and Thatcher, was to close all the mental hospitals, and to sweeten the pill to sell
to the voters, they called it Care in the Community, except by the time those hospitals closed and the people who had to relay
on those institutions, they found out and are still finding out that there is very little care in the community left any more,
thanks to Thatcher's disintegration of the ethos community spirit.
In their neoliberal mantra of thinking, you are on your own now, tough, move on, because you are hopeless and non productive,
hence you are a burden to taxpayers.
Its been that way of thinking for over thirty years, and now the latest group targeted, are the sick and disabled, victims
of the neoliberal made banking crash and its neoliberal inspired austerity, imposed of those least able to fight back or defend
themselves i.e. vulnerable people again!
AlfredHerring GimmeHendrix 15 Nov 2016 20:23
It was in reference to Maggie slapping a copy of Hayek's Constitution of Liberty on the table and saying this is what we believe.
As soon as you introduce the concept of belief you're talking about religion hence completeness while Hayek was writing about
economics which demands consistency. i.e. St. Maggie was just as bad as any Stalinist: economics and religion must be kept separate
or you get a bunch of dead peasants for no reason other than your own vanity.
Ok, religion based on a sky god who made us all is problematic but at least there's always the possibility of supplication
and miracles. Base a religion on economic theory and you're just making sausage of your neighbors kids.
TanTan -> crystaltips2 15 Nov 2016 20:10
If you claim that the only benefit of private enterprise is its taxability, as you did, then why not cut out the middle man
and argue for full state-directed capitalism?
Because it is plainly obvious that private enterprise is not directed toward the public good (and by definition). As we have
both agreed, it needs to have the right regulations and framework to give it some direction in that regard. What "the radical
left" are pointing out is that the idea of private enterprise is now completely out of control, to the point where voters are
disenfranchised because private enterprise has more say over what the government does than the people. Which is clearly a problem.
As for the rest, it's the usual practice of gathering every positive metric available and somehow attributing it to neoliberalism,
no matter how tenuous the threads, and as always with zero rigour. Supposedly capitalism alone doubled life expectancy, supports
billions of extra lives, invented the railways, and provides the drugs and equipment that keep us alive. As though public education,
vaccines, antibiotics, and massive availability of energy has nothing to do with those things.
As for this computer being the invention of capitalism, who knows, but I suppose if one were to believe that everything was
invented and created by capitalism and monetary motives then one might believe that. Energy allotments referred to the limit of
our usage of readily available fossil fuels which you remain blissfully unaware of.
Children have already been educated to agree with you, in no small part due to a fear of the communist regimes at the time,
but at the expense of critical thinking. Questioning the system even when it has plainly been undermined to its core is quickly
labelled "radical" regardless of the normalcy of the query. I don't know what you could possibly think left-wing motives could
be, but your own motives are plain to see when you immediately lump people who care about the planet in with communist idealogues.
If rampant capitalism was going to solve our problems I'm all for it, but it will take a miracle to reverse the damage it has
already done, and only a fool would trust it any further.
YouDidntBuildThat -> Filipio 15 Nov 2016 20:06
Filipo
You argue that a great many government functions have been privatized. I agree. Yet strangely you present zero evidence of
any downsides of that happening. Most of the academic research shows a net benefit, not just on budgets but on employee and customer
satisfaction. See for example.
And despite these privitazation cost savings and alleged neoliberal "austerity" government keeps taking a larger share of our
money, like a malignant cancer. No worries....We're from the government, and we're here to help.
Keypointist 15 Nov 2016 20:04
I think the damage was done when the liberal left co-opted neo-liberalism. What happened under Bill Clinton was the development
of crony capitalism where for example the US banks were told to lower their credit standards to lend to people who couldn't really
afford to service the loans.
It was this that created too big to fail and the financial crisis of 2008. Conservative neo-liberals believe passionately in
competition and hate monopolies. The liberal left removed was was productive about neo-liberalism and replaced it with a kind
of soft state capitalism where big business was protected by the state and the tax payer was called on to bail out these businesses.
THIS more than anything else led to Trump's victory.
"... The word ["neoliberalism"] has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human. ..."
"... Last summer, researchers at the International Monetary Fund settled a long and bitter debate over "neoliberalism": they admitted it exists. Three senior economists at the IMF, an organisation not known for its incaution, published a paper questioning the benefits of neoliberalism ..."
"... The paper gently called out a "neoliberal agenda" for pushing deregulation on economies around the world, for forcing open national markets to trade and capital, and for demanding that governments shrink themselves via austerity or privatisation. The authors cited statistical evidence for the spread of neoliberal policies since 1980, and their correlation with anaemic growth, boom-and-bust cycles and inequality. ..."
"... In the aftermath of the 2008 financial crisis, it was a way of assigning responsibility for the debacle, not to a political party per se, but to an establishment that had conceded its authority to the market. For the Democrats in the US and Labour in the UK, this concession was depicted as a grotesque betrayal of principle. Bill Clinton and Tony Blair, it was said, had abandoned the left's traditional commitments, especially to workers, in favour of a global financial elite and the self-serving policies that enriched them; and in doing so, had enabled a sickening rise in inequality. ..."
"... Peer through the lens of neoliberalism and you see more clearly how the political thinkers most admired by Thatcher and Reagan helped shape the ideal of society as a kind of universal market ..."
"... Of course the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But "neoliberalism" indicates something more than a standard rightwing wish list. It was a way of reordering social reality, and of rethinking our status as individuals. ..."
"... In short, "neoliberalism" is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties. It is a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity. ..."
"... No sooner had neoliberalism been certified as real, and no sooner had it made clear the universal hypocrisy of the market, than the populists and authoritarians came to power ..."
"... Against the forces of global integration, national identity is being reasserted, and in the crudest possible terms. What could the militant parochialism of Brexit Britain and Trumpist America have to do with neoliberal rationality? ..."
"... It isn't only that the free market produces a tiny cadre of winners and an enormous army of losers – and the losers, looking for revenge, have turned to Brexit and Trump. There was, from the beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian present in which we find ourselves; ..."
"... That Hayek is considered the grandfather of neoliberalism – a style of thought that reduces everything to economics – is a little ironic given that he was such a mediocre economist. ..."
"... This last is what makes neoliberalism "neo". It is a crucial modification of the older belief in a free market and a minimal state, known as "classical liberalism". In classical liberalism, merchants simply asked the state to "leave us alone" – to laissez-nous faire. Neoliberalism recognised that the state must be active in the organisation of a market economy. The conditions allowing for a free market must be won politically, and the state must be re-engineered to support the free market on an ongoing basis. ..."
"... Hayek had only his idea to console him; an idea so grand it would one day dissolve the ground beneath the feet of Keynes and every other intellectual. Left to its own devices, the price system functions as a kind of mind. And not just any mind, but an omniscient one: the market computes what individuals cannot grasp. Reaching out to him as an intellectual comrade-in-arms, the American journalist Walter Lippmann wrote to Hayek, saying: "No human mind has ever understood the whole scheme of a society At best a mind can understand its own version of the scheme, something much thinner, which bears to reality some such relation as a silhouette to a man." ..."
"... The only social end is the maintenance of the market itself. In its omniscience, the market constitutes the only legitimate form of knowledge, next to which all other modes of reflection are partial, in both senses of the word: they comprehend only a fragment of a whole and they plead on behalf of a special interest. Individually, our values are personal ones, or mere opinions; collectively, the market converts them into prices, or objective facts. ..."
"... According to the logic of Hayek's Big Idea, these expressions of human subjectivity are meaningless without ratification by the market ..."
"... ociety reconceived as a giant market leads to a public life lost to bickering over mere opinions; until the public turns, finally, in frustration to a strongman as a last resort for solving its otherwise intractable problems. ..."
"... What began as a new form of intellectual authority, rooted in a devoutly apolitical worldview, nudged easily into an ultra-reactionary politics ..."
The word ["neoliberalism"] has become a rhetorical weapon, but it properly names the reigning ideology of
our era – one that venerates the logic of the market and strips away the things that make us human.
Last summer, researchers at the International Monetary Fund settled a long and bitter debate over
"neoliberalism": they admitted it exists. Three senior economists at the IMF, an organisation not
known for its incaution, published
a paper questioning
the benefits of neoliberalism. In so doing, they helped put to rest the idea that the word is
nothing more than a political slur, or a term without any analytic power. The paper gently called
out a "neoliberal agenda" for pushing deregulation on economies around the world, for forcing open
national markets to trade and capital, and for demanding that governments shrink themselves via austerity
or privatisation. The authors cited statistical evidence for the spread of neoliberal policies since
1980, and their correlation with anaemic growth, boom-and-bust cycles and inequality.
Neoliberalism is an old term, dating back to the 1930s, but it has been revived as a way of describing
our current politics – or more precisely,
the range of thought allowed by our politics . In the aftermath of the 2008 financial crisis,
it was a way of assigning responsibility for the debacle, not to a political party per se, but to
an establishment that had conceded its authority to the market. For the Democrats in the US and Labour
in the UK, this concession was depicted as a grotesque betrayal of principle. Bill Clinton and Tony
Blair, it was said, had abandoned the left's traditional commitments, especially to workers, in favour
of a global financial elite and the self-serving policies that enriched them; and in doing so, had
enabled a sickening rise in inequality.
Neoliberalism: the idea that swallowed the world – podcast
Over the past few years, as debates have turned uglier, the word has become a rhetorical weapon,
a way for anyone left of centre to incriminate those even an inch to their right. (No wonder centrists
say it's a meaningless insult: they're the ones most meaningfully insulted by it.) But "neoliberalism"
is more than a gratifyingly righteous jibe. It is also, in its way, a pair of eyeglasses.
Peer through the lens of neoliberalism and you see more clearly how the political thinkers most
admired by Thatcher and Reagan helped shape the ideal of society as a kind of universal market
(and
not, for example, a polis, a civil sphere or a kind of family) and of human beings as profit-and-loss
calculators (and not bearers of grace, or of inalienable rights and duties). Of course the goal
was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes
and deregulate. But "neoliberalism" indicates something more than a standard rightwing wish list.
It was a way of reordering social reality, and of rethinking our status as individuals.
Still peering through the lens, you see how, no less than the welfare state, the free market
is a human invention. You see how pervasively we are now urged to think of ourselves as proprietors
of our own talents and initiative, how glibly we are told to compete and adapt. You see the extent
to which a language formerly confined to chalkboard simplifications describing commodity markets
(competition, perfect information, rational behaviour) has been applied to all of society, until
it has invaded the grit of our personal lives, and how the attitude of the salesman has become enmeshed
in all modes of self-expression.
In short, "neoliberalism" is not simply a name for pro-market policies, or for the compromises
with finance capitalism made by failing social democratic parties. It is a name for a premise that,
quietly, has come to regulate all we practise and believe: that competition is the only legitimate
organising principle for human activity.
No sooner had neoliberalism been certified as real, and no sooner had it made clear the universal
hypocrisy of the market, than the populists and authoritarians came to power. In the US, Hillary
Clinton, the neoliberal arch-villain, lost – and to a man who knew just enough
to pretend he hated free trade . So are the eyeglasses now useless? Can they do anything to help
us understand what is broken about British and American politics? Against the forces of global
integration, national identity is being reasserted, and in the crudest possible terms. What could
the militant parochialism of Brexit Britain and Trumpist America have to do with neoliberal rationality?
What possible connection is there between the president – a freewheeling boob – and the bloodless
paragon of efficiency known as the free market?
It isn't only that the free market produces a tiny cadre of winners and an enormous army of
losers – and the losers, looking for revenge, have turned to Brexit and Trump. There was, from the
beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian
present in which we find ourselves; between the market as unique discloser of value and guardian
of liberty, and our current descent into post-truth and illiberalism.
Moving the stale debate about neoliberalism forward begins, I think, with taking seriously the
measure of its cumulative effect on all of us, regardless of affiliation. And this requires returning
to its origins, which have nothing to do with Bill or Hillary Clinton. There once was a group of
people who did call themselves neoliberals, and did so proudly, and their ambition was a total revolution
in thought. The most prominent among them, Friedrich Hayek, did not think he was staking out a position
on the political spectrum, or making excuses for the fatuous rich, or tinkering along the edges of
microeconomics.
He thought he was solving the problem of modernity: the problem of objective knowledge. For Hayek,
the market didn't just facilitate trade in goods and services; it revealed truth. How did his ambition
collapse into its opposite – the mind-bending possibility that, thanks to our thoughtless veneration
of the free market, truth might be driven from public life altogether?
When the idea occurred to Friedrich Hayek in 1936, he knew, with the conviction of a "sudden illumination",
that he had struck upon something new. "How can the combination of fragments of knowledge existing
in different minds," he wrote, "bring about results which, if they were to be brought about deliberately,
would require a knowledge on the part of the directing mind which no single person can possess?"
This was not a technical point about interest rates or deflationary slumps. This was not a reactionary
polemic against collectivism or the welfare state. This was a way of birthing a new world. To his
mounting excitement, Hayek understood that the market could be thought of as a kind of mind.
Adam Smith's "invisible hand" had already given us the modern conception of the market: as an
autonomous sphere of human activity and therefore, potentially, a valid object of scientific knowledge.
But Smith was, until the end of his life, an 18th-century moralist. He thought the market could be
justified only in light of individual virtue, and he was anxious that a society governed by nothing
but transactional self-interest was no society at all. Neoliberalism is Adam Smith without the anxiety.
That Hayek is considered the grandfather of neoliberalism – a style of thought that reduces
everything to economics – is a little ironic given that he was such a mediocre economist. He
was just a young, obscure Viennese technocrat when he was recruited to the London School of
Economics to compete
with, or possibly even dim, the rising star of John Maynard Keynes at Cambridge.
The plan backfired, and Hayek lost out to Keynes in a rout. Keynes's General Theory of Employment,
Interest and Money, published in 1936, was greeted as a masterpiece. It dominated the public discussion,
especially among young English economists in training, for whom the brilliant, dashing, socially
connected Keynes was a beau idéal . By the end of the second world war, many prominent free-marketers
had come around to Keynes's way of thinking, conceding that government might play a role in managing
a modern economy. The initial excitement over Hayek had dissipated. His peculiar notion that doing
nothing could cure an economic depression had been discredited in theory and practice. He later admitted
that he wished his work criticising Keynes would simply be forgotten.
... Hayek built into neoliberalism the assumption that the market provides all necessary protection
against the one real political danger: totalitarianism. To prevent this, the state need only keep
the market free.
This last is what makes neoliberalism "neo". It is a crucial modification of the older belief
in a free market and a minimal state, known as "classical liberalism". In classical liberalism, merchants
simply asked the state to "leave us alone" – to laissez-nous faire. Neoliberalism recognised that
the state must be active in the organisation of a market economy. The conditions allowing for a free
market must be won politically, and the state must be re-engineered to support the free market on
an ongoing basis.
That isn't all: every aspect of democratic politics, from the choices of voters to the decisions
of politicians, must be submitted to a purely economic analysis. The lawmaker is obliged to leave
well enough alone – to not distort the natural actions of the marketplace – and so, ideally, the
state provides a fixed, neutral, universal legal framework within which market forces operate spontaneously.
The conscious direction of government is never preferable to the "automatic mechanism of adjustment"
– ie the price system, which is not only efficient but maximises liberty, or the opportunity for
men and women to make free choices about their own lives.
As Keynes jetted between London and Washington, creating the postwar order, Hayek sat pouting
in Cambridge. He had been sent there during the wartime evacuations; and he complained that he was
surrounded by "foreigners" and "no lack of orientals of all kinds" and "Europeans of practically
all nationalities, but very few of real intelligence".
Stuck in England, without influence or respect, Hayek had only his idea to console him; an
idea so grand it would one day dissolve the ground beneath the feet of Keynes and every other intellectual.
Left to its own devices, the price system functions as a kind of mind. And not just any mind, but
an omniscient one: the market computes what individuals cannot grasp. Reaching out to him as an intellectual
comrade-in-arms, the American journalist Walter Lippmann wrote to Hayek, saying: "No human mind has
ever understood the whole scheme of a society At best a mind can understand its own version of
the scheme, something much thinner, which bears to reality some such relation as a silhouette to
a man."
It is a grand epistemological claim – that the market is a way of knowing, one that radically
exceeds the capacity of any individual mind. Such a market is less a human contrivance, to be manipulated
like any other, than a force to be studied and placated. Economics ceases to be a technique – as
Keynes believed it to be – for achieving desirable social ends, such as growth or stable money.
The only social end is the maintenance of the market itself. In its omniscience, the market constitutes
the only legitimate form of knowledge, next to which all other modes of reflection are partial, in
both senses of the word: they comprehend only a fragment of a whole and they plead on behalf of a
special interest. Individually, our values are personal ones, or mere opinions; collectively, the
market converts them into prices, or objective facts.
... ... ...
The more Hayek's idea expands, the more reactionary it gets, the more it hides behind its pretence
of scientific neutrality – and the more it allows economics to link up with the major intellectual
trend of the west since the 17th century. The rise of modern science generated a problem: if the
world is universally obedient to natural laws, what does it mean to be human? Is a human being simply
an object in the world, like any other? There appears to be no way to assimilate the subjective,
interior human experience into nature as science conceives it – as something objective whose rules
we discover by observation.
... ... ...
More than anyone, even Hayek himself, it was the great postwar Chicago economist Milton Friedman
who helped convert governments and politicians to the power of Hayek's Big Idea. But first he broke
with two centuries of precedent and declared that economics is "in principle independent of any particular
ethical position or normative judgments" and is "an 'objective' science, in precisely the same sense
as any of the physical sciences". Values of the old, mental, normative kind were defective, they
were "differences about which men can ultimately only fight". There is the market, in other words,
and there is relativism.
Markets may be human facsimiles of natural systems, and like the universe itself, they may be
authorless and valueless. But the application of Hayek's Big Idea to every aspect of our lives negates
what is most distinctive about us. That is, it assigns what is most human about human beings – our
minds and our volition – to algorithms and markets, leaving us to mimic, zombie-like, the shrunken
idealisations of economic models. Supersizing Hayek's idea and radically upgrading the price system
into a kind of social omniscience means radically downgrading the importance of our individual capacity
to reason – our ability to provide and evaluate justifications for our actions and beliefs.
As a result, the public sphere – the space where we offer up reasons, and contest the reasons
of others – ceases to be a space for deliberation, and becomes a market in clicks, likes and retweets.
The internet is personal preference magnified by algorithm; a pseudo-public space that echoes the
voice already inside our head. Rather than a space of debate in which we make our way, as a society,
toward consensus, now there is a mutual-affirmation apparatus banally referred to as a "marketplace
of ideas". What looks like something public and lucid is only an extension of our own pre-existing
opinions, prejudices and beliefs, while the authority of institutions and experts has been displaced
by the aggregative logic of big data. When we access the world through a search engine, its results
are ranked, as the founder of Google puts it, "recursively" – by an infinity of individual users
functioning as a market, continuously and in real time.
... ... ...
According to the logic of Hayek's Big Idea, these expressions of human subjectivity are meaningless
without ratification by the market – as Friedman said, they are nothing but relativism, each
as good as any other. When the only objective truth is determined by the market, all other values
have the status of mere opinions; everything else is relativist hot air. But Friedman's "relativism"
is a charge that can be thrown at any claim based on human reason. It is a nonsense insult, as all
humanistic pursuits are "relative" in a way the sciences are not. They are relative to the (private)
condition of having a mind, and the (public) need to reason and understand even when we can't expect
scientific proof. When our debates are no longer resolved by deliberation over reasons, then the
whimsies of power will determine the outcome.
This is where the triumph of neoliberalism meets the political nightmare we are living through
now. "You had one job," the old joke goes, and Hayek's grand project, as originally conceived in
30s and 40s, was explicitly designed to prevent a backslide into political chaos and fascism. But
the Big Idea was always this abomination waiting to happen. It was, from the beginning, pregnant
with the thing it was said to protect against. Society reconceived as a giant market leads to
a public life lost to bickering over mere opinions; until the public turns, finally, in frustration
to a strongman as a last resort for solving its otherwise intractable problems.
... ... ...
What began as a new form of intellectual authority, rooted in a devoutly apolitical worldview,
nudged easily into an ultra-reactionary politics. What can't be quantified must not be real,
says the economist, and how do you measure the benefits of the core faiths of the enlightenment –
namely, critical reasoning, personal autonomy and democratic self-government? When we abandoned,
for its embarrassing residue of subjectivity, reason as a form of truth, and made science the sole
arbiter of both the real and the true, we created a void that pseudo-science was happy to fill.
"... Language is important, but it can be slippery. Consider that the phrase, the American Dream, has changed radically through the years. Mr. Trump and Ben Carson, the secretary of housing and urban development, have suggested it involves owning a beautiful home and a roaring business, but it wasn't always so. Instead, in the 1930s, it meant freedom, mutual respect and equality of opportunity. It had more to do with morality than material success. ..."
"... This drift in meaning is significant... ..."
"... Survival and security are the bottom 2 levels on Maslow's pyramid. If that's at the top of the wish list it doesn't speak well of the environment where the list is made. I would say most people are aiming for levels 3-5, taking 1-2 for "granted" - but while level 1 (survival) is pretty much assured unless you get sick or are shot by a cop, level 2 is increasingly brittle. ..."
"... In different US locations, I heard my share of "living the dream" in response to "how are you" from retail clerks - which is obviously ironic and shows that people are well aware of it just being a narrative. It also reminds me of a quip in a Dilbert cartoon many years ago - "you only have the right to pursue happiness, not to actually achieve it". ..."
"... And what George Carlin had to say on the topic. ..."
They are ringing words, but what do they mean? Language is important, but it can be
slippery. Consider that the phrase, the American Dream, has changed radically through the
years. Mr. Trump and Ben Carson, the secretary of housing and urban development, have suggested it
involves owning a beautiful home and a roaring business, but it wasn't always so. Instead, in
the 1930s, it meant freedom, mutual respect and equality of opportunity. It had more to do with
morality than material success.
Northrop Grumman lays off 51 state workers under contract with VITA
By MICHAEL MARTZ Richmond Times-Dispatch
Jun 16, 2015
... While Northrop Grumman made the decision on the layoffs, VITA informed the affected workers because
they are state employees and placed them on leave through June 30. The state Department of Human
Resources Management assisted the technology agency with the layoffs through its shared services
center.
Affected employees will be offered state severance packages based on years of service, early retirement
options, and "access to outplacement services."...
What you describe in the first sentence is only one of many interpretations. But the (al)lure
of the meme is that the interpretation is open-ended (one could also say "not well defined"; but
isn't that what freedom is about - that the outcome and the way of achieving it are not rigidly
prescribed?).
Survival and security are the bottom 2 levels on Maslow's pyramid. If that's at the top of
the wish list it doesn't speak well of the environment where the list is made. I would say most
people are aiming for levels 3-5, taking 1-2 for "granted" - but while level 1 (survival) is pretty
much assured unless you get sick or are shot by a cop, level 2 is increasingly brittle.
The environment in a Detroit tenement grows a shorter Maslow's pyramid than Santa Clara Valley
suburbs. Central VA is somewhere in between where the highest aspiration of the vast majority
of people is to belong and have the esteem of others. Self-actualization and transcendence are
not even things here save for a rare few strangers in a strange land.
Well, all these terms are subject to interpretation and exist in degrees. Obviously survival is
a strong prerequisite for the higher levels, but one can partially achieve higher levels without
having achieved lower levels fully. At least for a while; or having achieved a lower level may
be illusory (this was my actual point).
I would dispute that "almost everybody" cannot achieve esteem/self-actualization - at least
for a while. How strong/persistent need the achievement be to count?
Then there is even the fundamental issue of knowing whether a level has really been "permanently"
secured. E.g. safety - which can usually only be judged by demonstration of its absence.
No he actually doesn't. It is just a BS phrase/meme, similar to "hard work". It is just signaling that one cares for/appreciates general virtues and the audience's desire
for recognition and happiness. In the case of "hard work", perhaps also with the aspect of pushing
role model narratives.
In different US locations, I heard my share of "living the dream" in response to "how are you"
from retail clerks - which is obviously ironic and shows that people are well aware of it just
being a narrative.
It also reminds me of a quip in a Dilbert cartoon many years ago - "you only have the right
to pursue happiness, not to actually achieve it".
"... Consumerism fills the social void. But far from curing the disease of isolation, it intensifies social comparison to the point at which, having consumed all else, we start to prey upon ourselves. Social media brings us together and drives us apart, allowing us precisely to quantify our social standing, and to see that other people have more friends and followers than we do. ..."
"... A recent survey in England suggests that one in four women between 16 and 24 have harmed themselves, and one in eight now suffer from post-traumatic stress disorder. Anxiety, depression, phobias or obsessive compulsive disorder affect 26% of women in this age group. This is what a public health crisis looks like. ..."
"... Opioids relieve both physical agony and the distress of separation. Perhaps this explains the link between social isolation and drug addiction. ..."
"... Children who experience emotional neglect, according to some findings, suffer worse mental health consequences than children suffering both emotional neglect and physical abuse: hideous as it is, violence involves attention and contact. Self-harm is often used as an attempt to alleviate distress: another indication that physical pain is not as bad as emotional pain. As the prison system knows only too well, one of the most effective forms of torture is solitary confinement. ..."
"... It's unsurprising that social isolation is strongly associated with depression, suicide, anxiety, insomnia, fear and the perception of threat. It's more surprising to discover the range of physical illnesses it causes or exacerbates. Dementia, high blood pressure, heart disease, strokes, lowered resistance to viruses, even accidents are more common among chronically lonely people. Loneliness has a comparable impact on physical health to smoking 15 cigarettes a day: it appears to raise the risk of early death by 26%. This is partly because it enhances production of the stress hormone cortisol, which suppresses the immune system. ..."
"... Neoliberalism is a project that explicitly aims, and has achieved, the undermining and elimination of social networks in favour of market competition ..."
"... In practice, loosening social and legal institutions has reduced social security (in the general sense rather than simply welfare payments) and encouraged the limitation of social interaction to money based activity ..."
"... All powerful institutions have a vested interest in keeping us atomized and individualistic. The gangs at the top don't want competition. They're afraid of us. In particular, they're afraid of men organising into gangs. That's where this very paper comes in ..."
"... The alienation genie was out of the bottle with the beginning of the Industrial Revolution and mass migration to cities began and we abandoned living in village communities ..."
"... Neoliberalism expressly encourages 'atomisation'- it is all about reducing human interaction to markets. And so this is just one of the reasons that neoliberalism is such a bunk philosophy. ..."
"... My stab at an answer would first question the notion that we are engaging in anything. That presupposes we are making the choices. Those who set out the options are the ones that make the choices. We are being engaged by the grotesquely privileged and the pathologically greedy in an enterprise that profits them still further. It suits the 1% very well strategically, for obvious reasons, that the 99% don't swap too many ideas with each other. ..."
"... According to Robert Putnam, as societies become more ethnically diverse they lose social capital, contributing to the type of isolation and loneliness which George describes. Doesn't sound as evil as neoliberalism I suppose. ..."
"... multiculturalism is a direct result of Neoliberalism. The market rules and people are secondary. Everything must be done for business owners, and that everything means access to cheap labor. ..."
"... I'd have thought what he really wants to say is that loneliness as a phenomenon in modern Western society arises out of an intent on the part of our political and social elites to divide us all into competing against one another, as individuals and as members of groups, all the better to keep us under control and prevent us from working together to claim our fair share of resources. ..."
"... Has it occurred to you that the collapse in societal values has allowed 'neo-liberalism' to take hold? ..."
"... No. It has been the concentrated propaganda of the "free" press. Rupert Murdoch in particular, but many other well-funded organisations working in the background over 50 years. They are winning. ..."
"... We're fixated on a magical, abstract concept called "the economy". Everything must be done to help "the economy", even if this means adults working through their weekends, neglecting their children, neglecting their elderly parents, eating at their desks, getting diabetes, breaking down from stress, and giving up on a family life. ..."
"... You can make a reasonable case that 'Neoliberalism' expects that every interaction, including between individuals, can be reduced to a financial one. ..."
"... As can be seen from many of the posts, neo-liberalism depends on, and fosters, ignorance, an inability to see things from historical and different perspectives and social and intellectual disciplines. On a sociological level how other societies are arranged throws up interesting comparisons. Scandanavian countries, which have mostly avoided neo-liberalism by and large, are happier, healthier places to live. America and eastern countries arranged around neo-liberal, market driven individualism, are unhappy places, riven with mental and physical health problems and many more social problems of violence, crime and suicide. ..."
"... The people who fosted this this system onto us, are now either very old or dead. We're living in the shadow of their revolutionary transformation of our more equitable post-war society. Hayek, Friedman, Keith Joseph, Thatcher, Greenspan and tangentially but very influentially Ayn Rand. Although a remainder (I love the wit of the term 'Remoaner') , Brexit can be better understood in the context of the death-knell of neoliberalism. ..."
"... Criticism of his hypotheses on this thread (where articualted at all) focus on the existence of solitude and loneliness prior to neo liberalism, which seems to me to be to deliberately miss his point: this was formerly a minor phenomenon, yet is now writ on an incredible scale - and it is a social phenomenon particular to those western economies whose elites have most enthusiastically embraced neo liberalism. ..."
"... We all want is to: (and feel we have the right to) wear the best clothes, have the foreign holidays, own the latest tech and eat the finest foods. At the same time our rights have increased and awareness of our responsibilities have minimized. The execution of common sense and an awareness that everything that goes wrong will always be someone else fault. ..."
"... We are not all special snowflakes, princesses or worthy of special treatment, but we act like self absorbed, entitled individuals. Whether that's entitled to benefits, the front of the queue or bumped into first because its our birthday! ..."
"... Unhealthy social interaction, yes. You can never judge what is natural to humans based on contemporary Britain. Anthropologists repeatedly find that what we think natural is merely a social construct created by the system we are subject to. ..."
"... We are becoming fearful of each other and I believe the insecurity we feel plays a part in this. ..."
"... We have become so disconnected from ourselves and focused on battling to stay afloat. Having experienced periods of severe stress due to lack of money I couldn't even begin to think about how I felt, how happy I was, what I really wanted to do with my life. I just had to pay my landlord, pay the bills and try and put some food on my table so everything else was totally neglected. ..."
"... We need a radical change of political thinking to focus on quality of life rather than obsession with the size of our economy. High levels of immigration of people who don't really integrate into their local communities has fractured our country along with the widening gap between rich and poor. Governments only see people in terms of their "economic value" - hence mothers being driven out to work, children driven into daycare and the elderly driven into care homes. Britain is becoming a soulless place - even our great British comedy is on the decline. ..."
"... Quality of life is far more important than GDP I agree but it is also far more important than inequality. ..."
"... Thatcher was only responsible for "letting it go" in Britain in 1980, but actually it was already racing ahead around the world. ..."
"... Eric Fromm made similar arguments to Monbiot about the psychological impact of modern capitalism (Fear of Freedom and The Sane Society) - although the Freudian element is a tad outdated. However, for all the faults of modern society, I'd rather be unhappy now than in say, Victorian England. Similarly, life in the West is preferable to the obvious alternatives. ..."
"... Whilst it's very important to understand how neoliberalism, the ideology that dare not speak it's name, derailed the general progress in the developed world. It's also necessary to understand that the roots this problem go much further back. Not merely to the start of the industrial revolution, but way beyond that. It actually began with the first civilizations when our societies were taken over by powerful rulers, and they essentially started to farm the people they ruled like cattle. On the one hand they declared themselves protector of their people, whilst ruthlessly exploiting them for their own political gain. I use the livestock farming analogy, because that explains what is going on. ..."
"... Neo-liberalism allows psychopaths to flourish, and it has been argued by Robert Hare that they are disproportionately represented in the highest echelons of society. So people who lack empathy and emotional attachment are probably weilding a significant amount of influence over the way our economy and society is organised. Is it any wonder that they advocate an economic model which is most conducive to their success? Things like job security, rigged markets, unions, and higher taxes on the rich simply get in their way. ..."
"... . Data suggests that inequality has widened massively over the last 30 years ( https://www.equalitytrust.org.uk/infographic-income-inequality-uk ) - as has social mobility ( https://www.theguardian.com/news/datablog/2012/may/22/social-mobility-data-charts ). Homelessness has risen substantially since 1979. ..."
"... As a director and CEO of an organisation employing several hundred people I became aware that 40% of the staff lived alone and that the workplace was important to them not only for work but also for interacting with their colleagues socially . ..."
"... A thoughtful article. But the rich and powerful will ignore it; their doing very well out of neo liberalism thank you. Meanwhile many of those whose lives are affected by it don't want to know - they're happy with their bigger TV screen. Which of course is what the neoliberals want, 'keep the people happy and in the dark'. An old Roman tactic - when things weren't going too well for citizens and they were grumbling the leaders just extended the 'games'. Evidently it did the trick ..."
"... Sounds like the inevitable logical outcome of a society where the predator sociopathic and their scared prey are all that is allowed. This dynamic dualistic tautology, the slavish terrorised to sleep and bullying narcissistic individual, will always join together to protect their sick worldview by pathologising anything that will threaten their hegemony of power abuse: compassion, sensitivity, moral conscience, altruism and the immediate effects of the ruthless social effacement or punishment of the same ie human suffering. ..."
"... "Alienation, in all areas, has reached unprecedented heights; the social machinery for deluding consciousnesses in the interest of the ruling class has been perfected as never before. The media are loaded with upscale advertising identifying sophistication with speciousness. Television, in constant use, obliterates the concept under the image and permanently feeds a baseless credulity for events and history. Against the will of many students, school doesn't develop the highly cultivated critical capacities that a real sovereignty of the people would require. And so on. ..."
"... There's no question - neoliberalism has been wrenching society apart. It's not as if the prime movers of this ideology were unaware of the likely outcome viz. "there is no such thing as society" (Thatcher). Actually in retrospect the whole zeitgeist from the late 70s emphasised the atomised individual separated from the whole. Dawkins' "The Selfish Gene" (1976) may have been influential in creating that climate. ..."
"... I would add that the basic concepts of the Neoliberal New world order are fundamentally Evil, from the control of world population through supporting of strife starvation and war to financial inducements of persons in positions of power. Let us not forget the training of our younger members of our society who have been induced to a slavish love of technology. ..."
"... The kind of personal freedom that you say goes hand in hand with capitalism is an illusion for the majority of people. It holds up the prospect of that kind of freedom, but only a minority get access to it. ..."
"... Problems in society are not solved by having a one hour a week class on "self esteem". In fact self-esteem and self-worth comes from the things you do. ..."
"... Neoliberalism is the bastard child of globalization which in effect is Americanization. The basic premise is the individual is totally reliant on the corporate world state aided by a process of fear inducing mechanisms, pharmacology is one of the tools. No community no creativity no free thinking. Poded sealed and cling filmed a quasi existence. ..."
"... Having grown up during the Thatcher years, I entirely agree that neoliberalism has divided society by promoting individual self-optimisation at the expensive of everyone else. ..."
"... There is no such thing as a free-market society. Your society of 'self-interest' is really a state supported oligarchy. If you really want to live in a society where there is literally no state and a more or less open market try Somalia or a Latin American city run by drug lords - but even then there are hierarchies, state involvement, militias. ..."
"... Furthermore, a society in which people are encouraged to be narrowly selfish is just plain uncivilized. Since when have sociopathy and barbarism been something to aspire to? ..."
"... Why don't we explore some of the benefits?.. Following the long list of some the diseases, loneliness can inflict on individuals, there must be a surge in demand for all sort of medications; anti-depressants must be topping the list. There is a host many other anti-stress treatments available of which Big Pharma must be carving the lion's share. Examine the micro-economic impact immediately following a split or divorce. There is an instant doubling on the demand for accommodation, instant doubling on the demand for electrical and household items among many other products and services. But the icing on the cake and what is really most critical for Neoliberalism must be this: With the morale barometer hitting the bottom, people will be less likely to think of a better future, and therefore, less likely to protest. In fact, there is nothing left worth protecting. ..."
"... Your freedom has been curtailed. Your rights are evaporating in front of your eyes. And Best of all, from the authorities' perspective, there is no relationship to defend and there is no family to protect. If you have a job, you want to keep, you must prove your worthiness every day to 'a company'. ..."
What greater indictment of a system could there be than an epidemic of mental
illness? Yet plagues of anxiety, stress, depression, social phobia, eating disorders,
self-harm and loneliness now strike people down all over the world. The latest,
catastrophic figures for children's mental health in England reflect a global
crisis.
There are plenty of secondary reasons for this distress, but it seems to
me that the underlying cause is everywhere the same: human beings, the ultrasocial
mammals, whose brains are wired to respond to other people, are being peeled
apart. Economic and technological change play a major role, but so does ideology.
Though our wellbeing is inextricably linked to the lives of others, everywhere
we are told that we will prosper through competitive self-interest and extreme
individualism.
In Britain, men who have spent their entire lives in quadrangles – at school,
at college, at the bar, in parliament – instruct us to stand on our own two
feet. The education system becomes more brutally competitive by the year. Employment
is a fight to the near-death with a multitude of other desperate people chasing
ever fewer jobs. The modern overseers of the poor ascribe individual blame to
economic circumstance. Endless competitions on television feed impossible aspirations
as real opportunities contract.
Consumerism fills the social void. But far from curing the disease of
isolation, it intensifies social comparison to the point at which, having consumed
all else, we start to prey upon ourselves. Social media brings us together and
drives us apart, allowing us precisely to quantify our social standing, and
to see that other people have more friends and followers than we do.
As Rhiannon Lucy Cosslett has brilliantly documented, girls and young women
routinely alter the photos they post to make themselves look smoother and slimmer.
Some phones, using their "beauty" settings, do it for you without asking; now
you can become your own thinspiration. Welcome to the post-Hobbesian dystopia:
a war of everyone against themselves.
Social media brings us together and drives us apart, allowing us precisely
to quantify our social standing
Is it any wonder, in these lonely inner worlds, in which touching has been
replaced by retouching, that young women are drowning in mental distress?
A recent survey in England suggests that one in four women between 16 and
24 have harmed themselves, and one in eight now suffer from post-traumatic stress
disorder. Anxiety, depression, phobias or obsessive compulsive disorder affect
26% of women in this age group. This is what a public health crisis looks like.
If social rupture is not treated as seriously as broken limbs, it is because
we cannot see it. But neuroscientists can. A series of fascinating papers suggest
that social pain and physical pain are processed by the same neural circuits.
This might explain why, in many languages, it is hard to describe the impact
of breaking social bonds without the words we use to denote physical pain and
injury. In both humans and other social mammals, social contact reduces physical
pain. This is why we hug our children when they hurt themselves: affection is
a powerful analgesic. Opioids relieve both physical agony and the distress
of separation. Perhaps this explains the link between social isolation and drug
addiction.
Experiments summarised in the journal Physiology & Behaviour last month suggest
that, given a choice of physical pain or isolation, social mammals will choose
the former. Capuchin monkeys starved of both food and contact for 22 hours will
rejoin their companions before eating. Children who experience emotional
neglect, according to some findings, suffer worse mental health consequences
than children suffering both emotional neglect and physical abuse: hideous as
it is, violence involves attention and contact. Self-harm is often used as an
attempt to alleviate distress: another indication that physical pain is not
as bad as emotional pain. As the prison system knows only too well, one of the
most effective forms of torture is solitary confinement.
It is not hard to see what the evolutionary reasons for social pain might
be. Survival among social mammals is greatly enhanced when they are strongly
bonded with the rest of the pack. It is the isolated and marginalised animals
that are most likely to be picked off by predators, or to starve. Just as physical
pain protects us from physical injury, emotional pain protects us from social
injury. It drives us to reconnect. But many people find this almost impossible.
It's unsurprising that social isolation is strongly associated with depression,
suicide, anxiety, insomnia, fear and the perception of threat. It's more surprising
to discover the range of physical illnesses it causes or exacerbates. Dementia,
high blood pressure, heart disease, strokes, lowered resistance to viruses,
even accidents are more common among chronically lonely people. Loneliness has
a comparable impact on physical health to smoking 15 cigarettes a day: it appears
to raise the risk of early death by 26%. This is partly because it enhances
production of the stress hormone cortisol, which suppresses the immune system.
Studies in both animals and humans suggest a reason for comfort eating: isolation
reduces impulse control, leading to obesity. As those at the bottom of the socioeconomic
ladder are the most likely to suffer from loneliness, might this provide one
of the explanations for the strong link between low economic status and obesity?
Anyone can see that something far more important than most of the issues
we fret about has gone wrong. So why are we engaging in this world-eating, self-consuming
frenzy of environmental destruction and social dislocation, if all it produces
is unbearable pain? Should this question not burn the lips of everyone in public
life?
There are some wonderful charities doing what they can to fight this tide,
some of which I am going to be working with as part of my loneliness project.
But for every person they reach, several others are swept past.
This does not require a policy response. It requires something much bigger:
the reappraisal of an entire worldview. Of all the fantasies human beings entertain,
the idea that we can go it alone is the most absurd and perhaps the most dangerous.
We stand together or we fall apart.
Well its a bit of a stretch blaming neoliberalism for creating loneliness.
Yet it seems to be the fashion today to imagine that the world we live in
is new...only created just years ago. And all the suffering that we see
now never existed before. Plagues of anxiety, stress, depression, social
phobia, eating disorders, self-harm and loneliness never happened in
the past, because everything was bright and shiny and world was good.
Regrettably history teaches us that suffering and deprivation have dogged
mankind for centuries, if not tens of thousands of years. That's what we
do; survive, persist...endure. Blaming 'neoliberalism' is a bit of cop-out.
It's the human condition man, just deal with it.
Some of the connections here are a bit tenuous, to say the least, including
the link to political ideology. Economic liberalism is usually accompanied
with social conservatism, and vice versa. Right wing ideologues are more
likely to emphasize the values of marriage and family stability, while left
wing ones are more likely to favor extremes of personal freedom and reject
those traditional structures that used to bind us together.
You're a little confused there in your connections between policies, intentions
and outcomes. Nevertheless, Neoliberalism is a project that explicitly
aims, and has achieved, the undermining and elimination of social networks
in favour of market competition.
In practice, loosening social and legal institutions has reduced
social security (in the general sense rather than simply welfare payments)
and encouraged the limitation of social interaction to money based activity.
That holds true when you're talking about demographics/voters.
Economic and social liberalism go hand in hand in the West. No matter
who's in power, the establishment pushes both but will do one or the other
covertly.
All powerful institutions have a vested interest in keeping us atomized
and individualistic. The gangs at the top don't want competition. They're
afraid of us. In particular, they're afraid of men organising into gangs.
That's where this very paper comes in.
The alienation genie was out of the bottle with the beginning of the
Industrial Revolution and mass migration to cities began and we abandoned
living in village communities. Over the ensuing approx 250 years we
abandoned geographically close relationships with extended families, especially
post WW2. Underlying economic structures both capitalist and marxist dissolved
relationships that we as communal primates evolved within. Then accelerate
this mess with (anti-) social media the last 20 years along with economic
instability and now dissolution of even the nuclear family (which couldn't
work in the first place, we never evolved to live with just two parents
looking after children) and here we have it: Mass mental illness. Solution?
None. Just form the best type of extended community both within and outside
of family, be engaged and generours with your community hope for the best.
Indeed, Industrialisation of our pre-prescribed lifestyle is a huge factor.
In particular, our food, it's low quality, it's 24 hour avaliability, it's
cardboard box ambivalence, has caused a myriad of health problems. Industrialisation
is about profit for those that own the 'production-line' & much less about
the needs of the recipient.
It's unsurprising that social isolation is strongly associated
with depression, suicide, anxiety, insomnia, fear and the perception
of threat.
Yes, although there is some question of which order things go in. A supportive
social network is clearly helpful, but it's hardly a simple cause and effect.
Levels of different mental health problems appear to differ widely across
societies just in Europe, and it isn't particularly the case that more capitalist
countries have greater incidence than less capitalist ones.
You could just as well blame atheism. Since the rise of neo-liberalism
and drop in church attendance track each other pretty well, and since for
all their ills churches did provide a social support group, why not blame
that?
While attending a church is likely to alleviate loneliness, atheism doesn't
expressly encourage limiting social interactions and selfishness. And of
course, reduced church attendance isn't exactly the same as atheism.
Neoliberalism expressly encourages 'atomisation'- it is all about
reducing human interaction to markets. And so this is just one of the reasons
that neoliberalism is such a bunk philosophy.
So why are we engaging in this world-eating, self-consuming frenzy
of environmental destruction and social dislocation, if all it produces
is unbearable pain?
My stab at an answer would first question the notion that we
are engaging in anything. That presupposes we are making the
choices. Those who set out the options are the ones that make the choices.
We are being engaged by the grotesquely privileged and the pathologically
greedy in an enterprise that profits them still further. It suits the 1%
very well strategically, for obvious reasons, that the 99% don't swap too
many ideas with each other.
We as individuals are offered the 'choice' of consumption as an alternative
to the devastating ennui engendered by powerlessness. It's no choice at
all of course, because consumption merely enriches the 1% and exacerbates
our powerlessness. That was the whole point of my post.
The 'choice' to consume is never collectively exercised as you suggest.
Sadly. If it was, 'we' might be able to organise ourselves into doing something
about it.
According to Robert Putnam, as societies become more ethnically diverse
they lose social capital, contributing to the type of isolation and loneliness
which George describes. Doesn't sound as evil as neoliberalism I suppose.
Disagree. Im British but have had more foreign friends than British. The
UK middle class tend to be boring insular social status obsessed drones.other
nationalities have this too, but far less so
Well, yes, but multiculturalism is a direct result of Neoliberalism.
The market rules and people are secondary. Everything must be done for business
owners, and that everything means access to cheap labor.
Multiculturalism isn't the only thing destroying social cohesion, too.
It was being destroyed long before the recent surges of immigrants. It was
reported many times in the 1980's in communities made up of only one culture.
In many ways, it is being used as the obvious distraction from all the other
ways Fundamentalist Free Marketers wreck live for many.
This post perhaps ranges too widely to the point of being vague and general,
and leading Monbiot to make some huge mental leaps, linking loneliness to
a range of mental and physical problems without being able to explain, for
example, the link between loneliness and obesity and all the steps in-between
without risking derailment into a side issue.
I'd have thought what he really wants to say is that loneliness as
a phenomenon in modern Western society arises out of an intent on the part
of our political and social elites to divide us all into competing against
one another, as individuals and as members of groups, all the better to
keep us under control and prevent us from working together to claim our
fair share of resources.
Are you familiar with the term 'Laughter is the best medicine'? Well, it's
true. When you laugh, your brain releases endorphins, yeah? Your stress
hormones are reduced and the oxygen supply to your blood is increased, so...
I try to laugh several times a day just because... it makes you feel
good! Let's try that, eh? Ohohoo... Hahaha... Just, just... Hahahaha...
Come on, trust me.. you'll feel.. HahaHAhaha! O-o-o-o-a-hahahahaa... Share
No. It has been the concentrated propaganda of the "free" press. Rupert
Murdoch in particular, but many other well-funded organisations working
in the background over 50 years. They are winning.
We're fixated on a magical, abstract concept called "the economy".
Everything must be done to help "the economy", even if this means adults
working through their weekends, neglecting their children, neglecting their
elderly parents, eating at their desks, getting diabetes, breaking down
from stress, and giving up on a family life.
Impertinent managers ban their staff from office relationships, as company
policy, because the company is more important than its staff's wellbeing.
Companies hand out "free" phones that allow managers to harrass staff
for work out of hours, on the understanding that they will be sidelined
if thy don't respond.
And the wellbeing of "the economy" is of course far more important than
whether the British people actually want to merge into a European superstate.
What they want is irrelevant.
That nasty little scumbag George Osborne was the apotheosis of this ideology,
but he was abetted by journalists who report any rise in GDP as "good" -
no matter how it was obtained - and any "recession" to be the equivalent
of a major natural disaster.
If we go on this way, the people who suffer the most will be the rich,
because it will be them swinging from the lamp-posts, or cowering in gated
communities that they dare not leave (Venezuela, South Africa). Those riots
in London five years ago were a warning. History is littered with them.
You can make a reasonable case that 'Neoliberalism' expects that every
interaction, including between individuals, can be reduced to a financial
one. If this results in loneliness then that's certainly a downside
- but the upside is that billions have been lifted out of absolute poverty
worldwide by 'Neoliberalism'.
Mr Monbiot creates a compelling argument that we should end 'Neoliberalism'
but he is very vague about what should replace it other than a 'different
worldview'. Destruction is easy, but creation is far harder.
As a retired teacher it grieves me greatly to see the way our education
service has become obsessed by testing and assessment. Sadly the results
are used not so much to help children learn and develop, but rather as a
club to beat schools and teachers with. Pressurised schools produce pressurised
children. Compare and contrast with education in Finland where young people
are not formally assessed until they are 17 years old. We now assess toddlers
in nursery schools.
SATs in Primary schools had children concentrating on obscure grammatical
terms and usage which they will never ever use again. Pointless and counter-productive.
Gradgrind values driving out the joy of learning.
And promoting anxiety and mental health problems.
It is all the things you describe, Mr Monbiot, and then some. This dystopian
hell, when anything that did work is broken and all things that have never
worked are lined up for a little tinkering around the edges until the camouflage
is good enough to kid people it is something new. It isn't just neoliberal
madness that has created this, it is selfish human nature that has made
it possible, corporate fascism that has hammered it into shape. and an army
of mercenaries who prefer the take home pay to morality. Crime has always
paid especially when governments are the crooks exercising the law.
The value of life has long been forgotten as now the only thing that
matters is how much you can be screwed for either dead or alive. And yet
the Trumps, the Clintons, the Camerons, the Johnsons, the Merkels, the Mays,
the news media, the banks, the whole crooked lot of them, all seem to believe
there is something worth fighting for in what they have created, when painfully
there is not. We need revolution and we need it to be lead by those who
still believe all humanity must be humble, sincere, selfless and most of
all morally sincere. Freedom, justice, and equality for all, because the
alternative is nothing at all.
Ive long considered neo-liberalism as the cause of many of our problems,
particularly the rise in mental health problems, alienation and loneliness.
As can be seen from many of the posts, neo-liberalism depends on, and
fosters, ignorance, an inability to see things from historical and different
perspectives and social and intellectual disciplines. On a sociological
level how other societies are arranged throws up interesting comparisons. Scandanavian countries, which have mostly avoided neo-liberalism by and
large, are happier, healthier places to live. America and eastern countries
arranged around neo-liberal, market driven individualism, are unhappy places,
riven with mental and physical health problems and many more social problems
of violence, crime and suicide.
The worst thing is that the evidence shows it doesn't work. Not one of
the privatisations in this country have worked. All have been worse than
what they've replaced, all have cost more, depleted the treasury and led
to massive homelessness, increased mental health problems with the inevitable
financial and social costs, costs which are never acknowledged by its adherents.
Put crudely, the more " I'm alright, fuck you " attitude is fostered,
the worse societies are. Empires have crashed and burned under similar attitudes.
The people who fosted this this system onto us, are now either very old
or dead.
We're living in the shadow of their revolutionary transformation of our
more equitable post-war society. Hayek, Friedman, Keith Joseph, Thatcher,
Greenspan and tangentially but very influentially Ayn Rand.
Although a remainder (I love the wit of the term 'Remoaner') , Brexit can
be better understood in the context of the death-knell of neoliberalism.
I never understood how the collapse of world finance, resulted in a right
wing resurgence in the UK and the US. The Tea Party in the US made the absurd
claim that the failure of global finance was not due to markets being fallible,
but because free markets had not been enforced citing Fanny Mae and Freddie
Mac as their evidence and of Bill Clinton insisting on more poor and black
people being given mortgages.
I have a terrible sense that it will not go quietly, there will be massive
global upheavals as governments struggle deal with its collapse.
I have never really agreed with GM - but this article hits the nail on the
head.
I think there are a number of aspects to this:
The internet. The being in constant contact, our lives mapped and
our thoughts analysed - we can comment on anything (whether informed or
total drivel) and we've been fed the lie that our opinion is is right and
that it matters) Ive removed fscebook and twitter from my phone, i have
never been happier
Rolling 24 hour news. That is obsessed with the now, and consistently
squeezes very complex issues into bite sized simple dichotomies. Obsessed
with results and critical in turn of everyone who fails to feed the machine
The increasing slicing of work into tighter and slimmer specialisms,
with no holistic view of the whole, this forces a box ticking culture. "Ive
stamped my stamp, my work is done" this leads to a lack of ownership of
the whole. PIP assessments are an almost perfect example of this - a box
ticking exercise, designed by someone who'll never have to go through it,
with no flexibility to put the answers into a holistic context.
Our education system is designed to pass exams and not prepare for
the future or the world of work - the only important aspect being the compilation
of next years league tables and the schools standings. This culture is neither
healthy no helpful, as students are schooled on exam technique in order
to squeeze out the marks - without putting the knowledge into a meaningful
and understandable narrative.
Apologies for the long post - I normally limit myself to a trite insulting
comment :) but felt more was required in this instance.
Overall, I agree with your points. Monbiot here adopts a blunderbuss approach
(competitive self-interest and extreme individualism; "brutal" education,
employment social security; consumerism, social media and vanity). Criticism
of his hypotheses on this thread (where articualted at all) focus on the
existence of solitude and loneliness prior to neo liberalism, which seems
to me to be to deliberately miss his point: this was formerly a minor phenomenon,
yet is now writ on an incredible scale - and it is a social phenomenon particular
to those western economies whose elites have most enthusiastically embraced
neo liberalism. So, when Monbiot's rhetoric rises:
"So why are we engaging in this world-eating, self-consuming frenzy
of environmental destruction and social dislocation, if all it produces
is unbearable pain?"
the answer is, of course, 'western capitalist elites'.
We stand together or we fall apart.
Hackneyed and unoriginal but still true for all that.
the answer is, of course, 'western capitalist elites'.
because of the lies that are being sold.
We all want is to: (and feel we have the right to) wear the best clothes,
have the foreign holidays, own the latest tech and eat the finest foods.
At the same time our rights have increased and awareness of our responsibilities
have minimized. The execution of common sense and an awareness that everything
that goes wrong will always be someone else fault.
We are not all special snowflakes, princesses or worthy of special treatment,
but we act like self absorbed, entitled individuals. Whether that's entitled
to benefits, the front of the queue or bumped into first because its our
birthday!
I share Monbiots pain here. But rather than get a sense of perspective
- the answer is often "More public money and counseling"
George Monbiot has struck a nerve.
They are there every day in my small town local park: people, young and
old, gender and ethnically diverse, siting on benches for a couple of hours
at a time.
They have at least one thing in common.
They each sit alone, isolated in their own thoughts..
But many share another bond: they usually respond to dogs, unconditional
in their behaviour patterns towards humankind.
Trite as it may seem, this temporary thread of canine affection breaks the
taboo of strangers
passing by on the other side.
Conversations, sometimes stilted, sometimes deeper and more meaningful,
ensue as dog walkers become a brief daily healing force in a fractured world
of loneliness.
It's not much credit in the bank of sociability.
But it helps.
Trite as it may seem from the outside, their interaction with the myriad
pooches regularly walk
Unhealthy social interaction, yes. You can never judge what is natural to
humans based on contemporary Britain. Anthropologists repeatedly find that
what we think natural is merely a social construct created by the system
we are subject to.
If you don't work hard, you will be a loser, don't look out of the window
day dreaming you lazy slacker. Get productive, Mr Burns millions need you
to work like a machine or be replaced by one.
Good article. You´re absoluately right. And the deeper casue is this: separation
from God. If we don´t fight our way back to God, individually and collectively,
things are going to get a lot worse. With God, loneliness doesn´t exist.
I encourage anyone and everyone to start talking to Him today and invite
Him into your heart and watch what starts to happen.
Religion divides not brings people together. Only when you embrace all humanity
and ignore all gods will you find true happiness. The world and the people
in it are far more inspiring when you contemplate the lack of any gods.
The fact people do amazing things without needing the promise of heaven
or the threat of hell - that is truly moving.
I see what you're saying but I read 'love' instead of God. God is too religious
which separates and divides ("I'm this religion and my god is better than
yours" etc etc). I believe that George is right in many ways in that money
is very powerful on it's impact on our behavior (stress, lack etc) and
therefore our lives. We are becoming fearful of each other and I believe
the insecurity we feel plays a part in this.
We have become so disconnected
from ourselves and focused on battling to stay afloat. Having experienced
periods of severe stress due to lack of money I couldn't even begin to think
about how I felt, how happy I was, what I really wanted to do with my life.
I just had to pay my landlord, pay the bills and try and put some food on
my table so everything else was totally neglected.
When I moved house to
move in with family and wasn't expected to pay rent, though I offered, all
that dissatisfaction and undealt with stuff came spilling out and I realised
I'd had no time for any real safe care above the very basics and that was
not a good place to be. I put myself into therapy for a while and started
to look after myself and things started to change. I hope to never go back
to that kind of position but things are precarious financially and the field
I work in isn't well paid but it makes me very happy which I realise now
is more important.
Neo-liberalism has a lot to answer for in bringing misery to our lives and
accelerating the demise of the planet but I find it not guilty on this one. The current trends as to how people perceive themselves (what you've
got rather than who you are) and the increasing isolation in our cities
started way before the neo-liberals. It is getting worse though and on balance social media is making us more
connected but less social. Share
The way that the left keeps banging on about neoliberalism is half of what
makes them such a tough sell electorally. Just about nobody knows what neoliberalism
is, and literally nobody self identifies as a neoliberal. So all this moaning
and wailing about neoliberalism comes across as a self absorbed, abstract
and irrelevant. I expect there is the germ of an idea in there, but until
the left can find away to present that idea without the baffling layer of
jargon and over-analysis, they're going to remain at a disadvantage to the
easy populism of the right.
Interesting article. We have heard so much about the size of our economy
but less about our quality of life. The UK quality of life is way below
the size of our economy i.e. economy size 6th largest in the world but quality
of life 15th. If we were the 10th largest economy but were 10th for quality
of life we would be better off than we are now in real terms.
We need a
radical change of political thinking to focus on quality of life rather
than obsession with the size of our economy. High levels of immigration
of people who don't really integrate into their local communities has fractured
our country along with the widening gap between rich and poor. Governments
only see people in terms of their "economic value" - hence mothers being
driven out to work, children driven into daycare and the elderly driven
into care homes. Britain is becoming a soulless place - even our great British
comedy is on the decline.
Interesting. 'It is the isolated and marginalised animals that are most
likely to be picked off by predators....' so perhaps the species is developing
its own predators to fill a vacated niche.
(Not questioning the comparison to other mammals at all as I think it
is valid but you would have to consider the whole rather than cherry pick
bits)
Generation snowflake. "I'll do myself in if you take away my tablet and
mobile phone for half an hour".
They don't want to go out and meet people anymore. Nightclubs for instance,
are closing because the younger generation 'don't see the point' of going
out to meet people they would otherwise never meet, because they can meet
people on the internet. Leave them to it and the repercussions of it.....
Socialism is dying on its feet in the UK, hence the Tory's 17 point lead
at the mo. The lefties are clinging to whatever influence they have to sway
the masses instead of the ballot box. Good riddance to them.
17 point lead? Dying on it's feet? The neo-liberals are showing their disconnect
from reality. If anything, neo-liberalism is driving a people to the left
in search of a fairer and more equal society.
George Moniot's articles are better thought out, researched and written
than the vast majority of the usual clickbait opinion pieces found on the
Guardian these days. One of the last journalists, rather than liberal arts
blogger vying for attention.
Neoliberalism's rap sheet is long and dangerous but this toxic philosophy
will continue unabated because most people can't join the dots and work
out how detrimental it has proven to be for most of us.
It dangles a carrot in order to create certain economic illusions but
the simple fact is neoliberal societies become more unequal the longer they
persist.
Neoliberal economies allow people to build huge global businesses very quickly
and will continue to give the winners more but they also can guve everyone
else more too but just at a slower rate. Socialism on the other hand mires
everyone in stagnant poverty. Question is do you want to be absolutely or
relatively better off.
You have no idea. Do not confuse capitalism with neoliberalism. Neoliberalism
is a political ideology based on a mythical version of capitalism that doesn't
actually exist, but is a nice way to get the deluded to vote for something
that doesn't work in their interest at all.
And things will get worse as society falls apart due to globalisation, uberization,
lack of respect for authority, lacks of a fair tax and justice system, crime,
immorality, loss of trust of politicians and financial and corporate sectors,
uncontrolled immigration bringing with it insecurity and the risk of terrorism
and a dumbing down of society with increasing inequality. All this is in
a new book " The World at a Crossroads" which deals with the major issues
facing the planet.
What, like endless war, unaffordable property, monstrous university fees,
zero hours contracts and a food bank on every corner, and that's before
we even get to the explosion in mental distress.
There's nothing spurious or obscure about Neoliberalism. It is simply the
political ideology of the rich, which has been our uninterrupted governing
ideology since Reagan and Thatcher: Privatisation, deregulation, 'liberalisation'
of housing, labour, etc, trickledown / low-tax-on-the-rich economics, de-unionization.
You only don't see it if you don't want to see it.
I'm just thinking what is wonderful about societies that are big of social
unity. And conformity.
Those societies for example where you "belong" to your family. Where
teenage girls can be married off to elderly uncles to cement that belonging.
Or those societies where the belonging comes through religious centres.
Where the ostracism for "deviant" behaviour like being gay or for women
not submitting to their husbands can be brutal. And I'm not just talking
about muslims here.
Or those societies that are big on patriotism. Yep they are usually good
for mental health as the young men are given lessons in how to kill as many
other men as possible efficiently.
And then I have to think how our years of "neo-liberal" governments have
taken ideas of social liberalisation and enshrined them in law. It may be
coincidence but thirty years after Thatcher and Reagan we are far more tolerant
of homosexuality and willing to give it space to live, conversely we are
far less tolerant of racism and are willing to prosecute racist violence.
Feminists may still moan about equality but the position of women in society
has never been better, rape inside marriage has (finally) been outlawed,
sexual violence generally is no longer condoned except by a few, work opportunities
have been widened and the woman's role is no longer just home and family.
At least that is the case in "neo-liberal" societies, it isn't necessarily
the case in other societies.
So unless you think loneliness is some weird Stockholm Syndrome thing
where your sense of belonging comes from your acceptance of a stifling role
in a structured soiety, then I think blaming the heightened respect for
the individual that liberal societies have for loneliness is way off the
mark.
What strikes me about the cases you cite above, George, is not an over-respect
for the individual but another example of individuals being shoe-horned
into a structure. It strikes me it is not individualism but competition
that is causing the unhappiness. Competition to achieve an impossible ideal.
I fear George, that you are not approaching this with a properly open
mind dedicated to investigation. I think you have your conclusion and you
are going to bend the evidence to fit. That is wrong and I for one will
not support that. In recent weeks and months we have had the "woe, woe and
thrice woe" writings. Now we need to take a hard look at our findings. We
need to take out the biases resulting from greater awareness of mental health
and better and fuller diagnosis of mental health issues. We need to balance
the bias resulting from the fact we really only have hard data for modern
Western societies. And above all we need to scotch any bias resulting from
the political worldview of the researchers.
It sounded to me that he was telling us of farm labouring and factory fodder
stock that if we'd 'known our place' and kept to it ,all would be well because
in his ideal society there WILL be or end up having a hierarchy, its inevitable.
Wasn't all this started by someone who said, "There is no such thing as
Society"? The ultimate irony is that the ideology that championed the individual
and did so much to dismantle the industrial and social fabric of the Country
has resulted in a system which is almost totalitarian in its disregard for
its ideological consequences.
Thatcher said it in the sense that society is not abstract it is just other
people so when you say society needs to change then people need to change
as society is not some independent concept it is an aggregation of all us.
The left mis quote this all the time and either they don't get it or they
are doing on purpose.
No, Neoliberalism has been around since 1938.... Thatcher was only responsible
for "letting it go" in Britain in 1980, but actually it was already racing
ahead around the world.
Furthermore, it could easily be argued that the Beatles helped create
loneliness - what do you think all those girls were screaming for? And also
it could be argued that the Beatles were bringing in neoliberalism in the
1960s, via America thanks to Elvis Presley and Jerry Lee Lewis etc.. Share
Great article, although surely you could've extended the blame to capitalism
has a whole?
In what, then, consists the alienation of labor? First, in the fact
that labor is external to the worker, i.e., that it does not belong
to his nature, that therefore he does not realize himself in his work,
that he denies himself in it, that he does not feel at ease in it, but
rather unhappy, that he does not develop any free physical or mental
energy, but rather mortifies his flesh and ruins his spirit. The worker,
therefore, is only himself when he does not work, and in his work he
feels outside himself. He feels at home when he is not working, and
when he is working he does not feel at home. His labor, therefore, is
not voluntary, but forced--forced labor. It is not the gratification
of a need, but only a means to gratify needs outside itself. Its alien
nature shows itself clearly by the fact that work is shunned like the
plague as soon as no physical or other kind of coercion exists.
Marx, Economic and Philosophical Manuscripts of 1844
We have created a society with both flaws and highlights- and we have unwittingly
allowed the economic system to extend into our lives in negative ways.
On of the things being modern brings is movement- we move away from communities,
breaking friendships and losing support networks, and the support networks
are the ones that allow us to cope with issues, problems and anxiety.
Isolation among the youth is disturbing, it is also un natural, perhaps
it is social media, or fear of parents, or the fall in extra school activities
or parents simply not having a network of friends because they have had
to move for work or housing.
There is some upsides, I talk and get support from different international
communities through the social media that can also be so harmful- I chat
on xbox games, exchange information on green building forums, arts forums,
share on youtube as well as be part of online communities that hold events
in the real world.
Increasingly we seem to need to document our lives on social media to somehow
prove we 'exist'. We seem far more narcissistic these days, which tends
to create a particular type of unhappiness, or at least desire that can
never be fulfilled. Maybe that's the secret of modern consumer-based capitalism.
To be happy today, it probably helps to be shallow, or avoid things like
Twitter and Facebook!
Eric Fromm made similar arguments to Monbiot about the psychological
impact of modern capitalism (Fear of Freedom and The Sane Society) - although
the Freudian element is a tad outdated. However, for all the faults of modern
society, I'd rather be unhappy now than in say, Victorian England. Similarly,
life in the West is preferable to the obvious alternatives.
Thanks George for commenting in such a public way on the unsayable: consume,
consume, consume seems to be the order of the day in our modern world and
the points you have highlighted should be part of public policy everywhere.
I'm old enough to remember when we had more time for each other; when
mothers could be full-time housewives; when evenings existed (evenings now
seem to be spent working or getting home from work). We are undoubtedly
more materialistic, which leads to more time spent working, although our
modern problems are probably not due to increasing materialism alone.
Regarding divorce and separation, I notice people in my wider circle
who are very open to affairs. They seem to lack the self-discipline to concentrate
on problems in their marriage and to give their full-time partner a high
level of devotion. Terrible problems come up in marriages but if you are
completely and unconditionally committed to your partner and your marriage
then you can get through the majority of them.
Aggressive self interest is turning in on itself. Unfortunately the powerful
who have realised their 'Will to Power' are corrupted by their own inflated
sense of self and thus blinded. Does this all predict a global violent revolution?
However, what is most interesting is how nearly all modern politicians
who peddle neoliberal doctrine or policy, refuse to use the name, or even
to openly state what ideology they are in fact following.
I suppose it is just a complete coincidence that the policy so many governments
are now following so closely follow known neoliberal doctrine. But of course
the clever and unpleasant strategy of those like yourself is to cry conspiracy
theory if this ideology, which dare not speak its name is mentioned.
Your style is tiresome. You make no specific supported criticisms again,
and again. You just make false assertions and engage in unpleasant ad homs
and attempted character assassination. You do not address the evidence for
what George Monbiot states at all.
An excellent article. One wonders exactly what one needs to say in order
to penetrate the reptilian skulls of those who run the system.
As an addition to Mr Monbiot's points, I would like to point out that
it is not only competitive self-interest and extreme individualism that
drives loneliness. Any system that has strict hierarchies and mechanisms
of social inclusion also drives it, because such systems inhibit strongly
spontaneous social interaction, in which people simply strike up conversation.
Thailand has such a system. Despite her promoting herself as the land of
smiles, I have found the people here to be deeply segregated and unfriendly.
I have lived here for 17 years. The last time I had a satisfactory face-to-face
conversation, one that went beyond saying hello to cashiers at checkout
counters or conducting official business, was in 1999. I have survived by
convincing myself that I have dialogues with my books; as I delve more deeply
into the texts, the authors say something different to me, to which I can
then respond in my mind.
Epidemics of mental illness are crushing the minds and bodies of
millions. It's time to ask where we are heading and why
I want to quote the sub headline, because "It's time to ask where we are
heading and why", is the important bit. George's excellent and scathing
evidence based criticism of the consequences of neoliberalism is on the
nail. However, we need to ask how we got to this stage. Despite it's name
neoliberalism doesn't really seem to contain any new ideas, and in some
way it's more about Thatcher's beloved return to Victorian values. Most
of what George Monbiot highlights encapsulatec Victorian thinking, the sort
of workhouse mentality.
Whilst it's very important to understand how neoliberalism, the ideology
that dare not speak it's name, derailed the general progress in the developed
world. It's also necessary to understand that the roots this problem go
much further back. Not merely to the start of the industrial revolution,
but way beyond that. It actually began with the first civilizations when
our societies were taken over by powerful rulers, and they essentially started
to farm the people they ruled like cattle. On the one hand they declared
themselves protector of their people, whilst ruthlessly exploiting them
for their own political gain. I use the livestock farming analogy, because
that explains what is going on.
To domesticate livestock, and to make them pliable and easy to work with
the farmer must make himself appear to these herd animals as if they are
their protector, the person who cares for them, nourishes and feeds them.
They become reliant on their apparent benefactor. Except of course this
is a deceitful relationship, because the farmer is just fattening them up
to be eaten.
For the powerful to exploit the rest of people in society for their own
benefit they had to learn how to conceal what they were really doing, and
to wrap it in justifications to bamboozle the people they were exploiting
for their own benefit. They did this by altering our language and inserting
ideas in our culture which justified their rule, and the positions of the
rest of us.
Before state religions, generally what was revered was the Earth, the
natural world. It was on a personal level, and not controlled by the powerful.
So the powerful needed to remove that personal meaningfulness from people's
lives, and said the only thing which was really meaningful, was the religion,
which of course they controlled and were usually the head of. Over generations
people were indoctrinated in a completely new way of thinking, and a language
manipulated so all people could see was the supposed divine right of kings
to rule. Through this language people were detached from what was personally
meaningful to them, and could only find meaningfulness by pleasing their
rulers, and being indoctrinated in their religion.
If you control the language people use, you can control how perceive
the world, and can express themselves.
By stripping language of meaningful terms which people can express themselves,
and filling it full of dubious concepts such as god, the right of kings
completely altered how people saw the world, how they thought. This is why
over the ages, and in different forms the powerful have always attempted
to have full control of our language through at first religion and their
proclamations, and then eventually by them controlling our education system
and the media.
The idea of language being used to control how people see the world,
and how they think is of course not my idea. George Orwell's Newspeak idea
explored in "1984" is very much about this. https://en.wikipedia.org/wiki/Newspeak
This control of language is well known throughout history. Often conquerors
would abolish languages of those they conquered. In the so called New World
the colonists eventually tried to control how indigenous people thought
by forcibly sending their children to boarding school, to be stripped of
their culture, their native language, and to be inculcated in the language
and ideas of their colonists. In Britain various attempts were made to banish
the Welsh language, the native language of the Britons, before the Anglo-Saxons
and the Normans took over.
However, what Orwell did not deal with properly is the origin of language
style. To Orwell, and to critics of neoliberalism, the problems can be traced
back to the rise of what they criticised. To a sort of mythical golden age.
Except all the roots of what is being criticised can be found in the period
before the invention of these doctrines. So you have to go right back to
the beginning, to understand how it all began.
Neoliberalism would never have been possible without this long control
of our language and ideas by the powerful. It prevents us thinking outside
the box, about what the problem really is, and how it all began.
All very well but you are talking about ruthlessness of western elites,
mostly British, not all.
It was not like that everywhere. Take Poland for example, and around
there..
New research is emerging - and I'd recommend reading of prof Frost from
St Andrew's Uni - that lower classes were actually treated with respect
by elites there, mainly land owners and aristocracy who more looked after
them and employed and cases of such ruthlessness as you describe were unknown
of.
So that 'truth' about attitudes to lower classes is not universal!
It's spouted by many on here as the root of all evil.
I'd be interested to see how many different definitions I get in
response...
The reason I call neoliberalism the ideology which dare not speak it's name
is that in public you will rarely hear it mentioned by it's proponents.
However, it was a very important part of Thatcherism, Blairism, and so on.
What is most definite is that these politicians and others are most definitely
following some doctrine. Their ideas about what we must do and how we must
do it are arbitrary, but they make it sound as if it's the only way to do
things.
However, as I hint, the main problem in dealing with neoliberalism is
that none of the proponents of this doctrine admit to what ideology they
are actually following. Yet very clearly around the world leaders in many
countries are clearly singing from the same hymn sheet because the policy
they implement is so similar. Something has definitely changed. All the
attempts to roll back welfare, benefits, and public services is most definitely
new, or they wouldn't be having to reverse policy of the past if nothing
had change. But as all these politicians implementing this policy all seem
to refuse to explain what doctrine they are following, it makes it difficult
to pin down what is happening. Yet we can most definitely say that there
is a clear doctrine at work, because why else would so many political leaders
around the world be trying to implement such similar policy.
Neo-liberalism doesn't really exist except in the minds of the far
left and perhaps a few academics.
Neoliberalism is a policy model of social studies and economics that
transfers control of economic factors to the private sector from the public
sector. ... Neoliberal policies aim for a laissez-faire approach to economic
development.
I believe the term 'Neo liberalism' was coined by those well known 'Lefties'The
Chicago School .
If you don't believe that any of the above has been happening ,it does beg
the question as to where you have been for the past decade.
The ironies of modern civilization - we have never been more 'connected'
to other people on global level and less 'connected' on personal level.
We have never had access to such a wide range of information and opinions,
but also for a long time been so divided into conflicting groups, reading
and accessing in fact only that which reinforces what we already think.
Sir Harry Burns, ex-Chief Medical Officer in Scotland talks very powerfully
about the impact of loneliness and isolation on physical and mental health
- here is a video of a recent talk by him -
http://www.befs.org.uk/calendar/48/164-BEFS-Annual-Lecture
These issues have been a long time coming, just think of the appeals of
the 60's to chill out and love everyone. Globalisation and neo-liberalism
has simply made society even more broken.
The way these problems have been ignored and made worse over the last few
decades make me think that the solution will only happen after a massive
catastrophe and society has to be rebuilt. Unless we make the same mistakes
again.
A shame really, you would think intelligence would be useful but it seems
not.
I would argue that it creates a bubble of existence for those who pursue
a path of "success" that instead turns to isolation . The amount of people
that I have met who have moved to London because to them it represents the
main location for everything . I get to see so many walking cliches of people
trying to fit in or stand out but also fitting in just the same .
The real disconnect that software is providing us with is truly staggering
. I have spoken to people from all over the World who seem to feel more
at home being alone and playing a game with strangers . The ones who are
most happy are those who seem to be living all aloe and the ones who try
and play while a girlfriend or family are present always seemed to be the
ones most agitated by them .
We are humans relying on simplistic algorithms that reduce us ,apps like
Tinder which turns us into a misogynist at the click of a button .
Facebook which highlights our connections with the other people and assumes
that everyone you know or have met is of the same relevance .
We also have Twitter which is the equivalent of screaming at a television
when you are drunk or angry .
We have Instagram where people revel in their own isolation and send
updates of it . All those products that are instantly updated and yet we
are ageing and always feeling like we are grouped together by simple algorithms
.
Television has been the main destroyer of social bonds since the 1950s and
yet it is only mentioned once and in relation to the number of competitions
on it, which completely misses the point. That's when I stopped taking this
article seriously.
I actually blame Marx for neoliberalism. He framed society purely in terms
economic, and persuaded that ideology is valuable in as much as it is actionable.
For a dialectician he was incredibly short sighted and superficial, not
realising he was creating a narrative inimical to personal expression and
simple thoughtfulness (although he was warned). To be fair, he can't have
appreciated how profoundly he would change the way we concieve societies.
Neoliberalism is simply the dark side of Marxism and subsumes the personal
just as comprehensively as communism.
We're picked apart by quantification and live as particulars, suffering
the ubiquitous consequences of connectivity alone . . .
Unless, of course, you get out there and meet great people!
Neo-liberalism allows psychopaths to flourish, and it has been argued by
Robert Hare that they are disproportionately represented in the highest
echelons of society. So people who lack empathy and emotional attachment
are probably weilding a significant amount of influence over the way our
economy and society is organised. Is it any wonder that they advocate an
economic model which is most conducive to their success? Things like job
security, rigged markets, unions, and higher taxes on the rich simply get
in their way.
That fine illustration by Andrzej Krauze up there is exactly what I see
whenever I walk into an upscale mall or any Temple of Consumerism.
You can hear the Temple calling out: "Feel bad, atomized individuals?
Have a hole inside? Feel lonely? That's all right: buy some shit you don't
need and I guarantee you'll feel better."
And then it says: "So you bought it and you felt better for five minutes,
and now you feel bad again? Well, that's not rocket science...you should
buy MORE shit you don't need! I mean, it's not rocket science, you should
have figured this out on your own."
And then it says: "Still feel bad and you have run out of money? Well,
that's okay, just get it on credit, or take out a loan, or mortgage your
house. I mean, it's not rocket science. Really, you should have figured
this out on your own already...I thought you were a modern, go-get-'em,
independent, initiative-seizing citizen of the world?"
And then it says: "Took out too many loans, can't pay the bills and
the repossession has begun? Honestly, that's not my problem. You're just
a bad little consumer, and a bad little liberal, and everything is your
own fault. You go sit in a dark corner now where you don't bother the other
shoppers. Honestly, you're just being a burden on other consumers now. I'm
not saying you should kill yourself, but I can't say that we would mind
either."
And that's how the worms turn at the Temples of Consumerism and Neoliberalism.
I kept my sanity by not becoming a spineless obedient middle class pleaser
of a sociopathic greedy tribe pretending neoliberalism is the future.
The result is a great clarity about the game, and an intact empathy for
all beings.
The middle class treated each conscious "outsider" like a lowlife,
and now they play the helpless victims of circumstances.
I know why I renounced to my privileges.
They sleepwalk into their self created disorder.
And yes, I am very angry at those who wasted decades with their social stupidity,
those who crawled back after a start of change into their petit bourgeois
niche.
I knew that each therapist has to take a stand and that the most choose
petty careers.
Do not expect much sanity from them for your disorientated kids.
Get insightful yourself and share your leftover love to them.
Try honesty and having guts...that might help both of you.
Alternatively, neo-liberalism has enabled us to afford to live alone (entire
families were forced to live together for economic reasons), and technology
enables us to work remotely, with no need for interaction with other people.
This may make some people feel lonely, but for many others its utopia.
Some of the things that characterise Globalisation and Neoliberalism are
open borders and free movement. How can that contribute to isolation? That
is more likely to be fostered by Protectionism.
And there aren't fewer jobs. Employment is at record highs here and in many
other countries. There are different jobs, not fewer, and to be sure there
are some demographics that have lost out. But overall there are not fewer
jobs. That falls for the old "lump of labour" fallacy.
The corrosive state of mass television indoctrination sums it up: Apprentice,
Big Brother, Dragon's Den. By degrees, the standard keeps lowering. It is
no longer unusual for a licence funded TV programme to consist of a group
of the mentally deranged competing to be the biggest asshole in the room.
Anomie is a by-product of cultural decline as much as economics.
Our whole culture is more stressful. Jobs are more precarious; employment
rights more stacked in favor of the employer; workforces are deunionised;
leisure time is on the decrease; rents are unaffordable; a house is no longer
a realistic expectation for millions of young people. Overall, citizens
are more socially immobile and working harder for poorer real wages than
they were in the late 70's.
Unfortunately, sexual abuse has always been a feature of human societies.
However there is no evidence to suggest it was any worse in the past. Then
sexual abuse largely took place in institutional settings were at least
it could be potentially addressed. Now much of it has migrated to the great
neoliberal experiment of the internet, where child exploitation is at endemic
levels and completely beyond the control of law enforcement agencies. There
are now more women and children being sexually trafficked than there were
slaves at the height of the slave trade. Moreover, we should not forget
that Jimmy Saville was abusing prolifically right into the noughties.
My parents were both born in 1948. They say it was great. They bought
a South London house for next to nothing and never had to worry about getting
a job. When they did get a job it was one with rights, a promise of a generous
pension, a humane workplace environment, lunch breaks and an ethos of public
service. My mum says that the way women are talked about now is worse.
Sounds fine to me. That's not to say everything was great: racism was
acceptable (though surely the vile views pumped out onto social media are
as bad or worse than anything that existed then), homosexuality was illegal
and capital punishment enforced until the 1960's. However, the fact that
these things were reformed showed society was moving in the right direction.
Now we are going backwards, back to 1930's levels or inequality and a reactionary,
small-minded political culture fueled by loneliness, rage and misery.
And there is little evidence to suggest that anyone has expanded their mind
with the internet. A lot of people use it to look at porn, post racist tirades
on Facebook, send rape threats, distributes sexual images of partners with
their permission, take endless photographs of themselves and whip up support
for demagogues. In my view it would much better if people went to a library
than lurked in corporate echo chambers pumping out the like of 'why dont
theese imagrantz go back home and all those lezbo fems can fuckk off too
ha ha megalolz ;). Seriously mind expanding stuff. Share
As a director and CEO of an organisation employing several hundred people
I became aware that 40% of the staff lived alone and that the workplace
was important to them not only for work but also for interacting with their
colleagues socially . This was encouraged and the organisation achieved
an excellent record in retaining staff at a time when recruitment was difficult.
Performance levels were also extremely high . I particulalry remember with
gratitude the solidarity of staff when one of our colleagues - a haemophiliac
- contracted aids through an infected blood transfusion and died bravely
but painfully - the staff all supported him in every way possible through
his ordeal and it was a privilege for me to work with such kind and caring
people .
Indeed. Those communities are often undervalued. However, the problem is,
as George says, lots of people are excluded from them.
They are also highly self-selecting (e.g. you need certain trains of
inclusivity, social adeptness, empathy, communication, education etc to
get the job that allows you to join that community).
Certainly I make it a priority in my life. I do create communities. I
do make an effort to stand by people who live like me. I can be a leader
there.
Sometimes I wish more people would be. It is a sustained, long-term effort.
Share
To add to this discussion, we might consider the strongest need and conflict
each of us experiences as a teenager, the need to be part of a tribe vs
the the conflict inherent in recognising one's uniqueness. In a child's
life from about 7 or 8 until adolescence, friends matter the most. Then
the young person realises his or her difference from everyone else and has
to grasp what this means.
Those of us who enjoyed a reasonably healthy upbringing will get through
the peer group / individuation stage with happiness possible either way
- alone or in friendship. Our parents and teachers will have fostered a
pride in our own talents and our choice of where to socialise will be flexible
and non-destructive.
Those of us who at some stage missed that kind of warmth and acceptance
in childhood can easily stagnate. Possibly this is the most awkward of personal
developmental leaps. The person neither knows nor feels comfortable with
themselves, all that faces them is an abyss.
Where creative purpose and strength of spirit are lacking, other humans
can instinctively sense it and some recoil from it, hardly knowing what
it's about. Vulnerabilities attendant on this state include relationships
holding out some kind of ersatz rescue, including those offered by superficial
therapists, religions, and drugs, legal and illegal.
Experience taught that apart from the work we might do with someone deeply
compassionate helping us where our parents failed, the natural world
is a reliable healer. A kind of self-acceptance and individuation is
possible away from human bustle. One effect of the seasons and of being
outdoors amongst other life forms is to challenge us physically, into present
time, where our senses start to work acutely and our observational skills
get honed, becoming more vibrant than they could at any educational establishment.
This is one reason we have to look after the Earth, whether it's in a
city context or a rural one. Our mental, emotional and physical health is
known to be directly affected by it.
A thoughtful article. But the rich and powerful will ignore it; their doing
very well out of neo liberalism thank you. Meanwhile many of those whose
lives are affected by it don't want to know - they're happy with their bigger
TV screen. Which of course is what the neoliberals want, 'keep the people
happy and in the dark'. An old Roman tactic - when things weren't
going too well for citizens and they were grumbling the leaders just
extended the 'games'. Evidently it did the trick
The rich and powerful can be just as lonely as you and me. However, some
of them will be lonely after having royally forked the rest of us over...and
that is another thing
- Fight Club
People need a tribe to feel purpose. We need conflict, it's essential for
our species... psychological health improved in New York after 9/11.
Totally agree with the last sentences. Human civilisation is a team effort.
Individual humans cant survive, our language evolved to aid cooperation.
Neo-liberalism is really only an Anglo-American project. Yet we are so
indoctrinated in it, It seems natural to us, but not to hardly any other
cultures.
As for those "secondary factors. Look to advertising and the loss of
real jobs forcing more of us to sell services dependent on fake needs. Share
It's importance for social cohesion -- yes inspite of the problems , can
not be overestimated .Don't let the rich drive it out , people who don't
understand ,or care what it's for .The poorer boroughs cannot afford it
.K&C have easily 1/2billion in Capital Reserves ,so yes they must continue
. Here I can assure you ,one often sees the old and lonely get a hug .If
drug gangs are hitting each other or their rich boy customers with violence
- that is a different matter . And yes of course if we don't do something
to help boys from ethnic minorities ,with education and housing -of course
it only becomes more expensive in the long run.
Boris Johnson has idiotically mouthed off about trying to mobilise people
to stand outside the Russian Embassy , as if one can mobilise youth by telling
them to tidy their bedroom .Because that's all it amounts to - because you
have to FEEL protest and dissent . Well here at Carnival - there it is ,protest
and dissent . Now listen to it . And of course it will be far easier than
getting any response from sticking your tongue out at the Putin monster --
He has his bombs , just as Kensington and Chelsea have their money.
(and anyway it's only another Boris diversion ,like building some fucking
stupid bridge ,instead of doing anything useful)
"Society" or at least organized society is the enemy of corporate power.
The idea of Neoliberal capitalism is to replace civil society with corporate
law and rule. The same was true of the less extreme forms of capitalism.
Society is the enemy of capital because it put restrictions on it and threatens
its power.
When society organizes itself and makes laws to protect society from
the harmful effects of capitalism, for example demands on testing drugs
to be sure they are safe, this is a big expense to Pfizer, there are many
examples - just now in the news banning sugary drinks. If so much as a small
group of parents forming a day care co-op decide to ban coca cola from their
group that is a loss of profit.
That is really what is going on, loneliness is a big part of human life,
everyone feels it sometimes, under Neoliberal capitalism it is simply more
exaggerated due to the out and out assault on society itself.
Well the prevailing Global Capitalist world view is still a combination
1. homocentric Cartesian Dualism i.e. seeing humans as most important and
sod all other living beings, and seeing humans as separate from all other
living beings and other humans and 2. Darwinian "survival of the fittest"
seeing everything as a competition and people as "winners and losers, weak
or strong with winners and the strong being most important". From these
2 combined views all kinds of "games" arise. The main one being the game
of "victim, rescuer, persecutor" (Transactional Analysis). The Guardian
engages in this most of the time and although I welcome the truth in this
article to some degree, surprisingly, as George is environmentally friendly,
it kinda still is talking as if humans are most important and as if those
in control (the winners) need to change their world view to save the victims.
I think the world view needs to zoom out to a perspective that recognises
that everything is interdependent and that the apparent winners and the
strong are as much victims of their limited world view as those who are
manifesting the effects of it more obviously.
Here in America, we have reached the point at which police routinely dispatch
the mentally ill, while complaining that "we don't have the time for this"
(N. Carolina). When a policeman refuses to kill a troubled citizen, he or
she can and will be fired from his job (West Virginia). This has become
not merely commonplace, but actually a part of the social function of the
work of the police -- to remove from society the burden of caring for the
mentally ill by killing them. In the state where I live, a state trooper
shot dead a mentally ill man who was not only unarmed, but sitting on the
toilet in his own home. The resulting "investigation" exculpated the trooper,
of course; in fact, young people are constantly told to look up to the police.
Sounds like the inevitable logical outcome of a society where the predator
sociopathic and their scared prey are all that is allowed.
This dynamic dualistic tautology, the slavish terrorised to sleep and bullying
narcissistic individual, will always join together to protect their sick
worldview by pathologising anything that will threaten their hegemony of
power abuse: compassion, sensitivity, moral conscience, altruism and the
immediate effects of the ruthless social effacement or punishment of the
same ie human suffering.
The impact of increasing alienation on individual mental health has been
known about and discussed for a long time.
When looking at a way forward, the following article is interesting:
"Alienation, in all areas, has reached unprecedented heights; the social
machinery for deluding consciousnesses in the interest of the ruling class
has been perfected as never before. The media are loaded with upscale advertising
identifying sophistication with speciousness. Television, in constant use,
obliterates the concept under the image and permanently feeds a baseless
credulity for events and history. Against the will of many students, school
doesn't develop the highly cultivated critical capacities that a real sovereignty
of the people would require. And so on.
The ordinary citizen thus lives
in an incredibly deceiving reality. Perhaps this explains the tremendous
and persistent gap between the burgeoning of motives to struggle, and the
paucity of actual combatants. The contrary would be a miracle. Thus the
considerable importance of what I call the struggle for representation:
at every moment, in every area, to expose the deception and bring to light,
in the simplicity of form which only real theoretical penetration makes
possible, the processes in which the false-appearances, real and imagined,
originate, and this way, to form the vigilant consciousness, placing our
image of reality back on its feet and reopening paths to action."
For the global epidemic of abusive, effacing homogenisation of human intellectual
exchange and violent hyper-sexualisation of all culture, I blame the US
Freudian PR guru Edward Bernays and his puritan forebears - alot.
Thanks for proving that Anomie is a far more sensible theory than Dialectical
Materialistic claptrap that was used back in the 80s to terrorize the millions
of serfs living under the Jack boot of Leninist Iron curtain.
There's no question - neoliberalism has been wrenching society apart.
It's not as if the prime movers of this ideology were unaware of the likely
outcome viz. "there is no such thing as society" (Thatcher). Actually in
retrospect the whole zeitgeist from the late 70s emphasised the atomised
individual separated from the whole. Dawkins' "The Selfish Gene" (1976)
may have been influential in creating that climate.
Anyway, the wheel has turned thank goodness. We are becoming wiser and
understanding that "ecology" doesn't just refer to our relationship with
the natural world but also, closer to home, our relationship with each other.
The Communist manifesto makes the same complaint in 1848. The wheel has
not turned, it is still grinding down workers after 150 years. We are none
the wiser.
"The wheel is turning and you can't slow down,
You can't let go and you can't hold on,
You can't go back and you can't stand still,
If the thunder don't get you then the lightning will."
R Hunter
What is loneliness? I love my own company and I love walking in nature and
listening to relaxation music off you tube and reading books from the library.
That is all free. When I fancied a change of scene, I volunteered at my
local art gallery.
Mental health issues are not all down to loneliness. Indeed, other people
can be a massive stress factor, whether it is a narcissistic parent, a bullying
spouse or sibling, or an unreasonable boss at work.
I'm on the internet far too much and often feel the need to detox from
it and get back to a more natural life, away from technology. The 24/7 news
culture and selfie obsessed society is a lot to blame for social disconnect.
The current economic climate is also to blame, if housing and job security
are a problem for individuals as money worries are a huge factor of stress.
The idea of not having any goal for the future can trigger depressive thoughts.
I have to say, I've been happier since I don't have such unrealistic
expectations of what 'success is'. I rarely get that foreign holiday or
new wardrobe of clothes and my mobile phone is archaic. The pressure that
society puts on us to have all these things- and get in debt for them is
not good. The obsession with economic growth at all costs is also stupid,
as the numbers don't necessarily mean better wealth, health or happiness.
Very fine article, as usual from George, until right at the end he says:
This does not require a policy response.
But it does. It requires abandonment of neoliberalism as the means used
to run the world. People talk about the dangers of man made computers usurping
their makers but mankind has, it seems, already allowed itself to become
enslaved. This has not been achieved by physical dependence upon machines
but by intellectual enslavement to an ideology.
A very good "Opinion" by George Monbiot one of the best I have seen on this
Guardian blog page.
I would add that the basic concepts of the Neoliberal New world order are
fundamentally Evil, from the control of world population through supporting
of strife starvation and war to financial inducements of persons in positions
of power. Let us not forget the training of our younger members of our society
who have been induced to a slavish love of technology. Many other areas
of human life are also under attack from the Neoliberal, even the very air
we breathe, and the earth we stand upon.
The Amish have understood for 300 years that technology could have a negative
effect on society and decided to limit its effects. I greatly admire their
approach. Neal Stephenson's recent novel Seveneves coined the term Amistics
for the practice of assessing and limiting the impact of tech. We need a
Minister for Amistics in the government. Wired magazine did two features
on the Amish use of telephones which are quite insightful.
If we go back to 1848, we also find Marx and Engels, in the Communist
Manifesto, complaining about the way that the first free-market capitalism
(the original liberalism) was destroying communities and families by forcing
workers to move to where the factories were being built, and by forcing
women and children into (very) low paid work. 150 years later, after many
generations of this, combined with the destruction of work in the North,
the result is widespread mental illness. But a few people are really rich
now, so that's all right, eh?
Social media is ersatz community. It's like eating grass: filling, but
not nourishing.
Young people are greatly harmed by not being able to see a clear path forward
in the world. For most people, our basic needs are a secure job, somewhere
secure and affordable to live, and a decent social environment in terms
of public services and facilities. Unfortunately, all these things are sliding
further out of reach for young people in the UK, and they know this. Many
already live with insecure housing where their family could have to move
at a month or two's notice.
Our whole economic system needs to be built around providing these basic
securities for people. Neoliberalism = insecure jobs, insecure housing and
poor public services, because these are the end result of its extreme free
market ideology.
I agree with this 100%. Social isolation makes us unhappy. We have a false
sense of what makes us unhappy - that success or wealth will enlighten or
liberate us. What makes us happy is social connection. Good friendships,
good relationships, being part of community that you contribute to. Go to
some of the poorest countries in the world and you may meet happy people
there, tell them about life in rich countries, and say that some people
there are unhappy. They won't believe you. We do need to change our worldview,
because misery is a real problem in many countries.
It is tempting to see the world before Thatcherism, which is what most English
writers mean when they talk about neo-liberalism, as an idyll, but it simply
wasn't.
The great difficulty with capitalism is that while it is in many ways
an amoral doctrine, it goes hand in hand with personal freedom. Socialism
is moral in its concern for the poorest, but then it places limits on personal
freedom and choice. That's the price people pay for the emphasis on community,
rather than the individual.
Close communities can be a bar on personal freedom and have little tolerance
for people who deviate from the norm. In doing that, they can entrench loneliness.
This happened, and to some extent is still happening, in the working
class communities which we typically describe as 'being destroyed by Thatcher'.
It's happening in close-knit Muslim communities now.
I'm not attempting to vindicate Thatcherism, I'm just saying there's
a pay-off with any model of society. George Monbiot's concerns are actually
part of a long tradition - Oliver Goldsmith's Deserted Village (1770) chimes
with his thinking, as does DH Lawrence's Lady Chatterley's Lover.
The kind of personal freedom that you say goes hand in hand with capitalism
is an illusion for the majority of people. It holds up the prospect of that
kind of freedom, but only a minority get access to it. For most, it is necessary
to submit yourself to a form of being yoked, in terms of the daily grind
which places limits on what you can then do, as the latter depends hugely
on money. The idea that most people are "free" to buy the house they want,
private education, etc., not to mention whether they can afford the many
other things they are told will make them happy, is a very bad joke. Hunter-gatherers
have more real freedom than we do. Share
According to Wiki: 'Neoliberalism refers primarily to the 20th century resurgence
of 19th century ideas associated with laissez-faire economic liberalism.
These include extensive economic liberalization policies such as privatization,
fiscal austerity, deregulation, free trade, and reductions in government
spending in order to enhance the role of the private sector in the economy.'
We grow into fear - the stress of exams and their certain meanings; the
lower wages, longer hours, and fewer rights at work; the certainty of debt
with ever greater mortgages; the terror of benefit cuts combined with rent
increases.
If we're forever afraid, we'll cling to whatever life raft presents.
It's a demeaning way to live, but it serves the Market better than having
a free, reasonably paid, secure workforce, broadly educated and properly
housed, with rights.
Insightful analysis... George quite rightly pinpoints the isolating effects of modern society
and technology and the impact on the quality of our relationships. The obvious question is how can we offset these trends and does the government
care enough to do anything about them?
It strikes me that one of the major problems is that [young] people have
been left to their own devices in terms of their consumption of messages
from Social and Mass online Media - analogous to leaving your kids in front
of a video in lieu of a parental care or a babysitter. In traditional society
- the messages provided by Society were filtered by family contact and real
peer interaction - and a clear picture of the limited value of the media
was propogated by teachers and clerics. Now young and older people alike
are left to make their own judgments and we cannot be surprised when they
extract negative messages around body image, wealth and social expectations
and social and sexual norms from these channels. It's inevitable that this
will create a boundary free landscape where insecurity, self-loathing and
ultimately mental illness will prosper.
I'm not a traditionalist in any way but there has to be a role for teachers
and parents in mediating these messages and presenting the context for analysing
what is being said in a healthy way. I think this kind of Personal Esteem
and Life Skills education should be part of the core curriculum in all schools.
Our continued focus on basic academic skills just does not prepare young
people for the real world of judgementalism, superficiality and cliques
and if anything dealing with these issues are core life skills.
We can't reverse the fact that media and modern society is changing but
we can prepare people for the impact which it can have on their lives.
A politician's answer.
X is a problem. Someone else, in your comment it will be teachers that have
to sort it out. Problems in society are not solved by having a one hour
a week class on "self esteem". In fact self-esteem and self-worth comes
from the things you do. Taking kids away from their academic/cultural studies
reduces this. This is a problem in society. What can society as a
whole do to solve it and what are YOU prepared to contribute.
Rather difficult to do when their parents are Thatchers children and buy
into the whole celebrity, you are what you own lifestyle too....and teachers
are far too busy filling out all the paperwork that shows they've met their
targets to find time to teach a person centred course on self-esteem to
a class of 30 teenagers.
I think we should just continue to be selfish and self-serving, sneering
and despising anyone less fortunate than ourselves, look up to and try to
emulate the shallow, vacuous lifestyle of the non-entity celebrity, consume
the Earth's natural resources whilst poisoning the planet and the people,
destroy any non-contributing indigenous peoples and finally set off all
our nuclear arsenals in a smug-faced global firework display to demonstrate
our high level of intelligence and humanity. Surely, that's what we all
want? Who cares? So let's just carry on with business as usual!
Neoliberalism is the bastard child of globalization which in effect is Americanization.
The basic premise is the individual is totally reliant on the corporate
world state aided by a process of fear inducing mechanisms, pharmacology
is one of the tools.
No community no creativity no free thinking. Poded sealed and cling filmed
a quasi existence.
Having grown up during the Thatcher years, I entirely agree that neoliberalism
has divided society by promoting individual self-optimisation at the expensive
of everyone else.
What's the solution? Well if neoliberalism is the root cause, we need
a systematic change, which is a problem considering there is no alternative
right now. We can however, get active in rebuilding communities and I am
encouraged by George Monbiot's work here.
My approach is to get out and join organizations working toward system
change. 350.org is a good example. Get involved.
we live in a narcissistic and ego driven world that dehumanises everyone.
we have an individual and collective crisis of the soul. it is our false
perception of ourselves that creates a disconnection from who we really
are that causes loneliness.
I agree. This article explains why it is a perfectly normal reaction to
the world we are currently living in. It goes as far as to suggest that
if you do not feel depressed at the state of our world there's something
wrong with you ;-) http://upliftconnect.com/mutiny-of-the-soul/
Surely there is a more straightforward possible explanation for increasing
incidence of "unhapiness"?
Quite simply, a century of gradually increasing general living standards
in the West have lifted the masses up Maslows higiene hierarchy of needs,
to where the masses now have largely only the unfulfilled self esteem needs
that used to be the preserve of a small, middle class minority (rather than
the unfulfilled survival, security and social needs of previous generations)
If so - this is good. This is progress. We just need to get them up another
rung to self fulfillment (the current concern of the flourishing upper middle
classes).
Maslow's hierarchy of needs was not about material goods. One could be poor
and still fulfill all his criteria and be fully realised. You have missed
the point entirely.
Error.... Who mentioned material goods? I think you have not so much "missed
the point" as "made your own one up" .
And while agreed that you could, in theory, be poor and meet all of your
needs (in fact the very point of the analysis is that money, of itself,
isn't what people "need") the reality of the structure of a western capitalist
society means that a certain level of affluence is almost certainly a prerequisite
for meeting most of those needs simply because food and shelter at the bottom
end and, say, education and training at the top end of self fulfillment
all have to be purchased. Share
Also note that just because a majority of people are now so far up the
hierarchy
does in no way negate an argument that corporations haven't also noticed
this and target advertising appropriately to exploit it (and maybe we need
to talk about that)
It just means that it's lazy thinking to presume we are in some way "sliding
backwards" socially, rather than needing to just keep pushing through this
adversity through to the summit.
I have to admit it does really stick in my craw a bit hearing millenials
moan about how they may never get to *own* a really *nice* house while their
grandparents are still alive who didn't even get the right to finish school
and had to share a bed with their siblings.
There is no such thing as a free-market society. Your society of 'self-interest'
is really a state supported oligarchy. If you really want to live in a society
where there is literally no state and a more or less open market try Somalia
or a Latin American city run by drug lords - but even then there are hierarchies,
state involvement, militias.
What you are arguing for is a system (for that is what it is) that demands
everyone compete with one another. It is not free, or liberal, or democratic,
or libertarian. It is designed to oppress, control, exploit and degrade
human beings. This kind of corporatism in which everyone is supposed to
serve the God of the market is, ironically, quite Stalinist. Furthermore,
a society in which people are encouraged to be narrowly selfish is just
plain uncivilized. Since when have sociopathy and barbarism been something
to aspire to?
George, you are right, of course. The burning question, however, is not
'Is our current social set-up making us ill' (it certainly is), but 'Is
there a healthier alternative?' What form of society would make us less
ill? Socialism and egalatarianism, wherever they are tried, tend to lead
to their own set of mental-illness-inducing problems, chiefly to do with
thwarted opportunity, inability to thrive, and constraints on individual
freedom. The sharing, caring society is no more the answer than the brutally
individualistic one. You may argue that what is needed is a balance between
the two, but that is broadly what we have already. It ain't perfect, but
it's a lot better than any of the alternatives.
We certainly do NOT at present have a balance between the two societies...Have
you not read the article? Corporations and big business have far too much
power and control over our lives and our Gov't. The gov't does not legislate
for a real living minimum wage and expects the taxpayer to fund corporations
low wage businesses. The Minimum wage and benefit payments are sucked in
to ever increasing basic living costs leaving nothing for the human soul
aside from more work to keep body and soul together, and all the while the
underlying message being pumped at us is that we are failures if we do not
have wealth and all the accoutrements that go with it....How does that create
a healthy society?
Neoliberalism. A simple word but it does a great deal of work for people
like Monbiot.
The simple statistical data on quality of life differences between generations
is absolutely nowhere to be found in this article, nor are self-reported
findings on whether people today are happier, just as happy or less happy
than people thirty years ago. In reality quality of life and happiness indices
have generally been increasing ever since they were introduced.
It's more difficult to know if things like suicide, depression and mental
illness are actually increasing or whether it's more to do with the fact
that the number of people who are prepared to report them is increasing:
at least some of the rise in their numbers will be down to greater awareness
of said mental illness, government campaigns and a decline in associated
social stigma.
Either way, what evidence there is here isn't even sufficient to establish
that we are going through some vast mental health crisis in the first place,
never mind that said crisis is inextricably bound up with 'neoliberalism'.
Furthermore, I'm inherently suspicious of articles that manage to connect
every modern ill to the author's own political bugbear, especially if they
cherry-pick statistical findings to support their point. I'd be just as,
if not more, suspicious if it was a conservative author trying to link the
same ills to the decline in Christianity or similar. In fact, this article
reminds me very much of the sweeping claims made by right-wingers about
the allegedly destructive effects of secularism/atheism/homosexuality/video
games/South Park/The Great British Bake Off/etc...
If you're an author and you have a pet theory, and upon researching an
article you believe you see a pattern in the evidence that points towards
further confirmation of that theory, then you should step back and think
about whether said pattern is just a bit too psychologically convenient
and ideologically simple to be true. This is why people like Steven Pinker
- properly rigorous, scientifically versed writer-researchers - do the work
they do in systematically sifting through the sociological and historical
data: because your mind is often actively trying to convince you to believe
that neoliberalism causes suicide and depression, or, if you're a similarly
intellectually lazy right-winger, homosexuality leads to gang violence and
the flooding of(bafflingly, overwhelmingly heterosexual) parts of America.
I see no sign that Monbiot is interested in testing his belief in his
central claim and as a result this article is essentially worthless except
as an example of a certain kind of political rhetoric.
social isolation is strongly associated with depression, suicide,
anxiety, insomnia, fear and the perception of threat .... Dementia,
high blood pressure, heart disease, strokes, lowered resistance to viruses,
even accidents are more common among chronically lonely people.
Loneliness has a comparable impact on physical health to smoking
15 cigarettes a day:
it appears to raise the risk of early death by 26%
Why don't we explore some of the benefits?.. Following the long
list of some the diseases, loneliness can inflict on individuals, there
must be a surge in demand for all sort of medications; anti-depressants
must be topping the list. There is a host many other anti-stress treatments
available of which Big Pharma must be carving the lion's share. Examine
the micro-economic impact immediately following a split or divorce. There
is an instant doubling on the demand for accommodation, instant doubling
on the demand for electrical and household items among many other products
and services. But the icing on the cake and what is really most critical
for Neoliberalism must be this: With the morale barometer hitting
the bottom, people will be less likely to think of a better future, and
therefore, less likely to protest. In fact, there is nothing left worth
protecting.
Your freedom has been curtailed. Your rights are evaporating in front
of your eyes. And Best of all, from the authorities' perspective, there
is no relationship to defend and there is no family to protect. If you have
a job, you want to keep, you must prove your worthiness every day to 'a
company'.
"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."
"... By Thom Hartmann. a talk-show host and author of over 25 books in print.. Originally published at AlterNet . ..."
"... 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. ..."
"... 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. ..."
"... "And anything that would make somebody not want to move here or start a company here is going to slow down our progress." ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... The author fails to point out that H1-B is also indentured servitude. ..."
"... 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. ..."
"... The US is definitely getting more feudal. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
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."
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.
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.
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.
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).
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).
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.
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.
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.
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.
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.
"
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.
"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
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.
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.
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.
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.
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..
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:
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."
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.
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.
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.
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.
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.
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.
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, but
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.
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.
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.
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.
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.
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.
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 view
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.
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.
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.
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.
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.
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).
"... 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. ..."
"... See original post for references ..."
"... "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." ..."
By 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
[Imports(CIF)/Exports(FoB]-1
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.
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 .
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."
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.
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 persons
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.
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.
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'.
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.
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.
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?
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.
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.
(Ricardo 1817)
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.
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!
Sad reality:
The CAPITAL is mobile but the LABOR is NOT!
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
"... some one ought to do a study of/ a book on generic management ..."
"... 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. ..."
"... 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. ..."
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!
"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.
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.
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.
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.
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.
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.
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.
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.
"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.
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.
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.
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.
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 riders
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.
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.
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.
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
:(
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.
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.
"... "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 ?" ..."
"... 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. ..."
"... ' 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. ..."
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 .
Next,
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 Marketing
Her 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
Furthermore,
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
Early on,
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 in
range.'
Also, 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].
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 Well
We 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.
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.'
Regardless, the division failed to reach its real goal, expansion of its business.
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 that
In 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 Contributions
McMaster 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 Virginia
In 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 an
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.
Also,
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.'
Summary
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.
Great post - clarifies why I am seeing the increasingly generic promotion/fund-raising communication
"relationships" from many non-profit and advocacy groups lately. -Paul Rowan
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.
"'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:
Researchers 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.
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.
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.
Seattle's Minimum Wage Experience 2015-16
By Michael Reich, Sylvia Allegretto, and Anna Godoey
Abstract
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.
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....
Real Labor Productivity increases can be the result of
increased work intensity
Shrewd redesign of tasks
Or
Use of additional or better technical systems
[Taxes may go up but lower costs than private insurance could give many people a net savings.]
............
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.
"... 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. ..."
"... 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. ..."
"... 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? ..."
"... "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. ..."
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. ...
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.
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.
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.
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
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.
[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?
"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.]
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.
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?
[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. ]
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.
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)?
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.
"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. ...
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....
William
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.
"... 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. ..."
"... 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. ..."
"... 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 ..."
"... 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. ..."
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.
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.
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.
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
Posted 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 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.
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.
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.
Authors' Summary
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.
My Summary
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.
Reference
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
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.
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.)
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.
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.
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.
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.
'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.
'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'
'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'
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.
Start here:
https://kenhoma.wordpress.com/2014/04/30/how-many-mba-degrees-are-awarded-each-year/
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.
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.
How well?
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?
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.
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.
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.
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 art business 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.
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."
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.
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.
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?!
"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.
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?
"... 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.... ..."
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....
The time for rhetorical reservations is over. Things have to be called by their name to make it
possible for a co-ordinated democratic reaction to be initiated, above all in the public services.
Liberalism was a doctrine derived from the philosophy of Enlightenment, at once political and
economic, which aimed at imposing on the state the necessary distance for ensuring respect for liberties
and the coming of democratic emancipation. It was the motor for the arrival, and the continuing progress,
of Western democracies.
Neoliberalism is a form of economism in our day that strikes at every moment at every sector of
our community. It is a form of extremism.
Fascism may be defined as the subordination of every part of the State to a totalitarian and nihilistic
ideology.
I argue that neoliberalism is a species of fascism because the economy has brought under subjection
not only the government of democratic countries but also every aspect of our thought.
The state is now at the disposal of the economy and of finance, which treat it as a subordinate
and lord over it to an extent that puts the common good in jeopardy.
The austerity that is demanded by the financial milieu has become a supreme value, replacing politics.
Saving money precludes pursuing any other public objective. It is reaching the point where claims
are being made that the principle of budgetary orthodoxy should be included in state constitutions.
A mockery is being made of the notion of public service.
The nihilism that results from this makes possible the dismissal of universalism and the most
evident humanistic values: solidarity, fraternity, integration and respect for all and for differences.
There is no place any more even for classical economic theory: work was formerly an element in
demand, and to that extent there was respect for workers; international finance has made of it a
mere adjustment variable.
Every totalitarianism starts as distortion of language, as in the novel by George Orwell. Neoliberalism
has its Newspeak and strategies of communication that enable it to deform reality. In this spirit,
every budgetary cut is represented as an instance of modernization of the sectors concerned. If some
of the most deprived are no longer reimbursed for medical expenses and so stop visiting the dentist,
this is modernization of social security in action!
Abstraction predominates in public discussion so as to occlude the implications for human beings.
Thus, in relation to migrants, it is imperative that the need for hosting them does not lead to
public appeals that our finances could not accommodate. Is it In the same way that other individuals
qualify for assistance out of considerations of national solidarity?
The cult of evaluation
Social Darwinism predominates, assigning the most stringent performance requirements to everyone
and everything: to be weak is to fail. The foundations of our culture are overturned: every humanist
premise is disqualified or demonetized because neoliberalism has the monopoly of rationality and
realism. Margaret Thatcher said it in 1985:
There is no alternative."
Everything else is utopianism, unreason and regression. The virtue of debate and conflicting perspectives
are discredited because history is ruled by necessity.
This subculture harbours an existential threat of its own: shortcomings of performance condemn
one to disappearance while at the same time everyone is charged with inefficiency and obliged to
justify everything. Trust is broken. Evaluation reigns, and with it the bureaucracy which imposes
definition and research of a plethora of targets, and indicators with which one must comply. Creativity
and the critical spirit are stifled by management. And everyone is beating his breast about the wastage
and inertia of which he is guilty.
The neglect of justice
The neoliberal ideology generates a normativity that competes with the laws of parliament. The
democratic power of law is compromised. Given that they represent a concrete embodiment of liberty
and emancipation, and given the potential to prevent abuse that they impose, laws and procedures
have begun to look like obstacles.
The power of the judiciary, which has the ability to oppose the will of the ruling circles, must
also be checkmated. The Belgian judicial system is in any case underfunded. In 2015 it came last
in a European ranking that included all states located between the Atlantic and the Urals. In two
years the government has managed to take away the independence given to it under the Constitution
so that it can play the counterbalancing role citizens expect of it. The aim of this undertaking
is clearly that there should no longer be justice in Belgium.
A caste above the Many
But the dominant class doesn't prescribe for itself the same medicine it wants to see ordinary
citizens taking: well-ordered austerity begins with others. The economist Thomas Piketty has perfectly
described this in his study of inequality and capitalism in the twenty-first century (French edition,
Seuil, 2013).
In spite of the crisis of 2008 and the hand-wringing that followed, nothing was done to police
the financial community and submit them to the requirements of the common good. Who paid? Ordinary
people, you and me.
And while the Belgian State consented to 7 billion-euro ten-year tax breaks for multinationals,
ordinary litigants have seen surcharges imposed on access to justice (increased court fees, 21% taxation
on legal fees). From now on, to obtain redress the victims of injustice are going to have to be rich.
All this in a state where the number of public representatives breaks all international records.
In this particular area, no evaluation and no costs studies are reporting profit. One example: thirty
years after the introduction of the federal system, the provincial institutions survive. Nobody can
say what purpose they serve. Streamlining and the managerial ideology have conveniently stopped at
the gates of the political world.
The security ideal
Terrorism, this other nihilism that exposes our weakness in affirming our values, is likely to
aggravate the process by soon making it possible for all violations of our liberties, all violations
of our rights, to circumvent the powerless qualified judges, further reducing social protection for
the poor, who will be sacrificed to "the security ideal".
Salvation in commitment
These developments certainly threaten the foundations of our democracy, but do they condemn us
to discouragement and despair?
Certainly not. 500 years ago, at the height of the defeats that brought down most Italian states
with the imposition of foreign occupation for more than three centuries, Niccolo Machiavelli urged
virtuous men to defy fate and stand up against the adversity of the times, to prefer action and daring
to caution. The more tragic the situation, the more it necessitates action and the refusal to "give
up" (The Prince, Chapters XXV and XXVI).
This is a teaching that is clearly required today. The determination of citizens attached to the
radical of democratic values is an invaluable resource which has not yet revealed, at least in Belgium,
its driving potential and power to change what is presented as inevitable. Through social networking
and the power of the written word, everyone can now become involved, particularly when it comes to
public services, universities, the student world, the judiciary and the Bar, in bringing the common
good and social justice into the heart of public debate and the administration of the state and the
community.
Neoliberalism is a species of fascism. It must be fought and humanism fully restored.
AS an Amerikan the term neoliberal has a different impact I believe than it does in the context
of European use of the word. Could someone give a succinct definition of what the term means in
the context of European parlance.
I too have found this article and discussion incredibly interesting and enlightening, especially
in light of the potential nightmare of our next four years here in the states.
These same neo-fascists work with the NEOCON Party on the side of so-called Conservatives to pursue
Globalist repression, waste and population reduction genocide. In this way they keep both Conservative
and Liberal parties COVERED and dominated by Globalist dogma. To hell with Equity, Justice or
Fairness.
Funny how many critics of neo-liberalism are fascists such as Le Pen. That's because to be a fascist
is to be a nationalist and to believe in strong national governments. Neo-liberalism in contrast
supports the transfer of power to supra-national entities. The fascist economy is a mixed economy
with the national government able to exert immense power over the conduct of private business.
Neo-liberalism in contrast expects national governments to have no influence over private business.
The word 'Fascism' comes from 'fascio' in Italian meaning bundle or sheaf. If 'Fascism' as
a word is to have a meaning, it is to describe Italy under Mussolini. To use the same word to
describe 21st century globalisation is to negate the word's meaning.
A very good point, as, strictly speaking, by those terms, we should refer to neo-liberalism as
a transnational plutocracy, or at least that appears to be where it's heading. However for many
people, increasingly robbed of democracy and being bled dry, down at the sharp end of things,
there is little difference between the two systems in practice. Furthermore, the term Fascism
has long since passed into common parlance, to be widely viewed by many as simply anti-democratic
and supportive of a totalitarian regime, sometimes with nationalistic, or even racist connotations.
In this instance, you are very right to point out that neo-liberalism is neither racist, nor nationalistic
in nature, though it does, if left unchecked, lead to an hegemony of international moneyed interests
over the affairs and government of nation states, so we can at least say that it is anti-democratic
and supportive of totalitarianism (in this case, a plutocracy). I guess most of us do tend to
use the word out of context and quite offhand, and I am as guilty as the next man, but I do think
it's always a good thing to be pulled up on such things.
An excellent and most thought provoking article. I have long thought neoliberalism to be fascism,
except I arrived at that conclusion from an economic perspective, whilst researching the foundation
and rise of neoclassical economics. Also that quote from Orwell has haunted me for quite some
time, as it was a corruption of the very language of economics that lies at the heart of that
story, which is one that played out over 100 years ago. It's a story that involves the same moneyed
interests, the same use of public relations, and the same erosion of democracy in both political
and academic institutions, simply because it is the same story, and to fully understand neoliberalism,
you have to rewind about 120 years to pinpoint the preconditions for its inception. Fortunately
most of what happened did so in plain sight and is well documented. No laws were broken, as such,
but nevertheless, arguably one of the greatest crimes against humanity was set in motion for the
most banal reasons of economic protectionism. There is a way out of the problem, but it'll take
years and an incredible effort to reform what is to all intents and purposes a predominant religion
that has become ingrained into our society.
Shadia Drury is the author of a number of books on neconservatism, including "Leo Strauss And
The American Right." It's informative is somewhat confusing in places. A few authors and famous
people (Howard Zinn, Tommy Douglas) dispense with the academic minutiae and talk about fascism
in simple terms. It's good to know history, but the object of knowing is to be enabled. Learn
not in order to know, but in order to know how to proceed.
As Douglas noted, You don't have to wear brown shirts in order to be fascist. Huey Long, a
famous, corrupt American politician (who fought the capitalist class; It happens) was asked if
America would ever see fascism. He said yes, but it won't be called fascism. Indeed. Obama et
al call it democracy, just as Hitler called his Germany democratic.
If you reduce it to something useable (for purposes of mobilizing the working class), fascism
is simply a situation where the political class and the capitalist class jointly rule, telling
the people that because they have elections and can vote they therefore have democracy and a voice
when in reality the police state robs them of that. Media complies with elites' wishes or are
shut down in the name of national security. All opinions and protests get the same treatment.
And to keep the people's attention diverted from the abusers in power, you whip up nationalism.
Neoconservatism existed before it was formulated as such. Neocons 'believe' that a nation needs
to have an enemy and be at war in order to stay strong. If there's no enemy, then one must be
created. One can see how nationalisn (which isn't) patriotism, is useful to fascist leaders. And
can see how neoconservatism is convenient to certain powerful, entrenched special interests like
the military/intelligence industrial complex.
Strauss 'believed', as did Marx, that religion is the opiate of the people, but unlike Marx,
who wasn't thinking in terms of how to manage and exploit the people, Strauss felt that the people
should be given their fix. He saw it as another mechanism of control. (I see organized religion
as being a racket, even though I am religious.)
Neoconservatism is a political philosophy and neoliberalism is one type of social economic
system and they are both sides of the same evil coin. One needn't be a student of Strauss in order
to called a neocon, which is why you often find writers referring to Hillary Clinton as one.
I'd only point out that nationalism isn't a required ingredient at all. On the contrary. Nationalism
is often what the current order fears the most. The globalists, all of them neoliberals to a man
and a woman - use the language of internationalism. It's a fascist kind of internationalism, to
be sure, but cleverly deployed and manipulated, it gives them moral credibility in the eyes of
a large segment of the population.
Agreed in spades about neo-liberalism. But let us not forget the other side of the counter-revolutionary
coin, to wit, neo-conservatism. For the western ruling elites neo-liberalism is an attack directed
on its internal enemies, the 99% and neo-conservatism is an attack on its external enemies, principally
the Russian Federation and China, but in fact anyone who doesn't toe the Pentagon, State department
line. Austerity without end at home and a creeping dismantling of democracy, and everlasting war
abroad, that is the future: a global slave empire controlled through the Washington, Brussels,
London, Tel Aviv axis of evil. This is a fight to the death and the future of humanity depends
on the outcome.
WOW such a lightbulb moment. This makes my blood go into thermal nuclear boil. I have been saying
this for the last 30 years and now this quantum leap moment. I really hope we the sheeple can
wake up and really start getting all the elite to be accountable for they conspiracy. Since 1979
the west has been walking like a zombie towards fascism. Reagon and Thatcher were their front
persons . The Chicago school of economic theory.The Liberal interventionist. The helicopter money
to bail out the biggest fraud in the western financial history. Then they turn around and get
the PAYE public to bail them out. The sip[ their Champagne and eat their caviar and we live on
austerity. Hitler in drag will be the next POTUS and the MSM call Trump a xenophobic fascist when
we all know Hitlary and all her cohorts and all the western political establishment r fascist's.
That has been my point for over a quarter of a century. The use of the term democracy and veil
themselves in these hollow terms without any substance or facts is insulting at best. Putin,Xi
and Rohani have been trying now and hopefully they will prevail and once Syria settles down in
might c the dawn of a new pan -arabism which will start the century of humanism and human dynamism
for the good of all and not 64000 people. Gramsci forewarned us all from his cell in the 30's
and before him Engels as well. That is why i finish my spiel with this old journalistic quote.YESTERDAY'S
NEWS GETS WRAPPED IN TODAYS FISH. If only more humans would study and analyse history more maybe
we would not be in such a pickle.. Luv this website wish it had more pull and a following.
Yes, at least some familiarity with Wolin's concept of 'inverted totalitarianism' is absolutely
essential for understanding what is really happening in our world today. The fascism we have today
differs from the classical model in one key respect: the original fascist regimes were all of
the state-corporatist model, with an all-powerful government presiding over the banks and corporations;
our modern fascism, however, is of a new corporate-statist (and thus, according to Wolin, inverted)
variety, where the banks and the corporations completely control the state. Therefore, the age
of the Hitlers and Mussolinis–at least in the West–is over. Our so-called 'rulers' are really
nothing more than corporate executives or CEOs who serve at the leisure of a kind of hidden board
of directors, composed of those banks corporations we all know, and probably a few powerful oligarchs,
such as a the Rockefellers and the Rothschilds.
Liberal dupes, however, believe that we are still free, because they wrongly understand fascism
as an ideology (Racism! Nationalism! Xenophobia!) or else confuse it with certain systems of symbology
(swastikas, fasces, cool-looking uniforms, etc.). But in reality true fascism in neither an ideology
(false consciousness, as the Marxists would say), nor is it a particular system of symbology.
Fascism, properly understood is simply a state of affairs–namely, the total fusion of state
and corporate power. That was the definition Mussolini gave it long ago, and since he was
fascism's inventor, I'll take his word for it! The consequence of this is that fascism, in practice,
can adopt virtually any ideology or symbology, even some that might, at first glance, seem rather
'lefty'. In the west today, for example, the true fascists have now adopted cultural (not economic!)
Marxism as their ideology.
Ironically then, the new fascism has cleverly disguised itself as anti-fascism! Pretty
slick, eh?
Spot on Mussolini is the father of modern fascism , historically speaking fuedalism was an older
form of fascism. With the birth of industrial capitalism and nouveau bourgeoisie was the beginning
of modern day fascism. Mussolini from returning from the WW1 and being shun by fellow socialist
and the new founded Gramscian movement decided to form his own party. He was always into grandiosity
and ancient empire mythology. Most of the socialist including Gramsci did not support the WW1
they all identified it as the bankers war . Many leftist of the time also recognised the con job
in the USA with the rewritting the Federal reserve act of 1913 as the Private bankers taking over
the money supply of the US .
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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". ..."
"... Fake news...about a reliable as a Democrat's promise that he's for the working folks. ..."
"... 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 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.
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.
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.
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.
EPI
Even the Most Educated Workers Have Declining Wages
Feb 2015
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 USA
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.
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.
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.
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.
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".
'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!
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.
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.
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 Care
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.
While idiotic supporters of our two-party system wring their hands over the sensationalist nonsense
reported by the mainstream media, we thought it might be worth touching on the most dangerous lie
of all-time: neoliberalism. It's an all-encompassing delusion, including: the myth of continual technological
progress, the mendacious assumptions of endless economic growth, the lie that constant bombardments
of media and consumer goods make us happy, and the omissions of our involvement in the exploitation
of the planet and the resources of distant, poorer nations, among other things.
We've taken the time to hash out some of the most pernicious mendacities we've come across in
our (relatively) young lives, in the workplace, in our private lives, and in the media. ***
Please share these counter-arguments far and wide, in order to educate your fellow citizens, and,
if necessary, to provide the intellectual beat-downs needed when arguing with pro-neoliberals. So
without further ado, here is our list of the most devious "Lies that Neoliberals Tell Us":
1) Wealth will "trickle down"
It's hard to believe an economic policy that conjures images of urination could be wrong, but
the idea is as bankrupt as the lower classes who have been subjected to the trickling. Less than
ten people now have the financial wealth equivalent to half the planet, and the trickling seems a
lot more like a mad cash-grab by the (morally bankrupt) elites. Rather than trickle down, the 1%
and their lackeys have hoovered up the majority of new wealth created since the 2008 crash. After
40 years of stagnant wages in the US the people feel more shit on than trickled upon.
It's not a mistake that the elite reap most of the profits: the capitalist system is designed
this way, it always has been, and will be, until we the people find the courage to tear it down and
replace it with something better.
2) I took all the risks
It can be argued the average employee takes far more risks in any job than the average person
who starts a business with employees. The reason being is that the person starting a business usually
has far more wealth, where most
Americans can't afford a 500 dollar emergency. Meaning if they lose a job or go without work
for any stretch it means some tough decisions have to be made. A person with even a failing business
cannot be fired, but the employee can be fired for almost any reason imaginable, they are operating
without a net at all times.
The neoliberalism uses all sorts of public infrastructure to get his/her company off the ground.
From everything to the roads to get you to your job, colleges, public utilities, tax breaks, electricity,
etc. Even the internet itself was created from public research. Yet still, elite business owners
still have the audacity, and are so full of hubris, that they believe in the hyper-individualist,
macho, rugged-cowboy/pioneer façade they affect.
3) I could pay you more if there were less government regulations
Many neoliberals argue that layers of government bureaucracy prevent them from paying their employees
a fairer, living wage. This is a huge whopper, as our regulations (like no child labor, a minimum
wage, disability and worker's compensation, basic environmental impact studies, etc) actually provide
safety against the worst type of exploitation of workers and destruction of the land by corporations.
Without these minimum regulations, an age of even more outright neo-feudalism would occur, where
employees could be layed-off and rehired ad-infinitum, based on downward market wage forces, at the
wishes of ever-more capricious owners, management, and CEOs.
4) If you work hard, one day you can be rich like us (We live in a meritocracy)
America is not a meritocracy, and no one should think it is. There exists no tie to the intelligence
of work done or the amount of it that guarantees success. Rather to be rich depends more on either
being born into it, or being exceptionally good at exploiting others so one may take the bulk of
the proceeds for themselves. This is the magic formula for wealth in this ever so "exceptional" land
– exploit, exploit, exploit.
Inheritance & exploitation is how the rich get rich. To understand the exploitation aspect takes
some understanding of how the rich function. Next to none of the super rich become that way solely
by meritocracy. Their income is created through complex webs of utilizing leverage usually to extract
some form of passive income. They are the rentier class or con artists, or both.
Or take Bill Gates, who did some programming for a few years, poorly, and became rich by landing
a series of deals with IBM initially, and then by passively making money off the share values of
Microsoft. The late Steve Jobs may have been one of the more hands-on billionaires, but even he
required thousands of enslaved asian hands to extract the kind profits Apple was able to make.
Casino magnate Sheldon Adelson almost certainly has
organized crime links , as if owning a casino wasn't enough of a con to begin with.
Rich DeVos became a billionaire by running a pyramid scheme most are familiar with called Amway.
The Walton family, owners of Wal-Mart, pays a median wage of 10 bucks an hour (far below a living
wage), they strong arm vendors, and also rely on products made with working conditions that resemble
old world slavery, while having more wealth than the bottom 40% of Americans.
There's just no way to make that kind of money without having a major market advantage and then
profiteering off it. Lie, cajole, coerce, manipulate, bribe, rig, and hustle. These are the tools
of the rich.
No one is worth this kind of money and everyone needs each other's help to function, but in the
minds of the rich they consider themselves the primary cogs in the machine worthy of their money
for doing not much else than holding leverage over others and exploiting it.
5) This is as good as it gets (there is no alternative, TINA)
Through a process of gaslighting and double bind coercion the choices we are fed are propagandized
via controlled media outlets owned and operated by elites. We are told our choices must be between
the democrats or republicans, attacking the Middle East or face constant terrorism, unfettered neoliberalism
or state run communism. We are given binary choices that lack all nuance, and nuance is the enemy
of all those who seek to control and exploit. They feed us a tautology of simpleton narratives which
unfortunately do exactly what they hoped, keep people dumb and biting on their red herrings.
Neoliberals make it seems as if there is no alternative because they hoard all the money, have
all the hired guns, and pay off teams of servile lawyers, judges, and lobbyists to write and enforce
their anti-life laws. Neoliberals demand "law and order" whenever their servant classes get too restless.
In general, the most hardened, dogmatic neoliberals exhibit bewilderment and/or disgust at genuine
human emotions like joy, creativity, spontaneity, and love. Many neoliberals have an unconscious
death wish, and want to drag the rest of us and the mother Earth down with them.
Neoliberals have stolen all the farmlands, hold all the patents to technology, and don't pay enough
to mass amounts of citizens to get out of the rat race and get back to the land, to live off of.
The screws are turned a little tighter every year. If we are not done in by massive natural disasters
or an economic collapse, expect a revolution to occur, hopefully a non-violent one.
6) We give back to the community
Corporations set out to create non-profits as a public relations move. They cause the problems
and then put small band-aids on the gaping wounds they have directly contributed to and use the charity
as a source of plausible deniability to obscure the fact that they are exactly what we think they
are: greedy.
Handing out bread-crumbs after you've despoiled, desecrated, and bulldozed millions of hectares
of valuable habitat is not fooling anyone. The elite one-percenters are the enemies of humankind
and the biosphere itself.
7) The system (and economic theory) is rational and takes into account social and environmental
costs
People tend to think someone somewhere is regulating things to keep us safe. They look around
and see sophisticated technology, gleaming towers in the sky, and what they believe to be is a complex
intelligent world. But in truth no one is running the show. The world functions as a mad cash grab
driven by neo-liberal ideology. Our leaders are driven by power, fame, and money, and exhibit strong
psychopathic, sociopathic, and narcissistic traits.
The problems of modern neoliberalism and its impact on the world is clear – our exploitation of
the resources, people, and other species are a direct result of our consumer based infinite growth
model. Just a few of the problems we face are species extinction, climate change, ocean acidification,
and a toxic carcinogen filled trash dump of a planet that reached population overshoot decades ago.
If the system was rational, we would begin planning to lower birth rates to decrease the world's
population, and voluntarily provide education, decent, dignified jobs, as well as birth control and
contraception to women worldwide.
We live by money values, and think in money terminology. When we discuss healthcare the topic
arises about how to pay for it before nearly anything else. The priority isn't on saving lives but
how to pay for things. Yes, how will we pay for healthcare when banks can create money on a computer
through the magic of fractional reserve banking, which they often use to
bail out their crony friends . The money isn't real but the implications of restricting it from
the populace are. Money is created out of thin air by the magic of the Federal Reserve, yet we have
all heard our bosses, and the pricks in Washington complaining that "we don't have enough money for
that" when it comes to healthcare, improving schools, and humanitarian relief for the poorest parts
of the world.
Again, if the system was rational, world poverty would be solved within a few short years. Money
destined for weapons and "defense" could be used domestically as well as abroad to Africa, South
Asia, and Latin America, and there is more than enough money (75 trillion is the annual world GDP,
approximately 15 trillion in the US alone) to pay for a good home, clothing, and food for every family
worldwide, with an all-renewable powered energy grid.
8) The future will be better
When Trump's slogan make America great again was on the lips of every alt-right fascist, most
of us stopped to ask, when was it great? The truth is that politicians have been promising something
better since the inception of this country and better has never arrived.
There is always another expensive war to fight and another financial meltdown occurring on average
every eight years. Wait, you might say, what about those sweet post-WWII growth years brought about
by the New Deal? The sad truth is those years were only materially beneficial to white, middle-class
men, who were highly sexist, racist, and complicit in incubating today's consumer-driven
Empty Society
.
The post-WWII era was an aberration in our history and the result of having more jobs available
than people, but as the country rapidly exploited its natural resources and reached the limits of
linear growth while the population exploded the leverage that allowed people to have higher wages
receded. Even though efficiency increased enormously, the people lost leverage to demand higher wages.
Without leverage held by the people neoliberalism will return to its status quo goal – exploit,
and that's just what it did. In the US, corporations grew richer and the people grew poorer starting
from the mid 1970s to the present.
9) It's Just Business
Employees devote years of their lives to companies and when they are let go they are told it's
nothing personal, it's just business. This is how all bad news is delivered even when personal, it's
says we are cold-hearted organizations that adhere to a bottom line first and human needs second.
So know when they say "it's just business" what they are saying is understand we are sharks, and
acting like a shark is just what we do.
This is also the logic behind defending war crimes and similar atrocities. Nations like the US
claim they have a "responsibility to protect" civilians from terrorists. Then, when American bombs
kill civilians (or their proxies use US-made weapons), they are referred to as "collateral damage".
10) Financial markets & debt are necessary
The health of the entire economy is too often gauged by the stock markets. But the reality about
financial markets is they are extraneous gambling machines designed to place downward pressure on
companies to post good numbers to elevate share prices. These financial markets funnel capital to
a smaller and smaller number of multinational corporations every year, and perpetuate non-linear
economic growth (and therefore more pollutants, CO2, pesticides, strip mining, razing of forests)
that is killing the planet.
Debt is the most fundamental lie in our economy. Money is only supposed to be a tool to move goods
efficiently around a market, but for money itself to be a wealth engine is a Ponzi scheme. And we
all know how that ends.
*** For a wider taste of our oeuvre, visit
Reason
Bowl Radio to watch Jason expose the Trump administration for the sorry sacks of shit that they
are and discuss current events, as well as Jason and Bill's commentary and ramblings about topics
such as psychedelics, the nature of consciousness, and reflections on how to effect social change.
"... 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. ..."
"... 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 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.
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!
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!
Crocodile tears of WaPO staff... Who fully supported implementation of Washington consensus that
robbed the nations in favor of international companies... this was a new mass scale economic rape of
the Western countries and it was especially brutal in xUSSR area.
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.
"... "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 ..."
"... Safety nets are not necessary if opportunity provides alternatives. More jobs more hours ..."
"... And instead we curb the jobs and hours expansion rate because we refuse to socialize even in part the pricing mechanism ..."
"... 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 ..."
"... 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 passed ..."
"... Well 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? ..."
I hate the the use of word "THE POOR " by liberal politicians It's like deplorable It's an insult
"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 happiness
Most 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.
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.
Well 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?
"... "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." ..."
"... 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). ..."
"... 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. ..."
"... 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. ..."
"... "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." ..."
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
Krugman:
"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."
Bernstein:
"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
Krugman:
"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.[citation
needed] 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."
"Blinder: Why, After 200 Years, Can't Economists Sell Free Trade?" From yesterday.
B/C so-called 'Free Trade' favor one group over another. Fair Trade should be the basis for
'Free Trade.'
American Economists are not smart enough to comprehend the "basis" and instead focus on numbers
which are clearly skewed to favor trade and which ignore the effects on those that DO NOT gain
in such deals.
Maybe it would help if Economists thought in metaphors.
Try thinking about music. There are all sorts of genres. Within each some are great and some
are horrible, i.e., a vast variety of degrees of what is great and what is not.
"Maybe it would help if Economists thought in metaphors..."
[Essentially that is what economists already do, although the term most often used is a different
form of abstraction than a metaphor or colloquial meme. Economists think in terms of stylized
facts.]
In social sciences, especially economics, a stylized fact is a simplified presentation of an
empirical finding.[1] A stylized fact is often a broad generalization that summarizes some complicated
statistical calculations, which although essentially true may have inaccuracies in the detail...
*
[When it comes to sorting out the beneficiaries from the losers, then the common measurement
of all things economic is money. Money aggregates is what economists look at in all those stylized
facts. So, the people with the most money naturally matter more in economics.
However, the devil is in the details. Just like Bluefin tuna do not benefit from a higher price
for Bluefin tuna in the short run (nor long run either unless caused by a drastic fall in quota
and catch rather than stock depletion) and fisherman of Bluefin tuna do not benefit from a higher
price of Bluefin tuna in the long run (as they still won't make enough to save and invest adequately
to protect against fishery collapse) and sushi bars don't benefit and sushi eaters do not benefit
then maybe lose-lose is more likely than win-win in economics. But if you were an economists and
said that then you would be out of a job.
Environmental economics makes a lot more sense than monetized economics if we are worried about
the future and quality of life for everyone, but economist do not worry about the future because
"In the end we are all dead" before it becomes time to pay the environmental piper. Besides environmental
economics places much more focus on distribution than wealth and GDP, whereas monetized economics
is just the opposite. So, financialize and securitize to your heart's content because we are on
the path to global destruction.]
RE: Growth, import dependence, and war in the context of international trade
Roberto Bonfatti, Kevin O'Rourke 26 May 2017
Classical models suggest that shifts in the balance of power can lead to conflict, where the
established power has the incentive to trigger war to deter the threat to its dominance. This
column argues that this changes if international trade is taken into account. Industrialisation
requires the import of natural resources, potentially leading a smaller nation to trigger war
either against a resource-rich country or the incumbent nation. The model can help explain the
US-Japanese conflict of 1941 and Hitler's invasion of Poland, and has implications for US-Chinese
relations today...
[I am not buying into ANY of THESE narratives regarding the risks of geopolitical instability
attributable to increased levels of global economic integration, but I do really like how the
authors pose these narratives which all fly in the face of the old saw about global economic integration
ushering in a sustained period of world peace.
Indeed globalization has never stopped warring before. It did not prevent WW-I. Yes, there
was lots of world trade before container ships and the free movement of capital. Container ships
and the free movement of capital just lowered the cost of extended supply chains such that international
wage arbitrage made greater global integration profitable for owners of capital well after most
other comparative advantages of international competition had become moot.
Global economic integration via the international settlement of accounts regime under the gold
standard was a principle cause of the Great Depression which in turn greatly exacerbated "The
Economic Consequences of the Peace." The Versailles Treaty was a "Carthaginian peace" Keynes convincingly
argued and it did indeed lead to WW-II with Germany in the grips of the Great Depression fitfully
reasserting its self determination.
I do not even believe that war poses the greatest risk to geopolitical instability in the current
century. The H-bomb has done a lot to limit the severity of international hostility even if it
has done nothing to reduce the frequency since the end of the Cold War.
The role of the greatest risks to geopolitical instability in the current century I expect
to be filled by various supply side and demand side shocks delivered by the unnatural events of
Nature under its present climate change regime. Floods, draughts, typhoons, and even earthquakes
(yep - both rising ocean and melting glaciers are unsteadying the steady pressure of Earthly masses
on its tectonic plates - recipe for earthquakes second only to asteroids) all continue to be both
more frequent and more severe. In an integrated global economy any catastrophe of economic significance
in one country (or more) is not only propagated in its economic effects to all of its trading
partners around the world, but those effects become magnified as the integration between those
trading partners reverberate the effects. This is globalization's economic shock multiplier effect.
Falling tides wreck all boats. This century is still young, but fortunately enough for me that
I am not.]
It is drying up outside now after two days of rain and no one has slapped me with the other side
of this story yet. So, I will have to slap myself while I am still conveniently at hand to answer
the challenge.
If not for globalization then worldwide poverty would likely be the greatest risk to geopolitical
instability in the current century instead of climate change, which would also make climate change
even more deadly and difficult to deal with. However, globalization in its present degree and
form was the chosen rather than only possible means of turning the tide against global poverty.
First off, the major emerging economies were each capable of doing quite a lot on their own and
a lot more with just a little help in the form of capital and technology. It was the choice of
the west to engage in private trade rather than foreign aid to achieve these ends. That choice
came about because corporations have a greater control of western governments than western governments
have control of corporations. Corporations seeded that choice both through their own generosity
to the campaigns of politicians and via a public relations campaign against giving foreign aid
to those people. Corporations preferred to just give those people our jobs and skip the middle
man, the taxpayer.
"... Neoliberal economics denies that for real economic agents networks are of primary important. ..."
"... I'm beginning to hate the word "free". It is so vague and so often misused that I'm beginning to think it should just be banned. It is a hindrance to communication. ..."
Free trade works with he assumption that the winners share their profits with the losers, creating
a win-win or at least win-no lose scenario. However, the same people who preach free trade tend
to suggest to "reform" the welfare state, a.k.a. annihilating it, eliminating the very assumption
that makes free trade supposedly a pareto improvement.
Plus economists only argue with money and commodities. Free trade moves jobs abroad, destroying
lifes and communities. This non-monetary cost is not included in the models that prove the advantages
of free trade.
In terms Blinder might understand: "Alan, if you let me murder you, I will give each of your
children and grandchildren $10,000. That's money they wouldn't otherwise receive. You're cool
with that, right?"
"Free trade works with he assumption that the winners share their profits with the losers,
creating a win-win or at least win-no lose scenario"
Nonsense. Free trade, local or international, is about trading labor for labor. There are no
winners or losers. Economies must be zero sum. A free trade means neither you nor I do AAA nothing
for the other that puts us at a disadvantage. Since Reagan made free lunch economics cool, most
economists reject labor as the core of the economy.
Free lunch economics seeks to eliminate labor from the economy as a purely burdensome cost.
Instead, free lunch economics worships money with no connection to labor. But money is, at its
core, simply a proxy for labor. But with free lunch economists constantly rejecting labor as a
burden to be cut and eliminated, trade increasingly becomes about monopoly power and rents, but
that requires eliminating free trade.
The problems with trade in the US is free lunch economists have justified and given authority
to trade US property, land, assets away in exchange for labor by Asians who needed assets to develop.
Assets like fossil fuels, iron ore, etc.
Milton Friedman argued that we Americans become wealthier getting labor produced consumption
goods in exchange for giving them our property in a frequently cite 1978 lecture. Ie, he advanced
the idea that labor is not what trade is about.
Yet, you will never find an economist describing the advantage of free trade by saying nation
one's capitalists make its workers unemployed in order to have nation two's workers do all the
work.
That's the wonder of free lunch economics. Describe free trade in terms of trading labor. Then
immediately argue that it's better to trade, not labor, but assets for labor, making workers in
both nations better off....
The rhetoric is clever, and liberals grew lazy and failed to think about the flaws in free
lunch economics of Friedman, et al, since.
After 200 years it has finally gotten to the point where free trade promoters are having trouble
selling their snake oil. The biggest problem is that 'free' trade isn't free at all. It is a series
of deals heavily negotiated on behalf of the industries that benefit from them...labor, indigenous
groups, and environmentalists are nowhere to be found at the negotiating table...only multinational
corporations hoping to get a free lunch...or as close to it as possible...in return for the gobs
of money they invested in Democrats and Republicans.
Sad that it has taken 200 years to figure this out.
Workers love to screw themselves because they believe they will keep getting high wages even if
they pay every other worker low wages. Do you complain that food prices are too low resulting
in food workers being paid too little?
If you are not calling for higher food prices, then you better believe food workers want your
wages slashed so the price of what you produce for them can be afforded by someone making $15,000
a year.
No one forces any American worker to buy Chinese made goods, or any import. Instead, US workers
kill their own jobs paying prices that are too low to be produced by US workers.
But not even Bernie calls for higher prices paid by all workers so US workers can produce everything
at good 60s era union wage levels. Food was more expensive then. Clothing more expensive. Vacations
like those many take today were very expensive, so vacations then were spartan: visiting relatives,
or camping in government parks or staying at a cabin with an outhouse and no electricity.
Maybe economists could sell free trade if they were not standing if front of what looks like a
concrete prison wall fidgeting with their microphone.
I find it mildly amusing that economists who believe in rational expectations and rational
consumers cannot understand why people are too stupid to get free trade. Experience cognitive
dissonance much?
Only an economist who does not understand business would say that it does not pay to advertise
a book before it's out.
I have an idea what's wrong with ration expectations theory that falls out of work I've done on
self organizing radio networks.
One of the biggest problems when trying to reason about these networks if that the actual nodes
have very limited information about the layout of the network. It's vital to take that into account
when developing strategies for maintaining the network without having a central controller.
I find that people have a really really hard time letting go over an over-all mental model
of what is happening and way. Turns out none of the information that the nodes have is totally
unambiguous. It's always ambiguous and limited and poorly sampled.
That's the central problem with the rational expectations model right there. In real life the
actors do not have anything close to sufficient, well sampled, unambiguous information to work
off of. Even if they did, cognitive load is an issue.
Real life actors tend to punt and work on developing trusted economic associations with other
economic actors. My experience is this takes years to develop. Yet neoliberals don't place any
value on those trusted networks and work to destroy them because they see them as inefficient.
It is worse than that. Economists don't have a model that works, but they assume that each and
every actor in the market does. That is a crazy assumption.
Places are created by import substitution. Free trade makes import substitution harder. That means
places like cities, states and even nations, have found it increasingly difficult to be somewhere
as opposed to some trading post or colony. People like to live somewhere as opposed to nowhere.
Shouldn't ignore 170 years of Western protectionism which led to wealth, followed by 30 years
of total destruction under free trade ,
May 25, 2017 at 07:55 PM
Economists need to study history. They needed to be told about East Asia and should travel around
the destroyed cities of the US. Economists should let the people of Detroit how wonderful things
have gone since the US abandoned protectionism in the early 1970s.
There is a whole lot of truth in your comment. Economists (and policy makers) should look at East
Asian countries and really take into account how export focused economies HAVE managed to improve
the standard of living of their citizens so greatly. And they have managed that- and it is a very
good thing overall. But it has had costs for many here in the US who were not in a position to
bear those costs and there has not been any nearly adequate attempt to help them bear those costs.
Economists should sell free trade in Youngstown, Camden, Cleveland, East St. Louis - tell them
the world was terrible in the 1950s when the US had high tariffs ,
May 25, 2017 at 08:18 PM
Economists should host the next AEA ｍｅｅｔｉｎｇ ｉｎ Yｏｕｎｇｓｔｏｗｎ．
Free trade, like free markets, are both tools of the neoliberal agenda moreso than sound principles
applicable to the real world.
Markets with few or no rules and enforcement to prevent the strong and well connected from
victimizing others resides the fundamental assumption that people are naturally rational and with
the character of angels.
Anyone who has ever driven on a freeway knows that this assumption representative a fatal error.
"Free trade, like free markets, are both tools of the neoliberal agenda moreso than sound principles
applicable to the real world."
Exactly -- The key word here is "tools". They are used as a tools of achieving specific, pretty
nefarious goals.
What is interesting is that neoliberals redefined the meaning of "free" as "unregulated" and
pushed to use it in this "double" meaning, instead of the proper word "fair".
Neoliberals never use the term "fair trade". That's Anathema to them.
That redefinition is actually pretty subtle and pretty devious. Really Orwellian semantic trick.
Compare with "The Ministry of Truth, which concerned itself with news, entertainment, education,
and the fine arts. The Ministry of Peace, which concerned itself with war. The Ministry of Love,
which maintained..."
As Reason once commented in this blog: "I'm beginning to hate the word free".
There is no free trade - only negotiated and regulated trade and dominant nations always get
better terms.
Foreign nations are very suspicious if, for example, the USA reps talk about "free trade" ;-)
Historically GB was the promoter. In this case, free trade was simply one of the mechanisms
of empire in the age of industrialism, one part of the wealth pump that allows to concentrate
the wealth of the globe in Britain during the years of its imperial dominion. Manufactured good
carried huge premium in price. For example, they completely destroyed textile industry in India
to eliminate competition. Opium wars is another good example here.
It's role is pretty similar for the United States today. In a very interesting way it is combined
with "debt slavery" for the most of that nations on the globe.
Kind unique combination, typical for neoliberalism.
It also exists within the web of military treaties that lock allies and vassal nations into
a condition of dependence on the imperial center, as well as enforce the dominant currency in
which international trade is carried out.
It requires a keen eye to look at the history and pay attention to the direction in which the
benefits of "free trade" flow.
But in reality the USA has very little to do with "free trade". The USA practices "selective
protectionism" hypocritically disguised as "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. ..."
"... 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. ..."
I never said that - the word I hated was "freedom", because it has been badly abused (and it is
often not clear what it is). Freedom is only ever relative (i.e. you can't increase one aspect
of freedom without impingement of another in some way). That is not the same as the adjective
"free" - which not an concept relating to a universal state - I know what free entry to a museum
is.
reason : Reply Thursday, March 23, 2017 at 02:20 AM , March 23, 2017 at 02:20 AM
Is the question "Are there Benefits from Free Trade" - different from the question "Are
there Benefits from Trade"? What work is word "free" doing here - and what does it even mean?
I'm beginning to hate the word "free". It is so vague and so often misused that I'm
beginning to think it should just be banned. It is a hindrance to communication.
"... The poor [under neoliberalism] 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. ..."
The poor [under neoliberalism] 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.
"Krugman thought that this was because economists, enamored by the "jewel in the crown of economics",
theory of comparative advantage, tend to look at average effects, not at the heterogeneity of
effects. He thought that this was changing now. "
Interesting that economists still seem to avoid a discussion of those supposedly 'diffuse'
winners. Sure, consumers saw lower prices. But what about investors, at whose behest these 'fair'
trade deals got negotiated in the first place?
Will some honest economist, if there are any left, finally step up and analyze the distributional
effects of 'free' trade between capital and labor?
I expect that the most concentrated effects 'free' trade will be found not only among displaced
workers but also in the profits...and earnings going to the 1%.
Neil Irwin had an interesting piece in the NY Times a couple days ago. Basically, he was meditating
on the future direction of the economic stagnation. He speculates that the rise in inflation was
a non-recurring event, driven largely by rising oil prices. Those clamoring for more inflation
are likely to be disappointed.
Irwin notes that underlying drivers of growth and inflation are absent: globally there is over
capacity in manufacturing, ample supplies of commodities, and a glut of labor.
Concentrated oligopolies know how to best leverage this situation to their advantage, shifting
production and employment among various operations.
I have long argued that this new reality will put a damper on US wage growth, because employers
have escape valves in the global market. IMO Promoters of low interest rates ignore this new reality,
claiming that pressurizing the economy will inevitably lead to higher wages.
We will see who is right. Ten years and counting...and wages have yet to rise.
Yep. However, there is always room for complexity in economics. The right and wrong of inflation
will depend upon the basket of goods AND services. CPI includes the following.
• Food and beverages
• Housing
• Apparel
• Transportation
• Medical care
• Recreation
• Education and communication
• Other goods and services
There is more than ample room for cost push inflation that is not linked to wages in every
bullet. That is not something to celebrate though.
I agree that we want to see inflation resulting from higher wages...but economists rarely talk
about wages in the same breath as inflation...which leads me to suspect that they are interested
mostly in more inflation, which I believe has few benefits, rather than higher wages, which has
a lot of benefits.
Most here strenuously disagree, believing that we must take it on faith that liberal economists
are really promoting higher wages via accommodative monetary policy, even though wages almost
never factor into any discussion of monetary policy or its benefits.
"... Is the question: "Are there Benefits from Free Trade" - different from the question "Are there Benefits from Trade"? What work is word "free" doing here - and what does it even mean? ..."
"... I'm beginning to hate the word "free". It is so vague and so often misused that I'm beginning to think it should just be banned. It is a hindrance to communication. ..."
"... There is no "free" trade - only negotiated and regulated trade. And we seem to do a really lousy job of negotiating, unless you are in the small percentage who rigged the game. ..."
"... Silly boy, only large corporations and capital matter. Workers are a hindrance to rent extractions and can be sacrificed. ..."
Is the question: "Are there Benefits from Free Trade" - different from the question "Are there
Benefits from Trade"? What work is word "free" doing here - and what does it even mean?
I'm beginning to hate the word "free". It is so vague and so often misused that I'm beginning
to think it should just be banned. It is a hindrance to communication.
There is no "free" trade - only negotiated and regulated trade. And we seem to do a really
lousy job of negotiating, unless you are in the small percentage who rigged the game.
Who are "we"? Most people in the rest of the world thinks the game was rigged by the U.S. (whose
main interest seems to be in protecting its patent holders and agriculture).
I care more about US workers than workers in other countries. As should our politicians. And I
think when the US is strong the rest of the world is better for it.
As more expatriots travel and do business overseas, more foreign born sisters, brothers, and
cousins come here for our slice of the global supply chain production. As the line blurs between
our home girls and home boys vs others, the lines between many ethnicities also blurs as intermarriage
moves forward.
Forget political favoritism and affirmative favoritism! Let the good times roll and thrill
your soul! Got soul?
Here's something you probably never saw or heard about in the west. This is Putin answering questions
regarding ISIS from a US journalist at the Valdai International Discussion Club in late 2014.
from the U.S.. much love for you Putin. you really opened the eyes of many, even in our country.
this man is the definition of president and the u.s hasnt had one for over 40 years... smh.
As an American I can say that all of this is very confusing. However, one thing I believe is
true, Obama and Hillary are the worst thing to ever happen to my country !!!! Average Americans
don't want war with Russia. Why would we ?? The common people of both countries don't deserve
this !!!!
+Emanuil Penev Obama is a human puppet who chose to be controlled, He is therefore culpable
for his action of supporting Islamic terrorists. Right now Islamic invasion of western countries
is the real problem. The USA is now under the control of Obama the Muslim Trojan horse who wants
the world to be under the rule of an Islamic empire. USA's military action in the Middle East
is the result of USA being under occupation by a Muslim Trojan horse that wants to create tidal
waves of Muslim refugees harboring Muslim radicals and terrorists for invading Europe and the
USA. Watch video (copy and paste for search) *From Europe to America The Caliphate Muslim Trojan
Horse The USA is a victim, not a culprit, in the Muslim invasion of western counties. Obama and
his cohorts are the culprits.
basically Russia wants to be friends with America again and America ain't having it. they have
the capabilities to set up shop all around the world. it's like putting guard towers in everyone's
lawn just in case somebody wants commit crime. but you never see inside the towers or know who
is in them but they have giant guns mounted on them ready to kill. that's how Putin feels. I mean
I get it but every other country has nukes. get rid of the nukes and the missile defense will
go away. if the situation were reversed it would be out president voicing this frustration. but
Putin said it, America is a good example of success that's what Russia needs to do is be more
like America. they have been doing it in the last year or so. I think America will come around
and we will have good relations with Russia again. so wait... did we support isis as being generally
isis or support all Qaeda / Saddam's regime which lead to isis??
The US supported multiple Rebel Groups that fought against Syria, they armed them, gave them
money, and members of those groups split up and formed more Rebel groups or joined different ones.
ISIS (at the time, not as large) was supported by the rebel groups the US armed and they got weapons
and equipment from said Rebel Groups, even manpower as well.. That is how ISIS came to be the
threat it is today.
putin doesnt view the us as a threat to russia..?? he has said countless times that he considers
the us as a threat.. and that russian actions are a result of us aggression
US people are a threat for all the world because they are not interested in politics, they
don't want to know truth, they believe to their one-sided media and allow their government and
other warmongers in the US military industry to do whatever they wish all over the world. US politics
are dangerous and lead to a new big war where US territory won't stay away this time. It''s time
for Americans to understand it. If you allow your son to become a criminal, don't be surprised
that your house will be burned some day.
Obama and Clinton are progressive evil cunts funded by Soros. Their decision making is calculated
and they want these horrendous results because it weakens the US and benefits globalism. Putin
kicked the globalists the fuck out, and when Trump wins he will do the same! They are scared shitless.
TRUMP/PENCE 2016
With a stupid and warmongering opponent such as the USA, Russia do not need to construct a
narrative or think out some elaborate propaganda. Russia simply needs to speak the truth. And
this is why the US and its puppets hates Russia and Putin so much.
"... Russia is aware of the United States' plans for nuclear hegemony ..."
"... The Russian president also highlighted the fact that although the United States missile system is referred to as an "anti-missile defense system," the systems are just as offensive as they are defensive: ..."
"... Putin further explained the implications of this missile defense system's implementation without any response from Russia. The ability of the missile defense system to render Russia's nuclear capabilities useless would cause an upset in what Putin refers to as the "strategic balance" of the world. Without this balance of power, the U.S. would be free to pursue their policies throughout the world without any tangible threat from Russia. Therefore, this "strategic balance," according to Putin, is what has kept the world safe from large-scale wars and military conflicts. ..."
(ANTIMEDIA)
As the United States continues to
develop and upgrade their nuclear weapons capabilities at an alarming rate,
America's ruling class refuses to heed warnings from President Vladimir Putin
that Russia will respond as necessary.
In his most
recent
attempt to warn his Western counterparts about the impending danger of a
new nuclear arms race, Putin told the heads of large foreign companies and business
associations that Russia is aware of the United States' plans for nuclear
hegemony. He was speaking at the 20th St. Petersburg International Economic
Forum.
"We know year by year what will happen, and they know that we know,"
he said.
Putin argued that the rationale the U.S. previously gave for maintaining
and developing its nuclear weapons system is directed at the so-called "Iranian
threat." But that threat has been drastically reduced since the U.S. proved
instrumental in reaching an
agreement with Iran that should
put to rest any possible Iranian nuclear potential.
The Russian president also highlighted the fact that although the United
States missile system is referred to as an "anti-missile defense system," the
systems are just as offensive as they are defensive:
"They say [the missile systems] are part of their defense capability,
and are not offensive, that these systems are aimed at protecting them from
aggression. It's not true the strategic ballistic missile defense is part
of an offensive strategic capability, [and] functions in conjunction with
an aggressive missile strike system."
This missile system has been launched throughout Europe, and despite
American promises at the end of the Cold War that NATO's expansion would
not move "as much as a thumb's width further to the East," the missile system
has been implemented in many of Russia's neighboring countries, most recently
in Romania.
Russia views this as a direct attack on their security.
"How do we know what's inside those launchers? All one needs to do
is reprogram [the system], which is an absolutely inconspicuous task,"
Putin stated.
Putin further explained the implications of this missile defense system's
implementation without any response from Russia. The ability of the missile
defense system to render Russia's nuclear capabilities useless would cause an
upset in what Putin refers to as the "strategic balance" of the world. Without
this balance of power, the U.S. would be free to pursue their policies throughout
the world without any tangible threat from Russia. Therefore, this "strategic
balance," according to Putin, is what has kept the world safe from large-scale
wars and military conflicts.
Following
George W. Bush's 2001 decision to unilaterally withdraw the U.S. from the
1972 Antiballistic Missile Treaty, Russia was, according to Putin, left with
no choice but to upgrade their capabilities in response.
Putin warned:
"Today Russia has reached significant achievements in this field.
We have modernized our missile systems and successfully developed new generations.
Not to mention missile defense systems We must provide security not only
for ourselves. It's important to provide strategic balance in the world,
which guarantees peace on the planet.
Neutralizing Russia's nuclear potential will undo, according to Putin,
"the mutual threat that has provided [mankind] with global security for decades."
It should, therefore, come as no surprise that NASA scientists want to
colonize the moon by 2022 - we may have to if we don't drastically alter
the path we are on. As Albert Einstein
famously stated:
"I know not with what weapons World War III will be fought, but World
War IV will be fought with sticks and stones."
"... It should never be forgotten that the conservative orthodoxy -- of low taxes on the wealthiest, deregulation of finance, small govt deficits, and the need for inequality to spur individual initiative -- was also economics departments orthodoxy for decades. Economists put their imprimatur on this whole mess, with VERY few exceptions. ..."
"... 70% of the population STILL believes that federal deficits are a big problem, and also believes that this is standard economic orthodoxy. Until the crash, most people were ready to accept some degree of privatization of Social Security, and Martin Feldstein pushed on this repeatedly with no counterargument from the economics departments. The Clinton economic team was instrumental in pushing financial deregulation, upon the supposed orthodoxy that it is good for the economy. Even the worst nonsense in Friedmans Capitalism and Freedom and Free to Choose barely saw any push-back from other economists in the op-ed pages. ..."
"... Reaganomics was approved by most economists either through mood affiliation or intellectual incompetence. That 70% currently includes college graduates who took economics classes and traders on Wall Street. ..."
"... Nonsense. Polls of profession economists opinions abound. Reaganomics/neoliberalism has predominated in economics until recently. On a few big issues (notably, on whether the size of federal deficits as % of GDP should be reduced) the split remained even. ..."
It should never be forgotten that the "conservative orthodoxy" -- of low taxes on the wealthiest,
deregulation of finance, small gov't deficits, and the need for inequality to spur individual
initiative -- was also "economics departments orthodoxy" for decades. Economists put their imprimatur
on this whole mess, with VERY few exceptions.
It's been a first-rate intellectual scandal, perpetrated by some of the biggest names in the
economics racket, and with most of the lesser lights tagging along, for fear of ostracism.
And most of them STILL don't have a clear view of what the real problems are.
70% of the population STILL believes that federal deficits are a big problem, and also believes
that this is standard economic orthodoxy. Until the crash, most people were ready to accept some
degree of privatization of Social Security, and Martin Feldstein pushed on this repeatedly with
no counterargument from the economics departments. The Clinton economic team was instrumental
in pushing financial deregulation, upon the supposed orthodoxy that it is good for the economy.
Even the worst nonsense in Friedman's "Capitalism and Freedom" and "Free to Choose" barely saw
any push-back from other economists in the op-ed pages.
"Conservative orthodoxy" can be laid squarely at the feet of the economics departments, up
until the crash. If the ones who are supposed to know better, don't make a concerted effort to
refute the tons of nonsense spouted in the name of economics, then they should resign their tenure.
It most certainly WAS taken as the orthodoxy. Reaganomics was approved by most economists
either through mood affiliation or intellectual incompetence. That 70% currently includes college
graduates who took economics classes and traders on Wall Street.
"Reaganomics was approved by most economists either through mood affiliation or intellectual incompetence."
Not even remotely true. Criticized by liberal economists. Blasted by the conservative economists
who refused to work for the Reagan White House. Even blasted by a young Greg Mankiw but that is
before he drank the Bush Kool Aid.
Lee - your claim here is just wrong. And the more you defend it, the worse it gets.
Nonsense. Polls of profession economists' opinions abound. Reaganomics/neoliberalism has predominated
in economics until recently. On a few big issues (notably, on whether the size of federal deficits
as % of GDP should be reduced) the split remained even.
(1992 -- responses from 464 US economists):
"A large federal budget deficit has an adverse
effect on the economy" 78.7% agree (includes 'agree with provisos').
"The money supply is a more important target that interest rates for monetary policy" 56.7%
agree.
"As the USSR moves toward a market economy. a rapid and total reform (i.e., "going cold turkey")
would result in a better outcome than a slow transition" 57.6% agree.
"A minimum wage increases unemployment among young and unskilled workers" 78.9% agree.
"An economy in short-run equilibrium at a real GNP below potential GNP has a self-correcting
mechanism that will eventually return it to potential GNP" 50.8% agree.
"Changes in aggregate demand affect real GNP in the short run but not in the long run" 52.8%
agree.
"Lower marginal income tax rates reduce leisure and increase work effort" 55.4% agree. (Alston
et al., "is there a global economic consensus?" AEA Papers and Proceedings, 1992)
ObamaCare is, of course, a
neoliberal "market-based" "solution." ObamaCare's intellectual foundations were expressed most
clearly in layperson's language by none other than the greatest orator of our time, Obama, himself
(
2013 ):
If you don't have health insurance, then starting on October 1st, private plans will actually
compete for your business, and you'll be able to comparison-shop online.There will be a marketplace
online, just like you'd buy a flat-screen TV or plane tickets or anything else you're doing online,
and you'll be able to buy an insurance package that fits your budget and is right for you.
Let's leave aside the possibility that private plans are
phishing for your business, by exploiting informational asymmetries, rather than "competing"
for it. Obama gives an operational definition of a functioning market that assumes two things: (1)
That health insurance, as a product, is like flat-screen TVs, and (2) as when buying flat-screen
TVs, people will comparison shop for health insurance, and that will drive health insurers to compete
to satisfy them. As it turns out, scholars have been studying both assumptions, and both assumptions
are false. "The dog won't eat the dog food," as marketers say. This will be a short post; we've already
seen that the first assumption is false - only 20%-ers who have their insurance purchased for them
by an institution could be so foolish as to make it - and a new study shows that the second assumption
is false, as well.
ObamaCare's Product Is Not Like a Flat-Screen TV
Here's the key assumptoin that Obama (and most economists) make about heatlth insurance: That
it's a commodity, like flat screen TVs, or airline tickets, and that therefore , there exists
a "a product that suits your budget and is right for you" because markets. Unfortunately, experience
backed up by studies has shown that this is not true. From ObamaCare is a Bad Deal (for Many)
. From Mark Pauly, Adam Leive, Scott Harrington, all of the Wharton School,
NBER Working Paper No. 21565 (
quoted at NC in October 2015 ):
This paper estimates the change in net (of subsidy) financial burden ("the price of responsibility")
and in welfare that would be experienced by a large nationally representative sample of the "non-poor"
uninsured if they were to purchase Silver or Bronze plans on the ACA exchanges. The sample is
the set of full-year uninsured persons represented in the Current Population Survey for the pre-ACA
period with incomes above 138 percent of the federal poverty level. The estimated change in financial
burden compares out-of-pocket payments by income stratum in the pre-ACA period with the sum of
premiums (net of subsidy) and expected cost sharing (net of subsidy) for benchmark Silver and
Bronze plans, under various assumptions about the extent of increased spending associated with
obtaining coverage. In addition to changes in the financial burden, our welfare estimates incorporate
the value of additional care consumed and the change in risk premiums for changes in exposure
to out-of-pocket payments associated with coverage, under various assumptions about risk aversion.
We find that the average financial burden will increase for all income levels once insured. Subsidy-eligible
persons with incomes below 250 percent of the poverty threshold likely experience welfare improvements
that offset the higher financial burden, depending on assumptions about risk aversion and the
value of additional consumption of medical care. However, even under the most optimistic
assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience
both higher financial burden and lower estimated welfare ; indicating a positive "price
of responsibility" for complying with the individual mandate. The percentage of the sample with
estimated welfare increases is close to matching observed take-up rates by the previously uninsured
in the exchanges.
So, for approximately half the "formerly uninsured," ObamaCare is a losing proposition; I don't
know what an analogy for flat-screen TVs is; maybe having to send the manufacturer money every time
you turn it on, in addition to the money you paid to buy it? That's most definitely not a "package
that fits your budget and is right for you," unless you're a masochist or a phool. Second, the portion
of those eligible that does the math probably won't buy the product if they're rational actors (and
Obamaare needs to double its penetration of the eligible to avoid a death spiral ). That again
is not like the market for flat-screen TVs; the magic of the ObamaCare marketplace has not
operated to produce a product at every price point (or a substitute).[1] Bad marketplace! Bad!
Bad!
Health Care "Consumers" Tend not to Comparison Shop
We turn now to a second NBER study that places even more dynamite at ObamaCare's foundations.
From Zarek C. Brot-Goldberg, Amitabh Chandra, Benjamin R. Handel, and Jonathan T. Kolstad, of Berkelely
and Harvard, "What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities,
and Spending Dynamics" NBER Working Paper
No. 21632 ( PDF ), the abstract:
Measuring consumer responsiveness to medical care prices is a central issue in health economics
and a key ingredient in the optimal design and regulation of health insurance markets. We study
consumer responsiveness to medical care prices, leveraging a natural experiment that occurred
at a large self-insured firm which required all of its employees to switch from an insurance plan
that provided free health care to a non-linear, high deductible plan[2]. The switch caused a spending
reduction between 11.79%-13.80% of total firm-wide health spending. We decompose this spending
reduction into the components of (i) consumer price shopping (ii) quantity reductions and (iii)
quantity substitutions, finding that spending reductions are entirely due to outright reductions
in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible
coverage. Consumers reduce quantities across the spectrum of health care services, including
potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging
services). We then leverage the unique data environment to study how consumers respond to the
complex structure of the high-deductible contract. We find that consumers respond heavily to spot
prices at the time of care, and reduce their spending by 42% when under the deductible, conditional
on their true expected end-of-year shadow price and their prior year end-of-year marginal price.
In the first-year post plan change, 90% of all spending reductions occur in months that consumers
began under the deductible, with 49% of all reductions coming for the ex ante sickest half of
consumers under the deductible, despite the fact that these consumers have quite low shadow prices.
There is no evidence of learning to respond to the true shadow price in the second
year post-switch.
So, empirically, these "consumers" just don't act the way that good neoliberal Obama says they
should; they do not comparison shop. That alone is enough to undermine the intellectual
basis of ObamaCare. If there's no comparison shopping going on, there's no competitive pressure for
health insurers to improve their product (assuming good faith, which I don't).
(We can leave aside the issue of motivation, but to speculate, I've found that when I talk to
people about health care and health insurance; they're very defensive and proprietary about
whatever random solution they've been able to cobble together; and if you'd been sold an exploding
flat-screen TV, and had somehow been able to use duct tape and a well-timed fist to the housing to
get it work, most of the time, wouldn't you be rather unwilling to go back to the same store and
buy another? So there is evidence of "learning"; the lesson learned is once you've got something
that seems to works, don't on any account change it, and we "bear those ills we have," rather "than
fly to others that we know not of.")
Moreover, the population studied has more ability to comparison shop than ObamaCare's. From
page 4 of the study :
Employees at the firm [in the study] are relatively high income ( median income $125,000-$150,000
), an important fact to keep in mind when interpreting our analysis
The top income for a family of four eligible for ObamaCare is around $95K (and not eligible for
subsidy). Do people think this ObamaCare-eligible population has more ability to comparison shop,
compared to a population with a $125K median income for individuals, or less ability? To put this
more tendentiously, if a population that can afford accountants or at least financial planners doesn't
comparison shop, how likely is it that a population that cannot afford those personal services will
do so?
Even worse, the population studied reduces costs, not by comparison shopping, but by self-denial
of care. From page 6 of the study
:
In our setting consumers were provided a comprehensive price shopping tool that allowed them
to search for doctors providing particular services by price as well as other features (e.g. location).
So, just like the ObamaCare "marketplace online" front end (at least after they got it working).
And what happened?
We find no evidence of price shopping in the first year post switch . The effect
is near zero and looks similar for the t -1 - t 0 year pair (moving from
pre- to post-change) as it does for earlier year pairs from t 4 to t 1 .
Second, we find no evidence of an increase in price shopping in the second year post-switch; consumers
are not learning to shop based on price. Third, we find that essentially all spending reductions
between t 1 and t 0 are achieved through outright quantity reductions
whereby consumers receive less medical care . From t 1 to t 0 consumers
reduce service quantities by 17.9%. Fourth, there is limited evidence that consumers substitute
across types of procedures (substitution leads to a 2.2% spending reduction from t 1
- t 0 ). Finally, fifth, we find that these quantity reductions persist in the
second-year post switch, as the increase in quantities between t 0 and t 1
is only 0.7%, much lower than the pre-period trend in quantity growth. These results occur
in the context of consistent (and low) provider price changes over the whole sample period.
Now, it could be that the study population is reducing items like cosmetic surgery and not items
like dental care (assuming they've got dental); the
Healthcare Economist summary of this study says no. In fact, says the study, some of the foregone
services were "likely of high value in terms of health and potential to avoid future costs." And
it could be that the lower-income ObamaCare-eligible are smarter shoppers (dubious: Shopping is a
tax on time a lot of working people can't pay). That said, it looks like ObamaCare has replaced a
system where insurance companies deny people needed care with a system where people deny themselves
needed care; which is genius, in a way. However, if any doctors or medical personnel continue
to support ObamaCare politically, they should consider closely whether they're violating the principle
of non-maleficence - "First,
do no harm" - and halt their support, if so. Bad marketplace! Bad, bad!
Conclusion
Shopping for health insurance under ObamaCare is nothing at all like shopping for a flat-screen
TV. First, there's a sizeable population who, if they are rational actors, just won't buy health
insurance at all; the ObamaCare "marketplace" is not capable of adjusting prices to get such "consumers"
to enter the market. Second, people don't comparison shop; they reduce needed care. (To flog the
flat-screen TV metaphor even further, if the screen is so defective it's painful to watch, people
don't reduce the pain by comparison shopping for a better TV; they reduce the pain by watching less,
and keep the TV they have.)
So, with ObamaCare, and thanks to the dogmas of neoliberalism, we have a "marketplace" that repels
"consumers" from entering it, and repels people from shopping if they do enter. Perhaps there's a
better solution out there?
NOTES
[1] It may be that the ever-increasing mandate penalties will force enough people into the marketplace
to make ObamaCare
actuarially stable ; needless to say, we don't see Federal agents forcing people into Best Buy
to buy TVs, although the social pressure of Black Friday comes close.
[2] Again, much like ObamaCare plans, which are increasingly high-deductible.
About Lambert Strether
Lambert Strether has been blogging, managing online communities, and doing system administration
24/7 since 2003, in Drupal and WordPress. Besides political economy and the political scene, he blogs
about rhetoric, software engineering, permaculture, history, literature, local politics, international
travel, food, and fixing stuff around the house. The nom de plume "Lambert Strether" comes from Henry
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The author seems to have forgotten that the kludge called "Obamacare" is not the single payer
solution that this Obama wanted. What you have is what was able to get past a Congress after intense
lobbying by HMOs and insurers. I see little evidence of ideology in the result, "neoliberal" or
otherwise. It does nothing to address the insane-and-rising cost of healthcare, because the vested
interests are OK with that.
Let me clue you in: the readers here are way WAY too clued in to buy your Big Lie.
1. Obama was never in favor of single payer, ever. Wash your mouth out for even suggesting
that
2. He had health care lobbyists draft the legislation
3. He used the "public option" as a bright shiny toy. He was so uncommitted to it he didn't
even trade it away. He gave it up as a free concession. A basic principle in negotiating is you
NEVER make a free concession. The fact that he just threw it away is proof he never meant it as
anything more than a talking point
I hope you are paid to dispense this blather. I really feel sorry for you if you actually believe
it. Obama is a neoliberal who campaigned as a leftist but has governed as a right-winger. His
apologists have regularly used the meanie Republicans as excuses for his selllouts, when Obama
gets what he wants when he wants it, and there's no evidence that his center-right results are
at all at odds with what he intended to achieve.
I won't pretend to be as smart as you and I was doing okay with your comments until the following.
"Obama is a neoliberal who campaigned as a leftist but has governed as a right-winger." You're
kidding? I won't ask for an example because I am sure there are a few issues you can name and
discuss. That being said, Obama is no where near the middle, never mind the right. If anything,
I would say Obama is an inexperience professor trying to teach Economics at Wharton….he can't.
The problem is Obama is too narcissitc to even think about listening. He has constantly picked
situations because it is what he believes and that includes the simple things such as inviting
the Harvard professor who was arrested early on in his presidency for a beer to the WH to giving
how many millions to Solyndra. He can't be wrong!
As far as Obamacare. To me it is a simple issue. Health Care does not equal Health Insurance.
The sad part is we have spent billions in what will eventually end up as quasi single payer system
with 4 large insurance companies sharing the administrative function. Let's just get there and
quit kidding one another.
Huh? Obama has proven to be an extremely skilled political infighter when he wants something
done. And as to him being center-right, all you have to do is look at his staff, most important
his economics team.
He's got a history of being a fake leftist going back to his days in Chicago. Obama, Michelle,
and Valerie Jarrett were the black faces that legitimated the plan by the Pritzkers and local
finance interests to gentrify near South Chicago and push the black community 3 miles further
south while giving them nothing. See here for details:
And he's never been a real prof. This constitutional law talk is a crock. No one can remember
him teaching any courses (he appears to have taught a couple but made no impression). This was
a resume-burnishing post and he did the bare minimum.
Beg to slightly differ regarding Obama and single payer (if the transcripts of his campaign
rally speech in Jersey City before he was nominated hadn't been scrubbed from the Internet, I'd
have the exact wording).
After he had had told the story of sitting with his dying mother on her death bed, surrounded
by paperwork, trying to sort out the restrictions of her employer-based insurance policy and there
wasn't a dry eye in the gymnasium, everyone THOUGHT he said, "When I am President, I will fight
tooth and nail for single payer for every single American."
And the gymnasium absolutely erupted in applause.
Apparently, he said something very CLOSE to that, but when the sentence is carefully parsed,
did not mean that all.
Nevertheless, as a former Obot who worked tirelessly to get him elected on almost the sole
basis of the genuine emotion he exhibited when he told this awful story and how he promised to
rectify the situation in the future, I felt the dagger of betrayal when the first thing he said
during the health care debate was, "I'm taking single payer of the table."
I hate to say this, but a lot of us at Corrente did try to keep track in 2008, and I can't
remember any reporting on this at the time, and we were also strongly for single payer, which
we also kept track of. Not to say that we couldn't have missed something, but a link to something
contemporaneous would be helpful.
I know that I've said this on NC before, but Yves is absolutely right - and THEN some. When
Dennis Kucinich tried to introduce EVEN A DISCUSSION of single payer in Congress, the Democratic
Party leadership blocked him from even bringing it up. Pelosi et al. were absolutely committed
to the Republican neoliberal policy.
This led us to discuss whether the only way to get progressive health care policy was to start
a new party, now that the Democrats have become the Wall Street wing of the Republican Party's
natural resource monopolists.
I don't know the date of this speech (the upload predates the 2010 debacle), but Obama stated,
"I happen to be a proponent of single payer health care…"
That said, we got hosed. Each of us must now decide whether to roll over and take the corn,
or, to demand single payer and the re-regulation of industry (the pharmaceutical industry and
others that affect health tangentially).
I've not been able to resolve the technical reason behind my missing links. You'll find the
53 second clip on youtube channel 6y2o12la titled: Obama on single payer health insurance.
"the single payer solution that this Obama wanted"
Obama kept single payer off the table from the start. He would have had to decide to fight
the industry and take the fight to the country. Medicare for All is a simple idea. He could have
done a 50 state whistle stop tour. He could have saturated any Congressional district opposing
Medicare for All with the same message. That wasn't his plan.
I attended one of his community meetings on health care, held around the country prior to him
adopting Romney Care as his proposal. One of the organizers of the meeting starts off by complaining
to the group about not just telling Obama we want single payer.
One of the first things Obama did was make the GOP party point men on health care(Olympia Snowe
anyone?)
And it was Nancy Pelosi who called it impractical and took it off the table, heck she even
went so far as to have some of the activists committed to being heard arrested for being disruptive.
She then promptly gave a minority Blue Dog group the opportunity to co opt the debate to grandstand
on abortion.
It's positively revisionism to blame the health care mess on GOP. It was Democrats who screwed
it up from start to finish.
"Obama wanted'? Single payer was ruled out from the beginning. Advocates for that position
were not permitted to be part of the discussion. Who knows what Obama wanted? Look at his actions
on this and other issues to make a better judgment. My take is that it was a presidency of symbolism
not substance when it came to policies.
I appreciate that such takedowns are always link-filled and impeccably sourced, and though
combativeness in the comments is not the prevailing tone of this website (happily), damn if I
don't pump my fist when I read a troll getting cut down thusly.
Maybe you're not an incredibly lame troll. Maybe you're just a poor beginner who unwittingly
wandered onto the Varsity field. But if you "see little evidence of ideology in the result," you
may want to look up the definitions of "evidence," "ideology" and "result."
Educated elites with a modicum of leisure always love to play these games. It took them decades
and the most draconian policies imaginable to break the habit of workers early in the industrial
revolution of trading off pay for leisure time. The basic notion of every capitalist scold throughout
the ages has been that this is irrational laziness, even if your job is a physically exhausting
and soul-crushing exercise–you must work more, or you are a bad person who should be punished.
Now, it's the "let's turn everything into a market" game. Don't want to play? Screw you–we'll
make it mandatory, and, of course, punitive. This goes way beyond Obamacare into every facet of
our lives. Public utilities? Hell no–give them "choice"! Community schools? No way–can't have
the races and the classes and the ability levels mixing in such a promiscuous manner–let's go
charter "academies", or vouchers. It's a normative takeover under the guise of "rational" "scientific"
"efficiency".
So true. Ask them about their golf game. It is only YOUR leisure time at issue, not theirs.
Don't you wish you could count as "work" blathering your stream of conciousness on CNBC day after
day?
I remember that one of the 'talking points' in favour of Heritage Foundation Care (HFC) was
that "pre-existing" conditions were not to be allowed to deny anyone coverage. Using that logic,
it can be asserted that 'Poverty', absolute or relative, a pre-existing condition if there ever
was one, denies 'patients' useful medical care. The system as administered is internally contradictory.
Taken one step farther, the HFC can be defined as a "Faith Based Service Provider." This would
be an insult to actual traditional Faith based providers. Most "real" FBPs are governed, at least
in theory, by ideologies that counsel 'compassion' when dealing with the less fortunate. As has
been demonstrated, the HFC program counsels exploitation when dealing with the less fortunate.
A case in point; this week a local religious charity opened a 'Free Clinic' in our town of 45,000
or so souls. The local paper put this on the front page. Buried in the body of the article was
the mention that this clinic was fully booked up for the first, and probably second month. All
this before public mention of it's existence. There's your 'Marketplace' in action. As I discovered
when I looked into signing up for the Mississippi Medicaid program for myself, a family cannot
have over 2,500 USD in 'assets.' There is an ongoing dispute as to whether or not an automobile
classifies as an item counted toward this limit. Thus, those in our state who do qualify for Medicaid
are poor indeed.
Using that logic, it can be asserted that 'Poverty', absolute or relative, a pre-existing
condition if there ever was one
Great point. In the US we have a health care system that saves people's lives while–in many
cases–taking away their means of living it. The Hippocratic Oath should be modified to read: first
do no harm to Capitalism.
Obama is a 1060s style communist;==perhaps one could call him a "NeoCommunist" Obamacare is
anything but "Neoliberal" –it is redistributionist in its very nature. This is why it is crumbling.
It is an absurd notion as is this article, but that is to be expected as you cannot seem to get
over this adolescent attachment to Marxism.
Yes, it is an intriguing suggestion. Does commenter thatworddoesnotmeanthat care to
elaborate? Were the architects of RomneyCare (and it's national extension Obamacare) attempting
to recreate a golden age, of 11th century free peasants– happily enjoying the abundant commons
of medical care, in the carefree forests and dales, before they slipped under the Norman Yoke
of feudal exploitation?
Or, is the reference to some non-Western communist society that flourished in the mid-11th
century? Perhaps thatworddoesnotmeanthat has studied early communist cultures in South Asia, America,
or Africa that distributed healthcare in a way that eerily foreshadows what Romneycare did in
Massachusetts?
The record is irrefutable–the ACA was written by the insurance companies with a wink and a
nod to Big Pharma and the HMOs. Unless you are going to seriously entertain the notion that these
are "communist" institutions, or give a rats ass about anything but making money, you can't really
believe what you wrote. You are just angry about something and projecting your fears onto this
travesty.
The subsidies of Obamacare, if you qualify for them, requires the IRS to get intimately involved
with your checkbook. Just like middle class folks want recipients of SNAP to be regulated with
every food and drink purchase … matching what the bourgeoisie thinks matches their own moral rectitude.
I prefer not to make the IRS my intimate partner … helping me to define what is an asset and
what is income to the last penny.
The idea behind high deductibles is that you'll force consumers to economize. It's kind of
like telling science, "Hey. This patient needs ten pills to live? Let's give him eight and see
what happens."
Medical treatment is a science issue. A treatment's either effective or it's not. You can negotiate
the cost – *with the supplier* – but you can't bully a disease or injury into behaving the way
you want. You certainly can't bully the sick person and they're in no position to negotiate with
the supplier. They have none of the necessary experience or health. That's exactly the wrong time
to try to educate someone about their "options."
But then that's the whole point. The medical market is intentionally littered with opacity.
There is nothing transparent about insurance, much less drugs or surgeries. Medicine is increasingly
dominated by complex bureaucratic cartels for exactly that reason – so you *won't* find out how
things work. They don't want you comparison shopping for drugs, surgeries, therapists. Everything
about the modern medical system is precisely about robbing "customers" of human agency.
The whole idea of shopping for health insurance itself is absurd. It requires you figuring
out exactly how sick you'll be in the next year and then inventing a time machine to travel back
so you can pick the Pareto optimal policy with exactly the best deductible – which really won't
matter because then they'll find a way to make sure your E.R. wasn't in network nor your anesthesiologist
and the only drug to keep you alive won't be "covered" and then you'll wish it was only an Arnold
Schwarzenegger skin-wearing android sent to kill you 'cause that would be way easier.
They're removing choice left and right and destroying scientific information through lobbying.
The people responsible for creating diseases aren't being held responsible for them but the victims
suffering from them are.
When multiple sclerosis organizations are run by drug companies selling $50K+ a year drugs,
do you think they want those customers finding out that deworming society is what created the
risk for M.S. in the first place?
As Martin Shkreli put it, he has the perfect "price inelastic" product. Patients are a captive
market that's easy to exploit. Either they get what they need or they die. You can charge what
you want.
Do you think lazy executives looking to bump up next quarter's earnings are going to invest
heavily over the long haul in scientific models of effective disease prevention and treatment
or are they simply going to squeeze people a little more and a little more?
Let's not forget why politicians love the sickcare complex. The more an industry turns into
a cartel, the easier it is to raise both economic and political rents from it. Let's be honest
here and call a spade a spade. Politicians like this system because it easily feeds campaign dollars
into the system. It may not be efficient for treating patients, but it's quite efficient for extracting
political re
Comparison shop for medical care in the USA? You've got to be kidding.
Case in point. My doctor recommended a cardiovascular "stress test" for diagnosis of heartburn
symptoms to make sure that it wasn't cardiovascular in nature. I traveled to a regional heart
specialist center for the test, but based upon previous experience refused to undergo the test
until they put the bill for the procedure in writing including my deductible cost. The intake
administrator acted shocked by such a request, and it took 30 minutes of increasingly strongly
worded demands on my part before they finally produced a verbal quotation – which I recorded for
future use if they decided to bill $12,000 for 10 minutes on a treadmill.
The world's most expensive health care extortion system at work.
It's nearly impossible to "comparison shop" if you're part of an HMO these days. The only choice
one really has is to select their PCP. After that the PCP pretty much forces you to see docs and
get tests within the hospital system – presumably for "coordinated care". And this for nearly
$1000/mo for a single person not receiving much in the way of "healthcare". That which can't continue,
won't….
One of the things that distinguishes the US from other countries is our high level of tax compliance.
I'm concerned that these Obamacare penalties will lead to diminished compliance, both because
people resent the penalties, and because it is such an intellectually frustrating exercise to
try and estimate future income.
More like a flat screen TV, rented from Samsung, that functions like one of those old British
hotel radiators that you have to feed with pence $60 copays every 10 minutes
in order for Time Warner not to interrupt the streaming.
And then you get balance billing from Disney for the content.
My experience is that there IS no "competition" in any product field that involves actuarial
calculations. I get a subsidy and I am 63. There were about 50 plans offered in my area. A few
were OVERpriced, yes, but the vast majority offered very similar premium prices, and identical
elephantine deductibles, which means that except for aspects of the annual physical, it will "cover"
( assuming cover means pay for) jack. "Coverage" is not care, it is nothing to brag about. I am
"covered" for expenses beyond my deductible as a form of catastrophic insurance but the plan will
never pay for anything else and actuarially, it is easy to calculate a premium that guarantees
that companies will make lotsa money while paying out less. Needless to say the "product" is outrageously
overpriced for what it covers and puts people like me _- close to medicare but limited income
and owns own house free and clear in a far far worse position than before the law. ( eg medicaid
asset recovery if I dare to state a lower income etc etc). So I'm "covered" , so what. I have
far less actual care. And that , it appears to me , is deliberate.
Even if it were "competitive" there is not much point in comparison shopping for flat screen tvs..
for a flat screen tv with X features made by brand "A" the price difference for a tv with the
same features ( and longevitiy) of brand "B: will in the vast majority of online offerings, be
so close as to not be worth the effort. This is even more true with insurance.
Like most politicians, Obama wanted to "do something" and a have a bill he could hold up in front
of Everybody and say "see this is mine". My experience with such legislators/administrators is
that they have a lot of hubris and grees for the bill to pass and do not subject potential downsides
to any critical analysis so that advisers get the message "construct something that will pass"
.The fact that he was dumb enough not to see this coming suggests that his "ideology" was driven
by his advisers- who are definitely neocons IMO not neoliberals unless the term "liberal" is used
in its classic economic sense.
And while we are on the subject, "Health care" is not really subject to "market" principles. Start
with the fact that most people in this country have less than 1K savings, which means that they
cannot cover the ginormous deductibles most "silver" plans offer or the premiums of better plans.
Then add in the fact that these people cannot predict how much care will be needed in a given
year or what the final cost of that care will be. What's the "market " for that? Under these two
facts mandatory "insurance"with high deductibles and narrow networks simply functions as a wealth
transfer from strapped lower-middle and middle class adults to Insurance company shareholders
and CEOs.
Even assuming that Obama "wanted" single payer- an assumption that has been ably refuted in this
string already, had he given "what can get passed" a moment's critical analysis, he might have
realized that he- with his insistence on change for change's sake- was making it worse for so
many Americans. I for one , could care less that pre-existing conditions are now "covered" if
I can't actually use the coverage- pre existing survives, its now called high deducitlbes and
narrow networks.
Actually, as Winston Churchill famously noted, "Americans manage do the right thing after they
have exhausted all of the wrong choices firs"t. So it is that had we gone right to single payer
without this "market based" attempt, we would have heard howls of capitalistic remorse, etc.
So I am glad that Obamacare was attempted and that it is failing predictably. It is pretty
clear to even the free marketers that high deductibles only impoverish Americans, that "skin in
the game" does not make people better shoppers for the highly technical world of medicine, that
price transparency is essentially worthless if nobody is comparison shopping while they are bleeding
out from every orifice, etc.
Medicare for All is arguably catching on. Bernie Sanders poll numbers have not taken a dive
with this promise and the sputtering Obamacare is only putting more fuel to this fire. Hillary's
tax scare attempt will turn flat on its face. People know bad value when they see it, and the
current market based health reform is failing into the predictable death spiral. View Bernie's
ascendency as evidence that the American people think health care is a right and it is time to
fund it that way.
Is the argument here that it was necessary for millions of people to suffer from lack of access
to affordable healthcare, and tens of thousands to die, to teach us a lesson, because designing,
advocating for, and rapidly deploying a simple, effective single payer system that would bring
both immediate and long-term benefits that would silence even its would-be detractors is impossible
even to imagine? This is why Democratic Party and Obama cheerleaders have no credibility anymore.
Also, while it's great that Sanders is bringing attention to this topic, it's not surprising
that people are responding favorably People have been polling in favor of a Medicare-type single
payer program for decades.
Americans have not and will not "do the right thing" on this issue because the entrenched interests
that are making money off of the current atrocity that passes for a healthcare system are too
strong to displace. Europe got single payer after WWII because the only institution in society
left with access to money was the State, so doctors and hospitals after the war were going to
sign on for socialized medicine because societies at large were destitute. Whatever the government
will pay is better than grandpa's watch (if some conquering army hadn't stolen it) or a chicken
(ditto). Until this situation comes into being here in the USA we're not going to see single payer
tax-based healthcare.
Your argument would make sense if Canada, which, like the U.S., never suffered the same WWII
devastation as Europe, hadn't managed to build a national single-payer health system.
And let's not forget the medicaid clawback provisions for those between 55-65. If you apply
for Obamacare, and your income level is below a certain threshhold, you are not eligible for subsidies.
You are placed into medicaid.
However, for those in that 55-65 age bracket, there is an estate clawback provision that effectively
acts as a lien on your estate: once you die your assets will be seized by the state to satisfy
all medicaid provided healthcare expenses.
Prior to Obamacare, in order to qualify for medicaid, not only was there an income requirement,
but your assets also had to be below a certain, very low, amount. With Obamacare however, the
asset requirement is waived for those in that age bracket.
What happens? Many who now are eligible for medicaid via Obamacare will now own a house as
their primary asset of any significance. But once enrolled, that house will be sold on the insured's
death to pay medicaid. I would assume that in states that have privatized medicaid, these sums
will also include all premiums paid by medicaid on the insured's behalf-even if no claims are
ever filed.
If that's not bad enough, under Obamacare to satisfy the law, the consumer is forced into this
by the mandate. There is no choice. Beyond that, if the insured had an income level a few dollars
higher, he/she would be eligible for subsidies which, of course, need not be paid back on the
insured's death.
Clawback provisions, though with many exceptions particularly for those under age 55 have always
been required under medicaid, but now medicaid enrollment will be required by law with actual
assets available.
In terms of the assets issue, my comment is applicable to those states that have adopted the
expanded medicaid features of Obamacare. As mentioned by a poster in Mississippi, states that
have not, still have the old rules on having virtually no assets in order to qualify.
I have seen this stated here on many occasions, over the course of the OCare debate. While
the law seems to give authorization to clawback, in my state it only seems to have been used for
nursing home and other long term care. I can state from my experience, I was never queried about
assets, and was qualified only on income. I just lost the person with whom I have shared my life
for 30 years, and her assets, went to her daughter without any claim from the state. Hers was
an expensive battle with cancer, and did rack up a pile of charges. ( In my state, Medicaid is
paying a private insurer to cover Medicaid patients). I have been reading here for a long time,
rarely posting, I tend to agree mostly with the view here, but this seems to be widely different
between states. I have no issue with Yves or Lambert on this, they have done yeoman work trying
to get to the bottom of these issues. Just felt I needed to weigh in for the sake of completeness.
Yves and Lambert you have my email if you want to discuss my experience, it is all to fresh a
wound to discuss in this public forum.
No argument that Obamacare has some serious problems. But placing ALL the blame on the President
seems excessive. Even if he had come out strongly for single payer, there are more than enough
DINOs in Congress in thrall to Health Care, Inc. to have prevented its passage. And the Republicans
would have dialed up their anti-reform propaganda to new levels of hysteria (Remember the anti-Hillarycare
saturation media campaign? I'll bet Obama does.)
When Obama was inaugurated he had more political capital in his pocket than any president in
recent memory. The repubs were on the ropes.
Sure, the repubs could have gone all out in opposition, but as another poster mentioned Obama
could have gone all out as well and blitzed the country. And in the first few months of his presidency,
my bet would have been on him more than on the repubs.
Of course he did nothing. And to say he did nothing because of fear of the repubs at that point
is silly. He empowered the repubs. He didn't even pretend.
Even if he had come out strongly for single payer…
Oh, but he didn't! If pigs had wings, perhaps they could fly? He could have, he didn't even
pretend (like he did with closing Gitmo). Oh, concerned about his legacy? No problem, $peaking
fees from insurance companies, pharmacos, $eat on bds of directors, his future will be golden!
Hello. "Leaders", elected or otherwise, sell out locals to corps = banana republic.
"All health insurance plans purchased through Covered California must cover certain services
called essential health benefits. These include doctor visits, hospital stays, emergency care,
maternity care, pediatric care, prescriptions, medical tests and mental health care. Health insurance
plans also must cover preventative care services like mammograms and colonoscopies. Health insurance
companies cannot charge copayments, coinsurance or deductibles for such services."
By taking that out of context, you've considerably overstated what Covered California covers.
Just as in the rest of the US, the "metal levels" have the same meaning. For instance:
Bronze: On average, your health plan pays 60 percent of your medical expenses, and you pay
40 percent.
This is the language from their "Essential Health Benefits" section:
Essential Health Benefits
All health insurance plans now share some common characteristics. The Affordable Care Act
requires that all health insurance plans offered in the individual and small-group markets
must provide a comprehensive package of items and services, known as essential health benefits.
These benefits fit into the following 10 categories:
Ambulatory patient services.
Emergency services.
Hospitalization.
Maternity and newborn care.
Mental health and substance use disorder services, including behavioral health treatment.
Prescription drugs. For more information about prescription drug benefits, visit the page Prescription
Drugs.
Rehabilitative and habilitative services and devices.
Laboratory services.
Preventive and wellness services and chronic disease management. For more information about
preventive services with no cost sharing, click here.
Pediatric services, including dental and vision care. Dental insurance for children will be
included in the price of all health plans purchased in the exchange for 2015.
The requirement for insurance plans to offer essential health benefits is just one of many
changes in health coverage that began in 2014.
So this is just ACA boilerplate. I do recall reading that Covered CA does require some services
be provided irrespective of the deductibles (beyond the ACA-mandated preventive care items like
mammograms, which separately are a bad test), but after 10 minutes of poking around the Covered
CA site and other Googling, I can't find any evidence of what those other services might be. I
thought it was at least a doctor visit or two, but I can't even find that.
And 75% of Covered CA plans have narrow networks, compared to 41% for the US as a whole, which
among other things means you might not be able to get a specialist you need:
Obama NEVER tried one iota to go for Single Payer. Nada, Zip, Nothing.
Ergo, I place ALL the blame on Obama. IF he had tried even a teeny tiny bit, I could perhaps
place some blame elsewhere. But factual reality refutes that.
I also do recall the POTUS taking Dennis Kucinich up in Air Force One, and when they landed,
suddenly Kucinich had changed his mind and was (reluctantly in my viewpoint) giving an thumbs
up on ObamaCare. Kucinich was the longest hold out advocating for Single Payer. Obama basically
took him to school and forced him in some way to STFU and say Obamacare was the best.
Baloney. Obama sold us all to BigInsurance, BigPharma, BigHospital, BigMedDevice, and I'm sure
he was handsomely rewarded.
This one, imo, is all on Obama. It was what he wanted, and it's what he now touts as being
this very great thing, which it's not.
No amount of dem. or repb. BS will ever persuade me to participate in national politics again.
obamas handling of the ongoing financial and health care crisis finished it for me.
It's so clear to me where were at. The corruption is sickining. EVERY DAY the stories. I keep
thinking…."all the kings horses and all the kings men couldn't put Humpty back together again."
Read The Archdruid Report for some insight. Everybody wakes up sooner or later.
In this life or the next
Yes, definitely better to give up without a fight. Have you noticed that in spite of what is
essentially a media blackout Bernie is likely leading in the polls? As to your opening statement
"No argument that Obamacare has some serious problems" you admit to ACA shortcomings, maybe you
would like to offer up some of what you see as good aspects of the ACA? Further, "there are more
than enough DINOs in Congress in thrall to Health Care, Inc. to have prevented its passage. "
there was and is a DINO in the oval office "in thrall to Health Care, Inc." who made no other
option impossible. So much for the vaunted "free market" The ACA was designed and implemented
as socialism for the 20% (h/t Lambert and others who have noted the upper class and their minions
occupy the top quintile) whose medical care was getting too expensive, and whose medical (device,
pharma patents, and insurance co.) investments were not being supported by demand, so the ACA
created demand for them. Medicare for all, and get rid of the clawbacks, I personally would rather
chromex's heirs get his assets rather than Blackstone, thank you.
I notice that Crude Earl is tempting $30 and copper is at $1.96/lb, looks like some demand
problems there, as well. Maybe we should mandate that everyone must purchase gasoline even if
they don't have a car, and mandate that pennies will once again be made of copper? ka-ching!
You jest, but in many late medieval and early modern Italian city-states there were ruthlessly
enforced minimum consumption levels for salt. Prior to refrigeration salt was more of a food preservation
necessity, but the huge consumption taxes placed on salt made them a fiscal necessity as well.
Our word salary derives from the fact that so many government officials were paid from
the revenues collected through salt taxes.
The much-hated gabelle in pre-Revolutionary France was a salt tax!
I doubt you're really interested in a discussion, but here are a few very good things about
Obamacare:
1. Elimination of pre-existing conditions as a reason for being refused coverage
2. Requirement that insurers spend at least 80% of their revenue actually paying benefits
3. Preventive care must be free
4. Expansion of Medicaid (where permitted by states) brings coverage to millions of previously
uninsured
5. Standardization of plans makes is possible (if not easy) to compare them
And this is my opinion, but I don't think it would have been possible to get Medicare for All
through Congress, even with Democrats nominally in control, for the reasons already stated.
Anyway, my whole point is that Obama doesn't deserve ALL the blame. Are you arguing that the
public and Congress were ready and willing to enact single-payer, and Obama somehow prevented
it?
1. Pre-existing condition with the caveat that you must live in an area served by a medical
establishment that specializes in your possibly rare illness.
2. 80% Yay! It's almost like Christmas! …. Cold comfort to those who must cough up $10,000
or more before getting any benefit from trom their policy at all.
3. Preventative care must be free. OK. So the $10,000 get's them a colonoscopy and a glucose
meter.
4. Expanded Medicaid … In the states where it happened, anyone over 55 years old subject to
an undisclosed clawback of benefits from estates. Wow.
5. I cannot imagine how you come up with the comparison justification. People have to sign
up for plans without final commitments of which doctors or hospitals are included. And even then
they are subject to change!
"Democrats nominally in control" … This is a pure deception. They had overwhelming majorities
and wildly popular President. Do you seriously think that if faced with Obama's shaking finger
and an enticing promise, that any Democrat would have defied him during those first 100 days.
I laugh at the thought. He could ave gotten Expanded Medicare for All passed in those first 100
days with one hand tied behind his back.
Thanks for responding. Yes it's good that pre-existing conditions no longer can be refused
coverage,but one still needs to be able to afford coverage, so not being refused is not the same
as receiving care, no? Your second point also has some merit as it appears intended to contain
profiteering, but as one can see from martin shrkeli there's nothing stopping the greater healthcare
marketplace from increasing costs, so the 80% becomes ambiguously beneficial. I did not know preventative
care is free, but if that means as implied by another comment colonoscopies and other rather invasive
procedures that might be seen as a cash cow with once again ambiguous benefits to consumers, really
they are actually insureds, not consumers, as the prices are beyond peoples ability to pay, only
insurers can ably do that, so the consumer is consuming insurance not care, I'm arguing for a
gov't insurance and appreciate your opinion that it couldn't have been pulled off, as I think
you are aware that my opinion is that they not only didn't try, indeed the executive branch stood
between private sector healthcare industries and reform in the same way it stood between the banksters
and those pitchfork wielding crazy people. Whatever your feelings about all that saving the economy
stuff, it was largely and in many aspects a giveaway to people who were on the brink of disaster,
a little more give and take would have been appropriate and the hope and change mandate provided
the executive with considerable clout. Also, the medicaid expansion is a wolf in sheep's clothing
as the clawback is regressive and punishes low income people as well as some probably good sized
portion of people who will find themselves unceremoniously dumped into medicaid when their insurance
and other medical bills drive them into financial distress. Lastly, the standardization of plans
was in fact useful for me to figure out i couldn't afford it without taking to much time. I'll
dilute my criticism of the president to be more inclusively the executive branch and their collective
agenda, but basically the O man is the CEO so gets to be the hero, or the goat…
As Chromex notes, Obamacare "coverage" is high-deductible catastrophic, so all day-to-day "care"
is paid for out of pocket. But just try finding out how much a procedure costs… I needed an MRI
on my knee, and it took three phone calls to find out how much I would be paying for the procedure.
First you need to know the exact billing code for the procedure, which means you need to find
the person in the doctor's office who is anointed in the mystical realm of billing codes; then
you need to call the insurance company customer service rep, who is initially mystified that you
are actually trying to find out how much something costs; then you (hopefully) transferred to
someone in the billing department (who has never spoken to an actual patient before); and finally,
if you are lucky, in two or three weeks you will revive a letter from another anointed person
giving the actual out of pocket cost of the procedure-which will probably be different after the
fact as "adjustments" are made between provider and insurer.
If we had to buy anything else in this fashion, we'd all be naked, starving, and out-of-doors.
I recall seeing a stat that the median adult net worth of USians was only US$37K, whereas in
Canada it is US$80K. I wondered if the primary reason for the huge difference, is the presence
of Canada-style MedicareForAll in Canada. It appears the US health system bankrupts you rapidly
as in literal medical bankruptcy as per indivduals' examples in the "Sicko" documentary"' or bankrupts
you slowly, as in these crapified ACA policies that charge ~$12K/yr before paying for anything
besides the annual physical exam even within your "narrow network".
Yves, are you aware of any economist study which estimates the differential in financial net
worth between barbaric USA & civilized Canada?
Apparently what the masters of Canada can't extract through healthcare debt, they do it through
astronomically high real estate prices, exceeding our bubble high of 2007. Though there are signs
of deflation, tiny 2 bedroom bungalows in Winnipeg–depressed Canadian flyover country–go for $300K.
The same dump in Minneapolis is yours for $175K. And that's comparing economically challenged
Winnipeg with relatively prosperous Minneapolis.
Yes, not paying $1200/month in health insurance premiums can go to that overpriced Canadian
mortgage, but that's sort of my point.
And to ward off some comments–I am in no way stating that Canada's national health program
causes high housing costs.
America is exceptionally wack & Crapified (c) Yves, as far as life for the 99%ers probably
in the lowest quintile within the OECD, even when including the don't-really-belong members like
Mexico & Turkey. Meanwhile Murica, from everyday people to the elites, drink Murican Exceptionalist
Kool-aid on how Murica is Always The Best, no need to ever learn from any other nations on anything.
I wonder if the "net present value" of money/time/stress cost of emigrating to a civilized
nation like Canada for those USians fortunate enough to have a chance of doing so, is likely to
be much less than the equivalent money/time/stress cost of living an entire life in the US & having
to deal with the US Sickcare Mafia.
I've found that when I talk to people about health care and health insurance; they're very
defensive and proprietary about whatever random solution they've been able to cobble together
In my limited conversations I've noticed that, too. I've been left wondering if it is hard
to for them to give a clear answer since they've had to engage in guessy speculation about what
they, and their families, might come down with, and they end up having to imagine awful stuff
and then discount the possibility of it occurring, so too bad for little Susie if awful occurs.
Trudy Lieberman has given emphasis to the absurdity of asking people to bet on their health, and
I'm guessing it's not just a matter of feeling embarrassed about weak actuarial skills.
Talking about how you coped with Obamacare gives a clear insight into your personal finances,
something a lot of people are hesitant to discuss.
When I was young I was taught never to ask a rancher how many head of cattle he ran, because
it's no different that saying, "Hey, How much money are you worth?"
So where do we go from here? Help the republicans repeal it? Fix it? Frankly I don't know.
We don't have a congress to fix or replace it -even if Sanders wins. I think it helps some people,
mostly those on Medicaid. So repealing it doesn't make sense unless it can be replaced. Even saying
this is a marketplace is an outright lie. These bastards are just stealing from us all. Rock and
a hard place. Sanders is the only hope and that at times seems vanishingly small.
When Obama took office, The United States National Health Care Act, HR 676 , for a
single-payer system of expanded Medicare for All, was in the House of Representatives. If I remember
correctly, it had over 100 Democratic Congresspeople co-sponsoring it. Part of the Obama administration's
efforts on its own health insurance bill were aimed at getting the bill withdrawn.
Thanks for that reminder. Reading the recent book, American President (from Teddy to Bill)
helps one's recall considerably-telling contrasts between Presidents who knew how to pass legislation
and the flukes (if assassination can be called a fluke, i.e. Devil's Chessboard) that brought
them our way against those who didn't. For instance, LBJ compared with JFK, who had enough legislative
service to learn a thing or two if he were interested, that is.
Too bad the book's so damn thick-well written and lively though it may be. Voters not likely
to read it. Should though.
Lots of arguing and different thoughts, but one primary fact remains. Obama was a bald-faced
lier from the get-go, and has remained true to that principle. He hasn't really tried hard to
question that. The amount of damage done to this nation during his tenure amounts to that
amount perpetrated by a traitor. Just being bad was "W"; this is actually far worse.
Lots of arguing and different thoughts, but one primary fact persists. Obama has been a
bald-faced liar from the get-go, and has remained true to that principle. He really hasn't
tried hard to dispute that. The amount of damage done to this nation during his tenure
amounts to that amount perpetrated by a traitor. "W" was just bad; This is far worse.
Now, Kentucky being Kentucky, the motives here may be such that it is difficult for critics
of the ACA to claim as any kind of 'win' – would any of our Kentuckian readers care to comment?
"... The world is awash in blood because two sociopathic brothers (Dulles Brothers) took over US foreign policy and eventually killed a President. ..."
"... There is reasonable possibility that the decision by the Saudi dictatorship to execute the high profile Shiite Sheikh Nimr may have been motivated, at least in part, by the desire to deflect the probability of retribution by the Shiite-hating Islamic State since the majority of the 47 executed along with Nimr were comprised of violent, hard-core Sunni devotees of ISIS. ..."
"... No political system is exempt from corruption and in my opinion this outcome might even be somehow inexorable due to the nature of a state based polity. ..."
"... there is a conflict at the top in saudi arabia and only a matter of time where one or the other goes? it seems that since Mohammad bin Salman Al Saud was given the position of 2nd in command in sa (and minister of defense responsibility), a lot of shite has hit the fan... this began with the war on yemen in march 26 2015 and continues on in everything else ..."
"... Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force ..."
The BS nuclear deal between US and Iran was to get Iran to massively reduce its nuclear capabilities,
which except for a war which the US is no way near ready for, So sophisticated subversion and sanction
pressure was used instead.
And those corporations wanting access to Iran now what access to extract from Iran, not contribute
to it's economy.
All the huffing and puffing by the Israeli state terrorists and Saudi tyranny about that deal,
simply betrays their brutal idiotic methods, compared to more sophisticated methods to the US empire
is capable of.
And The US already set up the war showdown between Iran and Saudi Arabia, with its divide and
conquer policy, and its massive sales of weapons to the Saudi tyranny. That war is just A matter
of time. It's proxies first and then it's full scale engagement between those two states.
Unless you know something and are not sharing this article is speculation. Arming the Houthi's
would, in my opinion, be about as intelligent as was arming the Taliban in the 1980's. The armed
Houthi's may take care of the Saudi's (just like the Taliban took care of the Russians in that
case) but then who would take care of the Houthi's? and what other havoc would they cause? Different
players here but the tactic would be similar and have the same potential of backfiring in the
long run.
B, from what you are saying your 'smart move by KSA' is looking more and more like another dumb
move by KSA... If the Saudis had executed just 'al-Qaeda types' and put out a press release showing
how they are cracking down on terrorism the kingdom would be attracting support from their allies
right now--"Those Saudis are brutal but at least they know how to get the job done." Of course,
it's unclear how much right wing/Islamic State backlash they might have gotten domestically but
I suspect it would have been minimal as long as the unofficial KSA paychecks to the terrorists
kept coming.
There is another reason why Saudi Arabia created a crisis just after the killing of Alloush.
Saudi Arabia has failed to set a serious Syrian opposition group. It has just lost its strongest
ally, Alloush, the leader of the militias it has been supporting for years. It now worries that
the other side, the Syrian government will win an overwhelming diplomatic victory if the planned
meeting in Geneva takes place. Therefore it is doing all it can to prevent that meeting to happen.
The execution of Sheikh Nimr and the subsequent rupture of the diplomatic relation with Iran is
the first move. More of these desperate gesticulation are necessary. But as they'll fail to change
much of Iran and Russia's determination to move on on Syria, it will only confirm to the whole
world that it is not Bashar al Assad and his government that are weak, isolated and on the defensive,
but rather Saudi Arabia and its inept and amateurish leadership.
#12 --
""Saudi Arabia has failed to set a serious Syrian opposition group. It has just lost
its strongest ally, Alloush, the leader of the militias it has been supporting for years. ""
good, excellent point ... this execution could simply have been payback ... and/or "dog ate
my homework" excuse providing for why they're going to, say, no-show in Vienna ...
It could be that the killing of Sheikh Nimr is to the Saudis what the shooting of the Russian
plane has been to the Turks: a provocative blunder with unexpected consequences.
The two Sunni leaders, Erdogan and King Salman are very close to loose the 4 years old game of
toppling Bashar al Assad. In these desperate moves, are they hoping to reshuffle the cards by
provoking Syria's allies?
They are Quahir1 missiles. While the Yemeni Forces claim they are upgraded , obsolete Soviet
ballistic missiles, re-engineered in Yemen,
Visual identification suggests that they are ancient, obsolete SAM-3 antiaircraft missiles,
( which the Yemen Army had thousands), with a new warhead and a guidance system conversion to
make them ballistic missiles.
To date, Iran has supplied nothing to the Ansrallah Movement, other than kind words,.....
And a single shipment of Humanitarian aid to Yemeni NGO's.
Sunni Islam is actually more democratic than Shia Islam. The Wahabist strain is just such a huge
departure from traditional Sunni values. I wish I saved all my conversations with a Muslim friend
about these issues. We boiled it down to making a comparison that Christians can understand. Sunni
Islam is similar to Protestantism is that it is highly decentralized. Anyone that reaches that
status of Iman (Minister) can issue a religious ruling (fatwa). Shia are similar to Catholics.
The Grand Ayatollahs are bishops but in the Iranian government the Grand Ayatollah is the Pope.
The Wahabist are....I do not know how to properly describe them.
Sunni have a natural inclination to a democratic government (I'm not saying that Shia do not,
1954...). Western Imperialism has prevented every moderate attempt. The only place left for Muslims
to organize is in radical religious groups. All other modes of reform have been destroyed. We
are all witnessing the children of the Dulles era CIA The world is awash in blood because two
sociopathic brother's (Dulles Brothers) took over US foreign policy and eventually killed a President.
I still find it very interesting that everyone seems to think that these "smart, stupid" whatever
you want to call them are actually KSA independent choices
Lol they are flying the worlds most expensive toys in Yemen and getting their asses handed
to them. Trust me when i tell you this. Saudis and Emirate Arabs in general are nothing but Bedouin
desert dwellers or as the line from titanic goes "new money"
If people are too blind to see the British/US/Israeli hands in this then go ahead and keep
debating about the smoke screen or the true colour of wool being pulled over your eyes.
Saudis and Bahrain are not independent states. They are military bases for the US against Iran,
Rusia, China grabbing control of the rest of the middle east.
Executing "rabble rousing" Nimr , will in turn be the downfall of KSA and all these "Analysts"
think tanks and what not will finally realize that the ME is not what it always seems
"An Iraqi official blamed the Islamic State group on Monday for the bombing of two Sunni
mosques in a predominantly Shiite city in southern Iraq the previous night, saying the militant
group seeks to stoke sectarian tensions,"
AP reports. ISIS
"did this to inflame sectarian
strife in the country," provincial security official Falah al-Khafaji contends.
ZeroHedge speculates:
Taking it a step further, one has to wonder whether there's a larger plan here. That is,
if we assume ISIS, like the multitude of other Sunni extremist groups operating in the region,
is taking its cues from handlers and benefactors, it's not difficult to imagine that "someone"
could be attempting to create an excuse for an intervention in Iraq.
Save that date -- the next installment of Syrian peace negotiations:
"[Staffan] De Mistura is due to launch peace talks between Assad's government and the opposition
in Geneva on January 25, but it remained unclear whether the Iran-Saudi crisis would have an
impact on that plan.
De Mistura has flown to Ryadh and is due to then visit Tehran ... Yeah, I can't see these two
parties sharing a table ....
""UN Secretary-General Ban Ki-moon said he was "deeply dismayed" by the Saudi execution of
47 people including prominent Shiite cleric Nimr al-Nimr, who has been critical of the Sunni
royal family and was a driving force behind anti-government protests in 2011. snip
In his talks with Saudi Foreign Minister Adel Jubeir, Ban urged Saudi Arabia "to renew its
commitment to a ceasefire" in Yemen after the Riyadh-led coalition announced on Sunday that
it was ending the truce with Iran-backed rebels in the country.[yemen]
The U.N. envoy for Yemen, Ismail Ould Cheikh Ahmed, was to hold talks in Riyadh on Wednesday
to push for a renewed ceasefire.
@12 virgile '... it is not Bashar al Assad and his government that are weak, isolated and on the
defensive, but rather Saudi Arabia and its inept and amateurish leadership.'
Yes. Solid observation. How come their best friends in USrael didn't warn them of that particular
aspect of their stupid act?
@24 AEF '
The world is awash in blood because two sociopathic brother's (Dulles Brothers)
took over US foreign policy and eventually killed a President.
'
Ain't that the truth. Because of those two and their succeeding stream of 'investment bankers'
at the CIA
@33 SS from your link 'UN Secretary-General Ban Ki-moon said he was "deeply dismayed" by the
Saudi execution of 47 people including prominent Shiite cleric Nimr al-Nimr, who has been critical
of the Sunni royal family and was a driving force behind anti-government protests in 2011.'
Ban Ki-moon is a US poodle, so this further indicates to me that USrael wouldn't mind at all
if there were a change in management in Saudi Arabia ... and if the place goes up for grabs, why
they - NATO - will just have to step in to provide 'stability'.
Iran is not known to allow irate citizens to run amuck so it might be a planned Basij attack
on the KSA Embassy, they certainly came prepared to torch the place and met little resistance
from Iranian security.
Would the Wahhabis be equivalent to a Christian Reconstructionist movement gone militant with
state funding?
@39 ATH,
I don't see how we can say policies are decided at the ballot box unless they can recall their
"representatives" as easily as they can elect them. It's part of the weak-mindedness of liberal
society that management somehow equals democracy.
"Iran is not known to allow irate citizens to run amuck so it might be a planned Basij attack
on the KSA Embassy..."
The same can be said about any country in the world and there is no need for a militia to do
that. It is a well known facts, maybe not by you but among those who are following the real news,
that the more than 10 or so Iranian embassies and consulates ransacked et pillaged during the
80's in the European cities were all done under the complacent eyes and noses of the security
services of the protecting states. In actuality I believe doing it the Iranian way, i.e. keeping
a façade of deniability, is more honorable that what the European state did... and for some are
still doing.
I'm uneasy about Rouhani's rapprochement with the usurious Western financial sector[1], but
from a systems standpoint I'm more worried about corruption in the assemblies than the figureheads.
The usual failure mode of republics is that there is nothing binding the alleged "representative"
to the popular will post-election and no effective means to stop disloyalty in progress. In the
US, especially, we've had ample experience with "representatives" who, as an assembly, invariably
take on some sacred duty of delivering concrete material benefits to elites while delivering excuses
and pat stories (according to their Party's mythology) to their constituents. The question always
on my mind is, how to prevent the color of public interest from enabling disproportional private
benefit?
It could be that I'm not thinking Islamically enough with respect to the roles of citizens
within an Islamic society. But if Iran has a system that guarantees sturdy alignment of policy
outcomes with citizens' collective interests, even against vested interests of state officials,
I'd love to hear it.
[1] Islamic finance on Wall Street would mean dropping shock troops onto one end and chopping
every right hand down to the other end. I doubt I will be seeing this in the near future.
I'm uneasy about Rouhani's rapprochement with the usurious Western financial sector[1], but
from a systems standpoint I'm more worried about corruption in the assemblies than the figureheads.
The usual failure mode of republics is that there is nothing binding the alleged "representative"
to the popular will post-election and no effective means to stop disloyalty in progress. In the
US, especially, we've had ample experience with "representatives" who, as an assembly, invariably
take on some sacred duty of delivering concrete material benefits to elites while delivering excuses
and pat stories (according to their Party's mythology) to their constituents. The question always
on my mind is, how to prevent the color of public interest from enabling disproportional private
benefit?
It could be that I'm not thinking Islamically enough with respect to the roles of citizens
within an Islamic society. But if Iran has a system that guarantees sturdy alignment of policy
outcomes with citizens' collective interests, even against vested interests of state officials,
I'd love to hear it.
[1] Islamic finance on Wall Street would mean dropping shock troops onto one end and chopping
every right hand down to the other end. I doubt I will be seeing this in the near future.
"Pariah status" or "rebuilding" a presumed broken relations "with the world" is what you have
been made to believe by the MSM. Iran is actually reducing tension in the nuclear dossier to better
work out its strategic realignment that are based on sovereignty and political independence. The
first sign of which has already appeared in a strategic alliance in Syria.
There is reasonable possibility that the decision by the Saudi dictatorship to execute
the high profile Shiite Sheikh Nimr may have been motivated, at least in part, by the desire to
deflect the probability of retribution by the Shiite-hating Islamic State since the majority of
the 47 executed along with Nimr were comprised of violent, hard-core Sunni devotees of ISIS.
From the Saudi prism, the orgy of executions was on the one hand, a performance intended to
downplay growing criticism of the kingdom's funding of the globally despised ISIS and on the other
end, an act of appeasing ISIS by killing this highly popular Shiite leader. Nimr's execution could
have been intended to mitigate the group's rage and reduce the potential to target Saudi institutions
instead of Shiite mosques as they have done in the past.
This sounds off topic but for the sake of a reply,
No political system is exempt from corruption and in my opinion this outcome might even
be somehow inexorable due to the nature of a state based polity.
The difference between the
Iranian political scaffolding and the European systems in particular but also, at the limit, the
American one is that the former is based on a younger society and still in formation while the
latters have already passed the middle-age period in their life cycle.
And to answer your question: "how to prevent the color of public interest from enabling disproportional
private benefit?" the only way for this to be possible in my opinion is the breakdown of states
with globalist reach into local and regional states with decision-making being directly made by
citizens... a Helvetic kind of confederation.
Not to forget, nearly a thousand Iranians died during the hajj in Mecca:
The
2015 Mina Crush disaster
has increased tensions in the already-strained relationship
between Saudi Arabia and Iran, led to calls from politicians in a number of Muslim nations for
changes in oversight of Mecca and the Hajj, and bolstered opposition to King Salman among the
senior members of the Saudi Arabian royal family.
how many think like
this author - michael krieger
from sept 30th 2015, that
there is a conflict at the top
in saudi arabia and only a matter of time where one or the other goes? it seems that since
Mohammad
bin Salman Al Saud
was given the position of 2nd in command in sa (and minister of defense
responsibility), a lot of shite has hit the fan... this began with the war on yemen in march 26
2015 and continues on in everything else
..
i don't know who is doing what inside the sa hierarchy, but it sure comes across as chaotic
and troublesome.. regime change is a distinct probability! which guy goes? the old guy, or the
young guy? scary either way..
"There have been direct concerns raised by US officials to Saudi officials about the potential
damaging consequences of following through on the execution, on mass executions, in particular,
the execution of" al-Nimr, White House spokesman Josh Earnest said on Monday.
Deputy Prime Minister Numan Kurtulmus told a press conference on Monday that the execution
did not have Ankara's support.
"We are against all instances of capital punishment, especially when it is politically motivated,"
he said.
Both had meetings with the Saudis before their mass beheading festival and could have saved the
Saudi junior woodchuck if they wanted to. I wonder what's in the collapse of the present Saudi
regime for them? Control of orphaned Saudi oilfields in the one case and of orphaned Saudi Mamluk
terrorists in the other?
Nor is this mere speculation. Saudi Arabia for some time has been trying to provoke Iran. First
there was the Saudi military intervention in Bahrain. Then there were Saudi efforts to topple
the Assad regime. These were followed by the bombing of the Iranian embassy in Beirut in 2013,
which killed a number of Lebanese as well as Iran's cultural attaché. More recently, during
the Haj ceremonies, Saudi authorities harassed two Iranian youth and a large number of Iranian
pilgrims died as well. The Saudi government, moreover, created many difficulties for Iranian
officials trying to locate, identify, and transfer the bodies of the victims to Iran. And of
course Saudi Arabia launched a full-scale war in Yemen against what it claimed were Iranian-backed
rebels.
Another provocation came last month when Nigerian authorities arrested the country's Shia
leader, Sheikh Ibrahim Zakzaki, and the Nigerian army killed close to a thousand Shias for
spurious reasons. Following Sheikh Zakzaki's arrest Saudi King Salman reportedly congratulated
Nigeria's president for dealing effectively with terrorism (the king's definition of terrorism
apparently extends to the peaceful observance of religious rituals). Meanwhile, the abuse of
the Shias in other countries, notably Azerbaijan, continued as did their indiscriminate killing
by Saudi- influenced groups in Pakistan and Afghanistan, as illustrated by the beheading in
November of a nine-year-old Hazara girl in Afghanistan.
One also shouldn't forget that there's struggle going on between the "Group Abdullah" and the
"Group Salman".
Abdullah was the former king and Salman is the current king of Saudi Arabia. Former king Abdullah
and his "followers" did A LOT OF things to reduce the influence/power of the "Group Salman". E.g.
Abdullah appointed his followers to influential positions.
But now with Salman on the throne, Salman is doing the same thing with his followers. Appoint
as much of followers to influential positions as possible. And it seems the struggle is far from
over.
And Saudi Arabia is in "not the best of financial shapes". No surprise there. A combination
of:
- Falling/Fallen oil prices.
- VERY large military expenses (Yemen, Syria).
- Increased expenses for the saudi population. Saudi Arabia increased payments to its citizens
to bribe them into not revolting during & after the "Arab Spring" in 2011.
- ((Very) large) subsidies for Healthcare, electricity, gasoline.
Recently the saudi government increased the price of gasoline by 50% (!!!!) from 15 cents to
22 cents. Outrageous !!!!!!!!
Aircraft keep falling out of the sky over Yemen quite regularly. They are always described
as the result of 'technical reasons'. That covers a whole range of possibilities from engine failure
to back end of aircraft disappearing after missile strike.
Here is a report on a recent incident (30 Dec) involving a Bahraini F-16.
Thanks for those links, it's been my impression Yemen army/Houthis have no flak capability,
hence the Saudis control of the skies, and the carnage on civilians/damage to infrastructure.
I have read news of Saudi fighter jets downed over Yemen due to "technical failure" as you
mentioned, that could or could not be the Houthis/Yemen army. I certainly hope they develop AA
defenses, as the Vietnamese progressively did, that would help diminish the carnage and will give
the Saudis a pause in their impunity.
To be sure, the Iranian government is a complex organism with many moving parts, and the whole
response likely wasn't planned or coordinated by a single actor. But the result was highly
effective. It showed the Saudis that Iran took the execution as directed toward it. And it
simultaneously gave other countries the cover they would need to side with Iran.
The Americans, rather remarkably, took the Iranian side. U.S. Secretary of State John Kerry
let it be known that he was talking to his Iranian counterpart, Mohammad Javad Zarif. In the
past, a U.S. secretary of state would've reached out solely to the Saudi foreign minister,
not least because there were no official diplomatic ties to Iran. Meanwhile, a former deputy
CIA director, Michael Morell, publicly praised the Iranians for their handling of the situation
in Tehran. This was downright astonishing, given Americans' historical associations with embassy
occupation there.
bqqTo be sure, the Iranian government is a complex organism with many moving parts, and the
whole response likely wasn't planned or coordinated by a single actor. But the result was highly
effective. It showed the Saudis that Iran took the execution as directed toward it. And it
simultaneously gave other countries the cover they would need to side with Iran.
The Americans, rather remarkably, took the Iranian side. U.S. Secretary of State John Kerry
let it be known that he was talking to his Iranian counterpart, Mohammad Javad Zarif. In the
past, a U.S. secretary of state would've reached out solely to the Saudi foreign minister,
not least because there were no official diplomatic ties to Iran. Meanwhile, a former deputy
CIA director, Michael Morell, publicly praised the Iranians for their handling of the situation
in Tehran. This was downright astonishing, given Americans' historical associations with embassy
occupation there.
Let our position be absolutely clear: An attempt by any outside force to gain control
of the Persian Gulf region will be regarded as an assault on the vital interests of the United
States of America, and such an assault will be repelled by any means necessary, including military
force
Can any of you recommend a good blog/site following the events in Yemen? With the media
blackout it is very hard to find out was is really going on on the ground.. Txs.
"... I suppose you could say the migration was engineered in both the Cuban and Turkey cases, with
the US and US/EU/Turkey creating the migrants and Castro and Erdogan, respectively, acting as
gatekeepers. ..."
"... The difference is that the migrants are not Turks, in Erdogan's case, but his prey,
the people of Syriaq. And the people of the EU, of course. ..."
Abstract: This paper presents a case study of the August 1994 Cuban "balseros"-i.e.
rafters-crisis, commonly known as Mariel II, during which over 35,000 Cubans fled the island
and headed towards Florida. This paper argues that Castro launched the crisis in an attempt
to manipulate the US's fears of another Mariel boatlift, in order to compel a shift in United
States (US) policy, both on immigration and on a wider variety of issues. As the end of the
crisis brought with it a radical redefinition of US immigration policy toward Cuba, the paper
further contends that from Castro's perspective, this exercise in coercion proved a qualified
success-his third such successful use of the Cuban people as an asymmetric political weapon
against the US.
... one of the few arrows in Castro's quiver, he used it effectively. The article is about the
1994 Balseros Crisis, but Greenhill recounts : The Camarioca Crisis, 1965; The Mariel Boatlift,
1980; and The August 1994 Balseros Crisis. The Mariel Boatlift was 'the big one' : 125,000 Cubans.
Dwarfed by Erdogan. A million in Germany alone.
I suppose you could say the migration was engineered in both the Cuban and Turkey cases, with
the US and US/EU/Turkey creating the migrants and Castro and Erdogan, respectively, acting as
gatekeepers.
The difference is that the migrants are not Turks, in Erdogan's case, but his prey,
the people of Syriaq. And the people of the EU, of course.
"... "WikiLeaks cables (see below) show that the US has been tracking, and exploiting, the rise of ISIS since 2006, when the organisation first appeared in Iraq as a direct result of the Bush-Blair invasion. Like Pol Pot and the Khmer Rouge, ISIS are the mutations of a western state terror dispensed by a venal imperial elite undeterred by the consequences of actions taken at great remove in distance and culture. Their culpability is unmentionable in "our" societies." ..."
"... The WikiLeaks revelations tell of former French Foreign Minister Roland Dumas' statements on this too. What he revealed is that Britain basically made plans for the Syria disaster years ago. ..."
Saudi Arabia is in dire trouble today as the outcry over recent executions mounts. The execution
of Shia Sheikh Nimr Baqr al-Nimr in the most brutal day of executions in the country in three
decades has now sparked violence across the region. If Saudi Arabia is destabilized, the Middle
East could easily turn into a bloodbath of biblical proportions. This begs the big question, "What
is really behind these apparently symbolic executions?" [...]
[...] In the Shadow of Machiavelli
The best clue as to "who stands behind" this new Saudi-Iran crisis comes to us from the Washington
Post. For anyone still unaware, this Amazon owned media outlet is the perfect barometer of what
is NOT true in the world of international affairs these days. Using "reverse news" psychology
here, the article by Karen DeYoung tells us all we need to know about al-Nimr's execution. If
you will allow me this quote:
"Obama administration officials expressed deep concern Sunday that the abrupt escalation
of tensions between Saudi Arabia and Iran could have repercussions extending to the fight against
the Islamic State in Syria and Iraq, the diplomatic efforts to end Syria's civil war, and wider
efforts to bring stability to the Middle East."
Citing unnamed officials in Barack Obama's administration has become the guiding principle
of corporate media in America these last few years, and the Washington Post misdirects have never
been more transparent than today. This piece is misleading, supportive of Saudi and US disruption
in the region, and anti-Iranian to the extreme. The author continues using another source who
is a "authorized to convey Saudi thinking on the condition of anonymity," if you can imagine such
a conveyance. According to the WP, Saudi Arabia is framed as the only nation "doing something",
and I quote:
"Tehran has thumbed its nose at the West again and again, continuing to sponsor terrorism
and launch ballistic missiles and no one is doing anything about it."
Then BAM! Steve Bezos' newspaper barks the real intent of this propaganda bit bringing Russia
into the fray with:
" Iran, along with Russia, is the leading backer of Syrian President Bashar al-Assad, a
member of a minority Shiite sect, and Riyadh views the civil war as part of Iran's fight for sectarian
dominance."
As I type this from our offices in Germany, US F-15 and F-16 fighters fly overhead in a continuous
stream from the US air base at Spangdahlem Air Base. I mention this only because 2 years ago we
seldom if ever heard fighter aircraft overhead. These days even locals wonder if the flyovers
have a purpose beyond intimidation, or at least some residents have expressed this to me personally.
The current undeclared war of resolve, it bears witnessing and a focus on all these events in
the Middle East. My point being, Riyadh's actions of the last few days are part of an overall
western strategy of unrest. If the Washington Post tells you Obama's White House is worried over
something, you can count on the Washington having been part of the cause of the event. In this
case we see the "never say die" war against Assad and Russia in the works. It is a crazy bit of
irony that WP's editor Karen DeYoung was once quoted as saying; "We are inevitably the mouthpiece
for whatever administration is in power."
Meanwhile, at the newspaper (The Wall Street Journal) owned by billionaire Rupert Murdoch (who
has energy investments in the region) we have another indicative report, or should I say "counter
indicative?" Jay Solomon reports on the weeping sadness of Barack Obama that his non-existent
peace plan for Syria may be derailed by Riyhad's decision to sever ties with Iran. Within this
report the "real" mission of the Saudis, and Washington's current administration is revealed.
I'll rely on another quite to clue the reader. Referring to the John Kerry brokered "plan" the
Wall Street Journal writer inadvertently betrays the Obama administration with:
"Under the deal, Iran in the coming months is set to receive as much as $100 billion in
frozen oil revenues, which could be used to support its proxies in Iraq, Lebanon, Syria and Yemen."
To sum up here, the goal all along has been misdirect from Obama's team. The Iran deal, the
parlaying at various peace accords, all the State Department's efforts have been designed to frame
the United States as peace loving, with the teddy bear John Kerry as a sort of Mother Teresa of
détente. Has anyone noticed yet how every deal the man makes goes south in the end? Now Iran coming
out of decades of useless sanctions is on the rocks, as was planned so it appears. The WSJ piece
further implicates (by inaccuracy) the White House's Machiavellian strategies with.
" As the conflict deepened over the weekend, with Saudi Arabia officially severing ties with
Iran, U.S. officials expressed skepticism over how much influence Washington had in heading off
a conflict based on centuries-old religious divisions."
It is with this, and with the ad nauseam with which mainstream media parrots State Department
rhetoric we find the true backers of terrorism and strife in the Middle East. The statement misleads
readers into believing the situation in the Middle East is "out of the control" of Obama and Washington,
when the reverse is absolutely true. The story goes on to plant the seed of military support for
Saudi Arabia should the situation escalate, which it is certain to with the help of the lame duck
Obama.
When all is said and done, Nimr Baqr al-Nimr was a man of peaceful advocacy for the people
of his belief and his region of Saudi Arabia. There is literally no proof to the contrary, yet
he was summarily executed by a regime notorious for beheading its citizens. The Unites States
of America has not only backed this regime, but has aligned herself in an auspicious manner over
the years essentially using the Saudis as a vassal for regional control. This section of a WikiLeaks
cable damns the Saudis for helping create the mess in Syria and elsewhere:
"The USG engages regularly with the Saudi Government on terrorist financing. The establishment
in 2008 of a Treasury attache office presence in Riyadh contributes to robust interaction and
information sharing on the issue. Despite this presence, however, more needs to be done since
Saudi Arabia remains a critical financial support base for al-Qa'ida, the Taliban, LeT, and other
terrorist groups, including Hamas, which probably raise millions of dollars annually from Saudi
sources, often during Hajj and Ramadan. In contrast to its increasingly aggressive efforts to
disrupt al-Qa'ida's access to funding from Saudi sources, Riyadh has taken only limited action
to disrupt fundraising for the UN 1267-listed Taliban and LeT-groups that are also aligned with
al-Qa'ida and focused on undermining stability in Afghanistan and Pakistan."
Revelations Verse 19:11
The cable is from the US State Department to various offices of the Saudi government, that
of the UAE, Kuwait, and Qatar. This cable, along with dozens of other revelations about the backers
of terror in the world, leaves no room for ambiguity. But what's far more disturbing is the way
Washington, London and to a lesser extent Brussels are portraying current unrest as some type
of religious war. The Christian-Jew-Muslim aspects of these crises are being used to hide the
real cause of corporate governments supplanting rights and freedoms. This is a larger argument,
but the correct one at this stage. What the world suffers from now is a hell bent effort by the
godless of the world (elite bankers) to once again spark crusades for the purposes of strategy
and profit. Most people reading this fully understand this, even though the exact culprits may
be obscure.
The summary of this story is fairly easy to parlay. Saudi Arabia just made a play for the neocons
in Washington, the bankers in London, and for the Tel Aviv instigators who have so far remained
in the shadows in all this. They created a martyr who may well serve their utterly evil needs,
to set the world on fire one more time. Let me leave you with the most damning quote I have yet
found. It is from WikiLeaks, and implicates the Obama and previous US administrations:
"WikiLeaks cables (see below) show that the US has been tracking, and exploiting, the rise
of ISIS since 2006, when the organisation first appeared in Iraq as a direct result of the Bush-Blair
invasion. Like Pol Pot and the Khmer Rouge, ISIS are the mutations of a western state terror dispensed
by a venal imperial elite undeterred by the consequences of actions taken at great remove in distance
and culture. Their culpability is unmentionable in "our" societies."
Make no mistake here, America and Britain created this mess in the world, with the help of
profiting allies like Saudi Arabia.
The WikiLeaks revelations tell of former French Foreign Minister
Roland Dumas' statements on this too. What he revealed is that Britain basically made plans for
the Syria disaster years ago.
What we are witnessing is a last ditch effort to counter Vladimir
Putin's play in the region, and to either win a new Syria partitioning, or else burn the deserts
in total.
This is a world war in the making, and the man on the pale horse seems evident now,
the leader of the faithful and true. God help us all.
Lets not forget that the Syrian refugee migration is a manufactured crisis - as b pointed out early
on when he noted that it fuels calls that
"something must be done!"
about Assad/Syria.
"For the first time in my political career I have heard politicians openly declaring that the
refugees heading to Europe are their method of getting (us) [the EU] to act a certain way,"
Can't disagree with this message from the Iranian Foreign Minister..
"Saudi Arabia can either continue supporting extremist terrorists and promoting
sectarian hatred, or it can opt for good neighborliness and play a constructive role
in promoting regional stability, however; Iran hopes that Saudi Arabia will be
persuaded to heed the call of reason,"
Zarif said that there are indications that some in Saudi Arabia are on a mission
to drag the entire region to conflict; fearing that removal of the smokescreen of the
manufactured Iranian nuclear threat would expose the real global threat posed by
extremists and their sponsors, according to IRNA.
The Iranian foreign minister recalled that those involved in extremist carnage and
most members of Al-Qaeda, the Taliban, ISIL and Al-Nusra Front being either Saudi
nationals, or otherwise brainwashed by petro-financed demagogues, who have promoted
an anti-Islamic message of hatred, exclusion and sectarianism across the globe for
decades.
"... Hawks often "adopt" a faction or government and then fault the U.S. for "failing" to do enough to help "our" side. Refusing to take a side is portrayed as "abdication" of "leadership" or otherwise pilloried as too passive, and the bias in favor of action in our debates helps to make it harder to advocate against taking sides. ..."
"... The U.S. cannot expect and does not receive the sort of automatic support and cooperation from so-called "allies" that many hawks expect the U.S. to provide to them, but it is often assumed that the U.S. would be "abandoning" the so-called "ally" if it chose not to take their side against a regional rival. For some reason, many Americans forget that the relationship with an "ally" exists to advance our interests and not so that our government can indulge theirs in its vendettas and obsessions. When U.S. interests are no longer served by such a relationship (if they ever were), the U.S. doesn't need and shouldn't want to keep it the way it is. ..."
"... But when you live your life with a Manichean Worldview–then you have to pick a side.. because it is always good vs. evil… ..."
"... From a cold realist position, why do we cafe if we keep Saudi oil flowing when we could always turn the Iranian spigots on? From a liberal interventionist position, Saudi Arabia has a far worse record than Iran of foreign aggression, sponsorship of terrorism, and human rights violations at home. If we have to be someone's ally over there, we should be Iran's. ..."
"... That being said, I agree that we should not take sides in a spat between regional rivals, especially when an ancient theological blood feud is at the heart of the spat. ..."
"... Saudi Arabia allows us access to their oil resources on our terms, and to be more specific, Saudi Arabia does us the very kind favor of denominating all of her oil transactions in dollars, requiring every other country on Earth to maintain huge reserves of dollars and US debt. If Iran was in the driver's seat they would never sustain the petrodollar. ..."
"... now would be a good time to disabuse that 30-year-old deputy crown price of the notion that we'll be there for him no matter how audacious and emboldened he becomes. I don't really expect a rational mindset to prevail, of course, but in my mind, that would be true "leadership" on our part. ..."
There is a strong bias against neutrality in our foreign policy debates. Not taking sides in this
or that conflict is rarely taken seriously as an appropriate response. Instead of asking whether
the U.S. should even take a side, it is taken for granted that the U.S. "must" choose one or the
other, and the main debate concerns only how much and what kind of support to provide. This is a
recurring problem in debating the proper response to conflicts inside countries as well as rivalries
between them. One reason for this is that U.S. interests and the interests of another state or faction
within a state are conflated from the beginning, and this is done to make it much more difficult
to recognize that the U.S. doesn't actually have interests in the conflict or rivalry in question.
Hawks often "adopt" a faction or government and then fault the U.S. for "failing" to do enough to
help "our" side. Refusing to take a side is portrayed as "abdication" of "leadership" or otherwise
pilloried as too passive, and the bias in favor of action in our debates helps to make it harder
to advocate against taking sides.
Today's Fareed Zakaria
column
shows how difficult it is for most pundits to do this. Even when arguing for steering
clear of regional sectarian rivalry, Zakaria can't avoid endorsing U.S. support for the Saudis:
In general, the United States should support Saudi Arabia in resisting Iran's encroachments
in the region, but it should not take sides in the broader sectarian struggle.
But it is not possible to support an overtly sectarian Saudi government in its preoccupation with
opposing Iranian influence without being pulled into the "broader sectarian struggle," in no small
part because the Saudis define their resistance to Iran's supposed "encroachments" in terms of religious
sect. The Saudis falsely claim that their war on Yemen is aimed at "resisting Iran's encroachments,"
and the U.S. has been supporting their campaign from the start, and in so doing it is helping to
fuel sectarian hatreds in Yemen and beyond. Zakaria correctly recognizes the pitfalls of being pulled
into sectarian conflicts in the region, but won't acknowledge that the U.S. is caught up in them
because of the support it provides to sectarian governments. He specifically mentions the growing
sectarianism in Yemen, but doesn't make the connection with U.S. support for the Saudi-led intervention
there. Despite explicitly saying that the U.S. shouldn't take sides in "someone else's civil war,"
he approves of doing just that by accepting that the U.S. should keep supporting the Saudis.
One of the most common arguments for siding with the Saudis in their hostility towards Iran is
that they are our "ally," and therefore the U.S. should automatically support the position of its
"ally." This overlooks that the U.S. has no treaty obligations to the kingdom, and ignores that the
so-called "ally" does virtually nothing for us.
The U.S. cannot expect and does not receive the sort
of automatic support and cooperation from so-called "allies" that many hawks expect the U.S. to provide
to them, but it is often assumed that the U.S. would be "abandoning" the so-called "ally" if it chose
not to take their side against a regional rival. For some reason, many Americans forget that the
relationship with an "ally" exists to advance our interests and not so that our government can indulge
theirs in its vendettas and obsessions. When U.S. interests are no longer served by such a relationship
(if they ever were), the U.S. doesn't need and shouldn't want to keep it the way it is.
Prof. Woland,
January 8, 2016 at 1:56 pm
But when you live your life with a Manichean Worldview–then you have to pick a side.. because
it is always good vs. evil…
Ian G.,
January 8, 2016 at 2:19 pm
I pull my hair out when seemingly reasonable people like Zakaria don't even bother asking why
Saudi Arabia is our "ally".
From a cold realist position, why do we cafe if we keep Saudi oil
flowing when we could always turn the Iranian spigots on? From a liberal interventionist position,
Saudi Arabia has a far worse record than Iran of foreign aggression, sponsorship of terrorism,
and human rights violations at home. If we have to be someone's ally over there, we should be
Iran's.
That being said, I agree that we should not take sides in a spat between regional rivals, especially
when an ancient theological blood feud is at the heart of the spat.
jamie,
January 8, 2016 at 3:19 pm
From a cold realist position, why do we cafe if we keep Saudi oil flowing when we could
always turn the Iranian spigots on?
Saudi Arabia allows us access to their oil resources on our terms, and to be more specific,
Saudi Arabia does us the very kind favor of denominating all of her oil transactions in dollars,
requiring every other country on Earth to maintain huge reserves of dollars and US debt. If Iran
was in the driver's seat they would never sustain the petrodollar.
There's also very little question of Saudi regime's oil resources falling in the hands of populist
or democratic elements that might use oil to overtly embarrass or destabilize the United States
- the Saudi's bleed us dry, but subtlety and in a way that US voters are unlikely to punish their
leaders for.
Jon Lester,
January 8, 2016 at 7:13 pm
American neutrality might be the very thing needed to keep the conflict contained, and
now
would be a good time to disabuse that 30-year-old deputy crown price of the notion that we'll
be there for him no matter how audacious and emboldened he becomes. I don't really expect a rational
mindset to prevail, of course, but in my mind, that would be true "leadership" on our part.
"... The Obama administration has since March provided expedited arms sales, logistics support, targeting intelligence, air refueling and combat search and rescue for the Saudi war on Yemen. Its navy helps with the blockade of the Yemeni coast. How can the Obama administration be sharply critical of the Saudi war on Yemen when it provides the critical means for that war? ..."
"... I doubt that we will hear any sharply critical condemnation of that bombing of civilian infrastructure from U.S. officials. ..."
"... In the Saudi-Iran proxy conflicts the U.S. supports and urges the Saudis on because it is in its geopolitical interest . Saudi financed jihadist have been helpful in achieving U.S. geopolitical goals in the 1980s in Afghanistan against the Soviets, in Yugoslavia, in Chechnya as now in Syria against the Russians and in Xinjiang against the Chinese. There is no room for human rights or other concerns within that framework. There is room though for billions of weapon sales and millions given by the Saudis to U.S. and UK politicians as well as for public relations . ..."
"... That is utter bullshit. The U.S. is working on regime change in Syria at least since 2006 . The U.S. is enabling the clear and present danger posed by Islamist terrorists through its alliance with al-Qaeda . It always had and has the choice to cease and desist from meddling in the Middle East and elsewhere to the benefit of the average U.S. citizen as well as to the benefit of the people living in the Middle East. ..."
"... U.S. media lie when they depict the U.S. as a benevolent entity that stumbles through the Middle East and other areas misled in the dark by Saudi Arabia and Israel. It is the U.S. that is the ruthless superpower that solely enables those barbaric entities to exist. ..."
"... The US government is beholden to lobby groups interested in feathering their nests and getting their way. US foreign policy has also been consistent from one presidential administration to the next. ..."
"... The fact that US foreign policy has been consistent from George W Bush to Barack Obama could say a great deal about the style of Obamas presidency. What has Obama been able to achieve in the 8 years he has been POTUS that has been positive and which has given his presidency a particular distinction and flavour that represent the mans character and personality? I submit not much at all. The impression I get (btw, I live on the other side of the Pacific Ocean from the US) is that Obama is a weak leader who has never been able to control and rein in particular members of his cabinet like his previous Secretary of State, much less the ideologue she brought with her who planned and carried out the coup that deposed President Yanukovych in Ukraine in February 2014, and who handpicked the fellow who is currently that nations prime minister. I might also suggest that George W Bush was a weak leader who did as he was told. ..."
"... The neo-cons are the establishments political death-squads, the sinister arm of the executive who resorts to them whenever the establishment/Deep State need to eliminate anyone considered an enemy of the empire, followed by an installation of puppets. ..."
"... Neo-cons are in close coordination with CIAs clandestine/black operations branch, working together all aspects of any operation at hand, the CIA with the operative/military goons, the neo-cons with the political crooks. A typical example was in Banderastan, where the CIA had been actively recruiting/training the nazi bastards for years, ready for the Maidan, ehem, revolution, with the neo-cons putting together the political puppets ( I think Yats is the guy ) who would become the facade of the nazi takeover. ..."
The "western" public,
especially in Europe
, now prefers good relations with Iran over relations with Saudi Arabia.
It is a natural development when one considers that jihadi terrorism is a
real concern
and that the
people involved in most international terrorist incidents follow variants of the Saudi spread Wahhabi
ideology.
This is now developing into a problem for the U.S. administration. Saudi Arabia, as other Gulf
statelets, is a U.S. client state. Without U.S. support it would have ceased to exist a long time
ago. The Saudis are made to pay for U.S. protection by buying overpriced U.S. weapon systems for
tens of billion dollars per year. They also finance joint projects like the war against the Soviets
in Afghanistan and currently the U.S. regime change war on Syria.
U.S. relation with Iran have become somewhat better due to the nuclear deal. But the Islamic Republic
of Iran will never be a U.S. client state. Seen from the perspective of the global strategic competition
it is in the same camp as the U.S. foes Russia and China. Unless the U.S. ceases to strive for global
dominance it will continue to support its proxies on the western side of the Persian Gulf rather
then the Iranians of the eastern side.
The changed public view, very much visible after the recent Saudi execution of Nimr Baqr al-Nimr,
necessitates to mask the real U.S. position by claiming that it is opposed to Saudi Arabian policies.
The stenographers in U.S. media are always willing to help their government when such a cover up
for a shoddy position is needed.
In the Washington Post Karen De Young supports the administration by
providing
this lie:
The United States has long joined international human rights organizations and other Western
governments in criticizing Saudi human rights abuses ..
Her colleague David Sanger at the New York Times is
debunks
that nonsense point with a rare reference to reality:
The United States has usually looked the other way or issued carefully calibrated warnings in
human rights reports as the Saudi royal family cracked down on dissent and free speech and allowed
its elite to fund Islamic extremists.
Sanger then replaces the "U.S. supports human-rights in Saudi Arabia" lie with another blatant
one:
the administration has [..] been sharply critical of the Saudi intervention in Yemen
The Obama administration has since March provided expedited arms sales, logistics support,
targeting intelligence, air refueling and combat search and rescue for the Saudi war on Yemen. Its
navy helps with the blockade of the Yemeni coast. How can the Obama administration be "sharply critical"
of the Saudi war on Yemen when it provides the critical means for that war?
Since Sunday there have been at least 11 Saudi air attacks on Yemen's capital Sanaa. Last night
another wedding hall, the Commerce Chamber and the AlNoor Centre for the Blind were
destroyed
by U.S. provided Saudi bombs.
I doubt that we will hear any "sharply critical"
condemnation of that bombing of civilian infrastructure from U.S. officials.
In the Saudi-Iran proxy conflicts the U.S. supports and urges the Saudis on because it is
in its geopolitical interest
. Saudi financed jihadist have been helpful in achieving U.S. geopolitical
goals in the 1980s in Afghanistan against the Soviets, in Yugoslavia, in Chechnya as now in Syria
against the Russians and in Xinjiang against the Chinese. There is no room for human rights or other
concerns within that framework. There is room though for billions of weapon sales and millions given
by the Saudis
to U.S.
and UK
politicians as well as
for public relations
.
The New York Times editors
falsely
claim
there is no choice for the U.S. other then to do what it does:
The tangled and volatile realities of the Middle East do not give the United States or the European
Union the luxury of choosing or rejecting allies on moral criteria.
Washington has no
choice
but to deal with regimes like those in Tehran [..] or in Riyadh to combat the
clear and present danger posed by Islamist terrorists or to search for solutions to massively
destabilizing conflicts like the Syrian civil war.
That is utter bullshit. The U.S. is working on regime change in Syria at least
since 2006
. The U.S. is enabling "the clear
and present danger posed by Islamist terrorists" through its
alliance with al-Qaeda
.
It always had and has the choice to cease and desist from meddling in the Middle East and elsewhere
to the benefit of the average U.S. citizen as well as to the benefit of the people living in the
Middle East.
U.S. media lie when they depict the U.S. as a benevolent entity that stumbles through the
Middle East and other areas misled in the dark by Saudi Arabia and Israel. It is the U.S. that is
the ruthless superpower that solely enables those barbaric entities to exist.
"The Western public now prefers good relations w/ Iran over relations w/ Saudi Arabia" I can't
speak for everyone in the West but that is my sentiments exactly. Iran has been the center of
deep state propaganda for so long that we have failed to realize - the Saudi's are more in need
of a regime change then anyone in that region. Ultimately, screw them all, except for Syria -
i'll never forget what Saudi Arabia and Turkey / western cohorts did to Syria - I hope it comes
back to nest in Saudi Arabia..
Pleased that you included that excellent link from the Intercept, this from 'rrheard' in the
comments section, it was so good I do hope he does not mind me posting part of it here. "America's
foreign policy relationship with Saudi Arabia is based on exactly two things historically–Saudi's
willingness to be a US proxy against communism in the region and the oil and weapons trade.
And that says all you need to know about America's moral compass as well. I love the idea of
my country, and absolutely detest what its leaders have done since WWII in service if its elites
perceived "interests". Because I can guaranfuckingtee you that America's foreign policy over the
last 60 years has nothing to do with the "best interests" of the American people, humanitarianism,
human rights or the "interests" of any other people on the planet despite the cradle to grave
propaganda apparatus in America that has a significant majority of American's believing such transparent
twaddle as "American exceptionalism" or "we are always well intentioned, we just make mistakes"
when it comes to the mass slaughter of non-Americans all over the globe.
There hardly a fucking dictator on the planet that hasn't been backed by the American government
and its business elites, politically and/or economically, so long as they are pliant when it comes
to towing the line on America's "interests"."
tom
| Jan 5, 2016 2:12:32 PM | 10
Agree with B, except with popular opinion. Most of the Western public so politically unprincipled
and cowardly that they can be swayed quite easily to western imperial propaganda. It's just a
matter of when the media turned on the hate/fear switch up to 2/10.
Just look at the reminder in Congo genocide, with the people couldn't give a fuck, and is one
of the worst genocides since World War II. Or the Rwandan genocide, with the propaganda that turned
most of the victims into the guilty party and then lead genocidedal maniac - Paul Kagame, as the
"sympathetic" president -now for life - thanks to the evil US empires evil media.
Blaming the Russians for the plane crash over Ukraine, gas attacks blamed on Assad. And then
you can count thousands of examples where people in the west vote or support policies that are
against their own health, social and political interests.
No, most Western people are willing to place the jackboot gladly under their neck, till they realise
it's too late.
Jen
| Jan 5, 2016 2:49:13 PM | 15
To Dan @2 and Jackrabbit @5:
In an odd way, you are both right.
The US government is beholden to lobby groups interested
in feathering their nests and getting their way. US foreign policy has also been consistent from
one presidential administration to the next.
Think of the US government as several psychopaths working together. Psychopaths basically only
care about looking out for No 1. If two or more psychopaths discover that working together allows
them to fulfill their individual goals quicker than if they worked separately, then they'll co-operate.
The fact that US foreign policy has been consistent from George W Bush to Barack Obama
could say a great deal about the style of Obama's presidency. What has Obama been able to achieve
in the 8 years he has been POTUS that has been positive and which has given his presidency a particular
distinction and flavour that represent the man's character and personality? I submit not much
at all. The impression I get (btw, I live on the other side of the Pacific Ocean from the US)
is that Obama is a weak leader who has never been able to control and rein in particular members
of his cabinet like his previous Secretary of State, much less the ideologue she brought with
her who planned and carried out the coup that deposed President Yanukovych in Ukraine in February
2014, and who handpicked the fellow who is currently that nation's prime minister. I might also
suggest that George W Bush was a weak leader who did as he was told.
In short, if the oil lobby, the pro-Israeli lobby, other industry and country lobbies in the
US government find that their interests coincide, they'll work as one through Congress and the
various federal government departments.
harry law
| Jan 5, 2016 3:42:05 PM | 19
Lysias@18 Trump: 'I would want to protect Saudi Arabia' he goes on, "That's phase one - to
go into Saudi Arabia and, frankly, the Saudis don't survive without us. And the question is, at
what point do we get involved and how much will Saudi Arabia pay us to save them?"
This is exactly what the Mafia say to their victims.
Oui
| Jan 5, 2016 4:13:45 PM | 21
Trump speaks the lingo of the House of Saud, well at least of Prince Bandar, now deposed of
his key role to influence the West. Wasn't it Bandar who offered a terror free Sochi games for
Assad's head on a platter. Putin must have calmly replied if any harm comes to Russia in the period
of the Olympic Winter games, Saudi Arabia may just lose one of it's cities.
Blair and now Cameron deal with Saudi Arabia to exchange modern weapons for protection from
AQ terror in the UK. It's the British (and French) who were willing to join Obama in bombing Assad's
Syria in September 2013. Now it's the British and Americans who offer intelligence and logistic
support to KSA and the GCC allies in bombing Yemen back to deeper medieval times. AQAP will use
this to their advantage.
The DC rag WP is really craving for a good, big sectarian regional war in ME, I am afraid they
are not going to get it, Iranian have been acting responsibly not letting US, Israel, and their
Arab insecure clientele wishes come
Through. Never the less WP editors would want their readers believe Iranian protestors meant
to attack a SUNNI embassy, and not the Embassy of Saudi Arabia who was responsible for executed
an innocent Shia high clergy.
"The execution of Shiite cleric Nimr Baqr al-Nimr by Saudi Arabia has sparked a furor
in the Middle East along sectarian lines. In Iran, the regional Shiite superpower, the Sunni
embassy was ransacked and burned."
Obama 'Connived' with Neocons for a Bashar Replacement
Very good points, Oui.
The neo-cons are the establishment's political death-squads, the
sinister arm of the executive who resorts to them whenever the establishment/Deep State need to
eliminate anyone considered an "enemy" of the empire, followed by an installation of puppets.
Neo-cons are in close coordination with CIA's "clandestine/black operations" branch, working
together all aspects of any operation at hand, the CIA with the operative/military goons, the
neo-cons with the political crooks. A typical example was in Banderastan, where the CIA had been
actively recruiting/training the nazi bastards for years, ready for the Maidan, ehem, "revolution,"
with the neo-cons putting together the political puppets ("I think Yats is the guy") who would
become the facade of the nazi takeover.
Syria, on the other hand, was a hard nut to crack, the neo-cons and the CIA made severe mistakes
underestimating Assad and the resistance of the Syrian people. US/UK/NATO were announcing the
fall of Assad every other day, and while many of those Western "leaders" are gone, Assad has survived
all their ill-predictions. Neo-cons/CIA are fuming at the mouth constantly looking for a way to
reverse their losses, and starting a little war between KSA-Iran is not such a bad idea, neo-cons
swim like fish in chaos.
They are getting set for another defeat by old Persian wisdom.
Dan at 2.
There is no single cohesive policy. Only selfishness
The USA attacks militarily directly, or by overt other means (economic), or behind
the curtain:
those that challenge it even in the imagination, provided small and pretty
powerless
countries, groups, that have a 'socialistic' bent, try to do well for their
citizens, and/or espouse some ideology that appears, *on the face of it*,
anti-capitalistic, nationalistic, or pan-national (e.g. Communism in the past, Baath
party, Arab nationalism, Cuba.)
those who try to annul or wash away ethnic, racist, religious, and so on
differences in favor of some kind of 'universality', a citizen status, mandate - this
goes against the colonialist model, abroad and at home, in which ppl are sand niggers,
blacks, etc. The US support for equality thus turns to trivia, gay marriage, quarrels
about abortion, etc.
Energy rich countries who won't open up to US corps, domination. (ex. Venezuela),
or won't permit US type banking system in their country, or aren't subservient enough on
a host of points (ex. Syria, Lybia) or somehow manage to cozy and then resist for a long
while (ex. Iraq)
Those who are involved massively with illegal and dubious trade - human
trafficking, organ sales, child forced prostitution, drugs, illegal arms, condoned
murder of rivals, vicious internal repression, heavy torture, prisons, etc. are
generally supported, but on occasion they rebel or try for other, which is not to be
allowed (ex. Afghanistan)
Anyone that can be attacked on any grounds, opportunistically, to racketeer fines,
big sums of money, such as in the banking sector.
Countries it pretends to admire who are secretly dominated by them and only
escape ostracism, sanctions or bombs or more by subservience, and a 'belonging to a
controlled block' (EU.) Sweden and the Netherlands come to mind.
Other.
That is a lot countries, people, all together. The foreign policy is not cohesive, I
agree, it is simply all over the board, adjusted all the time, based on ad hoc criteria,
racist supremacy, capitalistic short term profiteering, snobby disapproval, empty rage,
power plays, sectorial interests, corporate meddling, personal arm-twisting and
blackmail, deals with foreign potentates, arms production and selling which needs war,
and on and on.
"... Never liked the guy, knew the hopium and changium memes and slogans were a big scam! Worse than Bush, because you at least knew where Bush stood. Obama is a fraudster of the worse kind! ..."
"... Obama has done a lot of his slaughtering under the radar with drones and assassination teams and, being a black guy with a funny name, this is not sufficient to make many feel safe . ..."
"... All these factors lead us to see Obama as a dubious or awful president ..."
"... I think most of us who find Obama seriously wanting are more objectively correct than those who excuse what we see as his deliberate malfeasance. ..."
"... the critique of Obama because sometimes it gives off the angry white guy vibe that can be ugly and render your criticisms suspect. ..."
"... . Youd think that a nation that adores England would note how the British Empire decayed and how the north of England was a swath of poverty and degradation well into the 1960s. ..."
"... You may know that some interpretations of the Pandoras Box myth have the release of Hope at the very end not as a type of relief, but as a final scourge. ..."
"... Obama came in with Democratic majorities in both houses. Why does he always get a free pass to blame obstructionist Republicans? People were begging for a change in direction. Truly mediocre status quo writ large. ..."
"... Obama has a lot of enablers. I think the little good things he does (Iran negotiations, baby steps to curb climate change, nods to growing prison population, etc) are just palliatives to shut up the progressive opposition, to the extent that even exists. ..."
"... Obama blew that majority as quickly as he could. Democrats were happy to lose majorities because they no longer had to produce results and could say the Republicans made me do it. ..."
"... Democrats would have passed an omnibus budget reconciliation with a big jobs program. They could have done this with simple majorities in both houses ..."
"... TPP is the big tell for Obama. Hes fighting for that like nothing else. ..."
"... ACA belongs in the Failures column, at least for anyone who cares about the cost of healthcare and understands single payer. Stopping the Great Recession belongs in the Central Banks column, they put $13T on their balance sheets and the bill just has not come due yet. ..."
"... Diplomacy? Bombing 7 nations with no declaration of war does not count as diplomacy ..."
"... Obama wins my coveted Worst_President_Ever award ..."
"... Can we also mention the $100M he spent on personal Versailles-style vacations? Cmon people…we know a good president when we see one, or even a marginal one…and O is at the other end of the spectrum. ..."
"... I live in Australia and people often ask me what I think of Obama. My reply: I think hes a war criminal, a corporo-fascist, a hypocrite, a liar, and a fraud. But hes got a passable jump shot, so theres that . ..."
"... Its hard to imagine anyone whos a liberal or a progressive looking at the Obama years as anything other than a huge bust. ..."
"... Obama has said he aspires to follow in Lincolns footsteps. However, the closest analogy is Buchanan, who thought the way to handle the slavers power was to appease it, just like Obama appeared to think the way to handle corporate power was to appease it. And like Buchanan turned out to be the agent of the slavers power, Obama is the agent of corporate power. ..."
"... The same exact script that we had under Bill Clinton. It turns out when you give people hope, they come out to vote for you. ..."
"... Obama doesnt care about building a majority any more than the Clintons did. He cares about his personal power, perception, and ultimately his own wealth. ..."
"... Sure looks like an Obot, tuned down to soft sell mode. ..."
"... I dont believe that he is the sociopath that some on the left think he is ..."
"... I think Obama is, quite simply, not as bright as everyone assumes. ..."
"... Quite simply, I think Obama isnt bright enough to realise that a clever political compromise is not the same thing as a good policy. He is surrounded by too many privileged people to realise that the consensus among privileged smart people is one distorted by deeply conservative and regressive assumptions. ..."
"... he genuinely believes deep in his guts that if the self-identified smart people have a consensus, then its the right thing to do. ..."
"... I find it shocking and dismaying at just how regressive and damaging Obama has been. If you compare him to another very conservative Dem – LBJ – the comparison is particularly stark. LBJ, in the face of huge odds and his own natural political proclivities, did quite amazing things in terms of Civil Rights and protecting the poor. Obama has, in my view, made things even worse, in a much more favourable political environment. ..."
"... I think hes ultimately just plain cynical. ..."
"... I recall seeing the German film Mephisto, with Klaus Maria Brandauer. Brandauers artist was a well-meaning, left-leaning guy who slowly went along with the Nazis, since it was beneficial to his career. ..."
"... Truth be told, Obama has grown very creepy to me. More than a few of us have vivid images of him with that deck of playing cards of those on the kill list. I am not charmed by his appearances with media darlings like Jerry Seinfeld and Marc Maron, who, perhaps unwittingly, legitimize the great droner. ..."
"... I found part of his writing quite moving, but I always felt there was something calculated about it, something that didnt feel quite right. Even reading about his academic career, he always struck me as someone always so careful to quote and study the right philosophers and writers and past politicians, reminiscent of those post grad students I know always careful to modulate their writings to their Professors prejudices. ..."
"... in his foreign affairs his understanding has always seemed to me to be shockingly shallow ..."
"... he let the same old neo-imperialist playbook work itself out there, with a constant undermining of democratic centre left governments in the region. ..."
"... He could, for example, have simply refused to give in to Hilarys idiotic tilt to the Pacific policy which is stupidly tin eared about Chinas genuine geopolitical concerns. ..."
"... He could have said no to the Saudis idiotic attack on Yemen. ..."
"... He could have stopped the meddling in the Ukraine and tried to understand Russias genuine local concerns better without necessarily sucking up to Putin. ..."
"... He could have stood up to Turkeys meddling in Syria and Iraq (not to mention the Gulf States support for Islamacists). ..."
"... These are all things he could have done within his powers and with little real political cost, but he didnt do them. These, to me, are all evidence of someone out of his depth rather than someone who is a complete cynic. ..."
"... PK, your analysis is certainly fascinating, in particular the portrait of Obama as the teachers pet. My brother-in-law completed both a PhD in philosophy and a law degree. He equates his academic career to glorified clerking, more than an investment in the life of the mind. ..."
"... Obama seems to have just the right combination of intelligence, political correctness, breeding, and a conformist streak to thrive as a full-fledged member of the elite, whether in academia or in Washington. ..."
"... Neoliberalism generally also includes the belief that freely adopted market mechanisms is the optimal way of organising all exchanges of goods and services (Friedman 1962; 1980; Norberg 2001). Free markets and free trade will, it is believed, set free the creative potential and the entrepreneurial spirit which is built into the spontaneous order of any human society, and thereby lead to more individual liberty and well-being, and a more efficient allocation of resources (Hayek 1973; Rothbard [1962/1970] 2004). Neoliberalism could also include a perspective on moral virtue: the good and virtuous person is one who is able to access the relevant markets and function as a competent actor in these markets. He or she is willing to accept the risks associated with participating in free markets, and to adapt to rapid changes arising from such participation (Friedman 1980). Individuals are also seen as being solely responsible for the consequences of the choices and decisions they freely make: instances of inequality and glaring social injustice are morally acceptable, at least to the degree in which they could be seen as the result of freely made decisions (Nozick 1974; Hayek 1976). If a person demands that the state should regulate the market or make reparations to the unfortunate who has been caught at the losing end of a freely initiated market transaction, this is viewed as an indication that the person in question is morally depraved and underdeveloped, and scarcely different from a proponent of a totalitarian state (Mises 1962). – Joe Firestone ..."
"... incompletes ..."
"... I recall a profile of Obama in the New Yorker that referred to him as a Javanese prince, a pregnant metaphor, given his background. ..."
"... I think that Obama is detached, which has meant that he is inured to the suffering of others. ..."
"... There have been repeated complaints from congressional reps that he doesnt call. Not even colleagues in his own party. ..."
"... He may be competitive, like many business people, but he lacks the ability to get things done. ..."
"... He went to an elite high school, an elite college, and an elite law school (where he has the distinction of being an editor of a law review yet, again, never publishing). The detachment is internal and external–an empty suit, a child of privilege, no understanding of the consequences of wielding power. ..."
"... I recall Angela Merkel complaining about how cold Obama is. She argued that at least Bush seems to connect on a personal level. Merkel and other world leaders were surprised at his unwillingness to socialize. ..."
"... He may be competitive, like many business people, but he lacks the ability to get things done. ..."
"... failing upwards has been part of Barrys compensation package. ..."
"... Its part and parcel of the US clepto-chrony-capitalist system. And the best is yet to come, just you wait until he vies with Bubba for being the richest ex-president… ..."
"... all of Bubbas charisma couldnt overcome Barrys shtick in 2008. Barry left them all in the dust in fundraising, and a large chunk of that came from Wall Street. So unless there is no honor amongst thieves, Barry will get his payday. ..."
"... some of us who have always seen Obama as a total narcissist ..."
"... A true narcissist wouldnt be as obviously thin-skinned as Obama is. If he was narcissistic he might actually have been a better president, narcissists dont back down at the first obstacle the way he constantly seems to do. ..."
"... Narcissists are thin-skinned. Unflattering feedback is met with narcissistic rage. ..."
"... Narcissistic rage is a reaction to narcissistic injury, which is a perceived threat to a narcissists self-esteem or self-worth. Narcissistic injury (or narcissistic scar) is a phrase used by Sigmund Freud in the 1920s; narcissistic wound and narcissistic blow are further, almost interchangeable terms.[1] The term narcissistic rage was coined by Heinz Kohut in 1972. ..."
"... Obama like Clinton before him has no sense of the large picture, his own power, and any particular plans beyond Presidentin. ..."
"... I voted for Obama over Hillary in the 2008 primary because I did not want another Bill Clinton administration. What I got was another Bill Clinton administration–the same advisors and staff, whose advice Obama followed, especially economic advice. Obama is a lawyer by training, no numbers required. ..."
"... Two bumper stickers I wrote for my car– Drone bomb Obamas kids, as he drone bombs the kids of others and Hillary and Barack are war criminals . ..."
"... America! Locked in Lovers of making decisions based on two and only two choices by the time tested means of blind rage and blind team loyalty to raw ignorance. ..."
"... Concussions – USA ..."
"... Concussions – USA ..."
"... He is the designated spokesmodel for the love me Im a liberal wing of the power duopoly (as opposed to the proud to be an asshole wing) ..."
"... Obamas disastrous, failed presidency should have been a wake up call for Democrats and liberals. Instead theyre doubling down on neoliberalism, militarism and Wall St toadyism in the form of Hillary Clinton. Their delusion that demographics and progress on social wedge issues will rescue them from the Republican dominance at the state and local level resulting from the disenchantment of voters with their party and candidates (case in point – losing the Maryland governorship to a Republican real-estate hack mostly because of low turnout in Dem strongholds) seems to be unshakeable. They dont seem to get that its not enough to not be the Republicans or to be only slightly less worse than them. ..."
"... Oh, and another tell that this is conventional writing from conventional propaganda is the phrase Russias land grab in Ukraine. No, there was a coup in Kiev helped by 5 Billion US dollars. Right wing thugs forced the elected President to flee. Then all kinds of crazy statements about banning the Russian language in Ukraine and Russian speakers being sub human made it pretty easy for Crimea which Krushchev had ceded to Ukraine in 1954 to vote to go back to Mother Russia in an election. It was a defensive move not a grab . ..."
"... Her husband is Robert Kagan, co-founder of PNAC (Project for a New American Century). Incredible damage Kagan engineered. Hard to fathom how Nuland made it into a BO admin., much less in position to craft US Ukraine (the coup) policy. ..."
"... In truth, Obama and Eric Holders inaction on the prosecution of white collar criminals has highlighted the undeniable two-tiered justice system ..."
"... I often wondered as he was led to the stage for his inauguration if someone didnt point out the snipers and hand him a script. ..."
"... Despite his rhetoric to the contrary, listened too much to the neocon advisors ( including HRC) on foreign policy and Holder and Rahm on domestic issues. At that point, hope and change went out the window. What happened: prosecution of whistleblowers, more black inmates, affordable housing programs cut, Guantanamo stays open, schools turn private, environmental regs are not enforced, progressive voices are ignored. Not what most of us voted for. ..."
"... Obama is best understood as a CIA project since his early teens. hes been groomed ..."
"... I said early on in other blogs years ago that Obama is easily the most right wing President in history, and soon after said he was the worst President in history. ..."
"... TPP alone (Modified Feudalism. Thats more right wing than even the Tea Party – am I right?) makes Obama the most right wing President in history and its not even close. And the reason I called him the worst, is because of the Trojan Horse Affect he has being an enemy behind the oppositions lines or what Glenn Greenwald expressed by saying Obama may not be more evil than Bush, but he is the more effective evil. By occupying the party that is supposed to be liberal when he is not, he can more effectively and quickly pass right wing change from within than could the most right wing of all right-wingers in the other party. ..."
If I was passing out grades, with the TPP project, Obama gets a big fat F-
Never liked the guy, knew the hopium and changium memes and slogans were a big scam! Worse
than Bush, because you at least knew where Bush stood. Obama is a fraudster of the worse kind!
Jill Stein's got my vote if Uncle Bernie isn't on the ticket! In my humbe opinion of course!
Almost all commentary in the US mass media (which Alternet is on the fringes of) has as basic
assumptions two memes: "compared to the Republicans" and "in the real world." I think if we want
to be honest that we must say compared to a President Cruz or President Santorum, Obama looks
fairly good. And as the commenter notes about Paris, in "the real world" tens of millions of Americans
take it for granted that the job of the President is to "keep us safe" by slaughtering foreigners
in sufficient numbers so that they fear us.
Obama has done a lot of his slaughtering under
the radar with drones and assassination teams and, being a black guy with a funny name, this is
not sufficient to make many feel "safe".
Here, our criteria are different. We have both a broader picture of what is happening, what
was and is possible (we could be wrong about the extent of what's possible, but that's another
argument), and what the potential options are.
All these factors lead us to see Obama as a
dubious or awful president
(opinions differ, even around here). Objectively,
I think most
of us who find Obama seriously wanting are more objectively correct than those who excuse what
we see as his deliberate malfeasance.
On a personal note, all this horror is affecting me personally and sending me into flights
of rage. This also hurts
the critique of Obama because sometimes it gives off the "angry white
guy" vibe that can be ugly and render your criticisms suspect.
I know that global warming and
gun violence have me so upset that my own judgment is at times distorted, although I can't have
much truck with anyone who isn't deeply upset by these phenomena. And the old academic stance
of radical objectivity and dispassion really can be a pose and socially sterile–leadership and
mobilizing people is rarely all about dispassionate objectivity and pulling one's punches with
neutral language. It all leaves me baffled as to the way ahead.
Jim Levy: An excellent comment. As always, you argue carefully and even use unfashionable words
like "dispassionate." (And how many blogs these days have commenters who might use the word "probity?")
On a personal note: I don't believe in hope, which is a theological virtue. By and large, it
serves Christian eschatology, which is why I became suspicious of the decidedly un-religious Obama
and his use of it. (Not right away. It took me till after the first inauguration and the Cabinet
of re-treads.) And I am not persuaded the arc of history bends toward justice in the United States
of America, which may be what makes the country exceptional. American crassness has defeated even
its greatest prophets, not just Martin Luther King but Walt Whitman, Abraham Lincoln, Jane Addams,
and Sinclair Lewis.
Yesterday, I had an open house to begin the year, and we touched on insurance. Many of my friends
are free lances or self-employed owners of small businesses. We touched on what has happened here
in Illinois, collectively blanched, and then discussed the fact that after 19 years of free lance
I took a job. It is a plum job, and it has health benefits. ACA is going to grind down the middle
class, and the happy talk of extended coverage doesn't talk about the crappiness, the insulting
crappiness, of the policies.
I suspect that major change with regard to global warming, peace, and conversion to a new economy
will not come from the United States
. You'd think that a nation that adores England would note
how the British Empire decayed and how the north of England was a swath of poverty and degradation
well into the 1960s.
So the solutions are going to come from smaller, odder places, just as mammals
were a small and odd group when they arose, years ago. Portugal is intriguing, as is Norway. Sweden
is trying in ways that the U.S. just won't do. And even Japan changes in remarkable ways. And
I would never rule out Brazil.
Recommended reading: It may be the moment for Cavafy, who knew about decadent societies and
the feeling of loss. See "Waiting for the Barbarians" and "Ithaca."
You may know that some interpretations of the Pandora's Box myth have the release of "Hope"
at the very end not as a type of relief, but as a final scourge.
Obama came in with Democratic majorities in both houses. Why does he always get a free
pass to blame "obstructionist" Republicans? People were begging for a change in direction. Truly
mediocre status quo writ large.
You got it.
Obama has a lot of enablers. I think the little "good things" he does (Iran
negotiations, baby steps to curb climate change, nods to growing prison population, etc) are just
palliatives to shut up the progressive opposition, to the extent that even exists.
Obama blew that majority as quickly as he could. Democrats were happy to lose majorities
because they no longer had to produce results and could say the Republicans made me do it.
If they were serious, the
Democrats would have passed an omnibus budget reconciliation
with a big jobs program. They could have done this with simple majorities in both houses
.
It's the lack of good jobs that is causing the implosion of society. And that's on Obama and the
Democrats who didn't turn things around when they had the chance.
TPP is the big tell for Obama. He's fighting for that like nothing else.
All of the "Incompletes" belong in the "Failures" column. And the "Successes"?
ACA belongs
in the "Failures" column, at least for anyone who cares about the cost of healthcare and understands
single payer. Stopping the Great Recession belongs in the "Central Banks" column, they put $13T
on their balance sheets and the bill just has not come due yet.
Diplomacy? Bombing 7 nations with no declaration of war does not count as "diplomacy"
, recall
that Jimmy Carter went 4 whole years without a single shot fired in anger, now THAT's diplomacy.
And please point me to one single solitary foreign policy "success", I suppose you'd have to mention
Cuba and Iran, Cuba was a gimme and it's far from clear that the Iran rapprochement has succeeded
and is a net "win" for the US given the witches brew of the ME.
Obama wins my coveted "Worst_President_Ever" award
, and yes I'm counting Andrew Johnson and
Millard Fillmore. He simply normalized everything we hated about Bush, from Permanent War to unbridled corporo-fascism to a free pass for Wall St to unlimited spying that would make the Stasi drool.
And no mention of the War on Whistleblowers.
Can we also mention the $100M he spent on personal
Versailles-style vacations? C'mon people…we know a "good" president when we see one, or even a
marginal one…and O is at the other end of the spectrum.
I live in Australia and people often ask me what I think of Obama. My reply: "I think he's
a war criminal, a corporo-fascist, a hypocrite, a liar, and a fraud. But he's got a passable jump
shot, so there's that".
Obama has said he aspires to follow in Lincoln's footsteps. However, the closest analogy
is Buchanan, who thought the way to handle the slavers' power was to appease it, just like Obama
appeared to think the way to handle corporate power was to appease it. And like Buchanan turned
out to be the agent of the slavers' power, Obama is the agent of corporate power.
The same exact script that we had under Bill Clinton. It turns out when you give people
hope, they come out to vote for you.
Especially at a time of economic crisis. But then when you deliver nothing for the largest
block of voters, you quickly disenfranchise them and they either change their vote or don't bother
to vote at all. The Senatorial elections in Massachusetts were a good barometer for Obama's quick
loss of appeal. We had a tightly contested race between our former Attorney General, Martha Coakley,
and Scott Brown for senate. Coakley was an awful candidate who was a somewhat effective AG, but
had no personality or desire to run a strong campaign. Scott Brown was a fluff candidate who had
been a local state representative.
When the race was clearly close due to the democrats failed policy and the potential for Scott
Brown to be a deciding vote against Obamacare, Obama himself came and stumped for Coakley. A sitting
president who had won an overwhelming majority of the vote in Massachusetts could do little to
bring up Coakley's flagging campaign.
Scott Brown was elected and had a largely feckless few years in office. Now look who sits in
that Senate seat. Elizabeth Warren, who one could say has stood up to Obama's largest policies
and is by no means a democratic insider. So this is to say that most democrats or temporary Obama
supporters were quickly disillusioned when the president they got didn't match the marketing promises
they received on TV. But
Obama doesn't care about building a majority any more than the Clintons
did. He cares about his personal power, perception, and ultimately his own wealth.
Sure looks like an Obot, tuned down to soft sell mode.
The "failures and incompletes" remind
me of GWB's aweshucks moments. Iran needs to be moved from the Big Successes category to the aweshucks
column now. Because, aweshucks, furry faced crazy mullahs. If only they were more like bankers,
corporate America and the security state – where we could control them better?
A few months ago on a thread here I asked generally what people thought actually motivated
Obama – what makes him tick as a person – he clearly isn't a narcissist like Clinton, or a captive
of his upbringing like Bush. I got some really interesting answers, its a pity I can't find them
now.
I don't believe that he is the sociopath that some on the left think he is
– there
is enough evidence from the first 2 years or so of his presidency that he was genuinely trying
to do the right thing by the economy and in the Middle East, but the speed with which he retreated
into an establishment shell at the first sign of trouble was remarkable and disturbing. I suspect
that for someone thought of as a 'thinker', he seems to have a lack of real self awareness.
I'm less cynical than some about his motives with Obamacare, drones and TPP.
I think Obama
is, quite simply, not as bright as everyone assumes.
I've met very educated, progressive-minded
people, who will defend strongly some very regressive policies on the basis that 'yes, they are
not ideal, but they are a step in the right direction, anything else is not politically feasible'.
And yes, I used to think like that (NC being one of my big educators). It sounds pretentious to
say people like that are not 'enlightened' yet, but to an extent it is true. It took me many years
to shake off the assumptions of my own education (conservative) and upbringing (conservative).
Quite simply, I think Obama isn't bright enough to realise that a clever political compromise
is not the same thing as a good policy. He is surrounded by too many privileged people to realise
that the consensus among privileged smart people is one distorted by deeply conservative and regressive
assumptions.
You can see it in his pre-presidential writings –
he genuinely believes deep in his
guts that if the self-identified 'smart' people have a consensus, then its the right thing to
do.
But back to the point – I agree with Yves that this article is surprisingly generous to Obama,
and given that it comes from the left, it shows that his natural charm works even on people who
should know better.
I find it shocking and dismaying at just how regressive and damaging Obama
has been. If you compare him to another very conservative Dem – LBJ – the comparison is particularly
stark. LBJ, in the face of huge odds and his own natural political proclivities, did quite amazing
things in terms of Civil Rights and protecting the poor. Obama has, in my view, made things even
worse, in a much more favourable political environment.
I'm particularly horrified at his supposed
environmentalism – he has done absolutely nothing that he wasn't dragged kicking and screaming
into doing. I believe that deep down he has a natural distaste for 'regular folks'. In theory
he wants to help them, but he can't help wishing they didn't actually exist. I've met a lot of
people like him – many come from privilege, many do not – the fact that they think they bootstrapped
themselves up makes their contempt even stronger.
Yet, I do think Obama is quite bright, with a subtle wit and a profound understanding of oppression.
I read parts of one of his books, and his poetic way of exploring how the poor on Chicago's South
side live was truly moving. Which makes his transition to the dark side even more troubling.
That's why
I think he's ultimately just plain cynical.
What makes him tick? He's one of the
most powerful men in the world, and he has plenty of enablers in the "intelligentsia" and on media
outlets like NPR and the New York Times to convince him that he's some sort of great compromiser,
a martyr for the Middle Path. I really do think Obama thinks he's just so damn reasonable, if
only he didn't have to content with Congress and "bitter working class people." Ha. You're right,
when he had both houses, he didn't exactly push for Wall Street prosecutions and regulations,
did he? But why would he invest emotionally in that version of himself, which is the highly unflattering
portrait of somebody who sold his soul?
After awhile, you buy into the narrative which both enables, and is flattering, to you. And
I don't think brilliance makes you immune to that, not when you have access to all of that power.
The mind is a flexible thing, and even smart people can just create new stories which are validating.
I recall seeing the German film "Mephisto," with Klaus Maria Brandauer. Brandauer's artist
was a well-meaning, left-leaning guy who slowly went along with the Nazis, since it was beneficial
to his career.
I wouldn't underestimate what access to power and money can do. I suspect
that Alexis Tsipras wanted to sincerely help his fellow Greeks out of economic devastation. However,
the Troika has way more goodies to give him, than Greece ever could. So, why wouldn't he be seduced?
Truth be told, Obama has grown very creepy to me. More than a few of us have vivid images
of him with that deck of playing cards of those on the kill list. I am not charmed by his appearances
with media darlings like Jerry Seinfeld and Marc Maron, who, perhaps unwittingly, legitimize the
great droner.
To me, his chilling asides (like droning rivals to his daughter's favourite
pop group, sharing his contempt for the angry poors, or his story about decrepit world leaders
peeing themselves) reveal somebody who has lost touch with his humanity and has become dangerously
self-satisfied. Jerry Seinfeld shared that "power corrupts." Did Obama recognize himself in that
equation? Does he even care anymore? Either way, he has a very lucrative future career in speeches
and publishing, so I think he'll be just fine. Leave it to the plebes, those pesky consciences.
@inverness, I think you are generally right about that.
I found part of his writing quite moving,
but I always felt there was something calculated about it, something that didn't feel quite right.
Even reading about his academic career, he always struck me as someone always so careful to quote
and study the 'right' philosophers and writers and past politicians, reminiscent of those post
grad students I know always careful to modulate their writings to their Professors prejudices.
But I've always suspected this was instinctual rather than calculated with Obama, but its hard
to be sure. But one thing that immediately struck me when I was reading his books was his huge
lack of curiosity about economics and science – there was nothing, absolutely nothing to indicate
he gave any thought whatever to those subjects.
I do think that he (along with his close advisors) see themselves as 'the grown-ups in the
room' and bulwarks against 'the crazies'. Supporting drone strikes can be seen as 'grown up' policy
when you are constantly dealing with hawks. But
in his foreign affairs his understanding has
always seemed to me to be shockingly shallow
. As an obvious example where he could have made
a very real difference without too much political issues, he could have reached out more to progressive
governments in South and Central America, but
he let the same old neo-imperialist playbook
work itself out there, with a constant undermining of democratic centre left governments in the
region.
He could, for example, have simply refused to give in to Hilary's idiotic "tilt to the
Pacific' policy which is stupidly tin eared about China's genuine geopolitical concerns.
He could have said 'no' to the Saudi's idiotic attack on Yemen.
He could have stopped the meddling in the Ukraine and tried to understand Russia's genuine
local concerns better without necessarily sucking up to Putin.
He could have stood up to Turkeys meddling in Syria and Iraq (not to mention the Gulf States
support for Islamacists).
These are all things he could have done within his powers and with little real political cost,
but he didn't do them. These, to me, are all evidence of someone out of his depth rather than
someone who is a complete cynic.
PK, your analysis is certainly fascinating, in particular the portrait of Obama as the
teacher's pet. My brother-in-law completed both a PhD in philosophy and a law degree. He equates
his academic career to glorified clerking, more than an investment in the life of the mind.
Obama seems to have just the right combination of intelligence, political correctness, breeding,
and a conformist streak to thrive as a full-fledged member of the elite, whether in academia or
in Washington. He certainly lacks the iconoclastic/rebellious streak which you see in brilliant
minds like Noam Chomsky, unless he's disciplined enough to keep that under wraps for opportunistic
reasons.
Obama seems to have just the right combination of intelligence, political correctness,
breeding, and a conformist streak to thrive as a full-fledged member of the elite, whether
in academia or in Washington.
"Neoliberalism generally also includes the belief that freely adopted market mechanisms
is the optimal way of organising all exchanges of goods and services (Friedman 1962; 1980;
Norberg 2001). Free markets and free trade will, it is believed, set free the creative potential
and the entrepreneurial spirit which is built into the spontaneous order of any human society,
and thereby lead to more individual liberty and well-being, and a more efficient allocation
of resources (Hayek 1973; Rothbard [1962/1970] 2004). Neoliberalism could also include a perspective
on moral virtue: the good and virtuous person is one who is able to access the relevant markets
and function as a competent actor in these markets. He or she is willing to accept the risks
associated with participating in free markets, and to adapt to rapid changes arising from such
participation (Friedman 1980). Individuals are also seen as being solely responsible for the
consequences of the choices and decisions they freely make: instances of inequality and glaring
social injustice are morally acceptable, at least to the degree in which they could be seen
as the result of freely made decisions (Nozick 1974; Hayek 1976). If a person demands that
the state should regulate the market or make reparations to the unfortunate who has been caught
at the losing end of a freely initiated market transaction, this is viewed as an indication
that the person in question is morally depraved and underdeveloped, and scarcely different
from a proponent of a totalitarian state (Mises 1962)." – Joe Firestone
Skippy…. a product of environmental conditioning which was mentored in the early stages of
political – life – by where the currant paradigm could be extended and advanced.
Instead, one of his earliest initiatives – and remember, this marks the use of his earliest
political capital in May 2009 – indefinite detention. I was beyond horrified and have regretted
voting for him since that day.
Or siding with the telecoms sanctioning surveillance the first week he was official. Or Summers
and Geithner. Or the great O-Care insurance sell out. Or pretending he was going after the banksters.
Or Fracking. Or, Or, Or.
By the way, "The Great Droner' by one of the commenters above is genius. Certainly applies
in a multitude of ways.
Notice your litany of or, or, or-s exemplify how nearly all of the so-called
incompletes
are actually failures (although we can count Congress and Senate as whole
class
failures).
I couldn't even read about the so-called economic
recovery
and bank bailouts by holding
my nose. NC readers would need Dramamine (polite way if saying it).
Nevertheless, I have had a few dreams about informal meetings with Bho, and while i seem to
have tried to give him some guidance, he was always charming and amicable…maybe simple good manners
is enough to score with excellence.
PK and Inverness: Astute comments, very thought provoking.
I recall a profile of Obama in the
New Yorker that referred to him as a Javanese prince, a pregnant metaphor, given his background.
I believe, though, that the writer was referring to ceremonial kingship. Obama as embodying a
symbolic kind of power.
I think that Obama is detached, which has meant that he is inured to the suffering of others.
Surely, the video-kill of Osama bin Laden is detached (and immoral, but let's not go there yet)–especially
publishing photos of the control room. This detachment evidently continues into retail politics.
If he isn't giving a grand speech, he doesn't want to have to shake hands.
There have been repeated
complaints from congressional reps that he doesn't call. Not even colleagues in his own party.
The detachment devolves into a certain designed lack of excellence.
He may be competitive,
like many business people, but he lacks the ability to get things done.
The endless droning about
his background as a professor of constitutional law (it's an article of faith among his fan club)
is belied by his policies (Guantanamo, drone killings, the extrajudicial killing and disposal
of OBL).
Yet he was so detached as a con law prof that he neglected to publish articles or books
about the U.S. Constitution. Who did he influence? No one is ever quoted as saying that the class
was good or that Obama has any kind of constitutional theories. Again, he's the Javanese prince,
ceremonial, detached, waiting to rule. He's like an ever-shiny-and-new M.B.A.
He went to an elite high school, an elite college, and an elite law school (where he has
the distinction of being an editor of a law review yet, again, never publishing). The detachment
is internal and external–an empty suit, a child of privilege, no understanding of the consequences
of wielding power.
I owe Geraldine Ferraro an apology–isn't she the one who was hushed for saying something like,
So he gave one good speech? And the whole kerfuffle about the location of the Obama library, with
the many sites? Isn't the presidential library supposed to be at the person's "home," and does
Obama have a home?
I recall Angela Merkel complaining about how cold Obama is. She argued that at least Bush
seems to connect on a personal level. Merkel and other world leaders were surprised at his unwillingness
to socialize.
When Europeans, in particular Germans, find you too reserved…this also speaks
to your theory of detachment, albeit on a social level.
"He may be competitive, like many business people, but he lacks the ability to get things
done."
Yet, like many business people,
failing upwards has been part of Barry's compensation
package.
It's part and parcel of the US clepto-chrony-capitalist system. And the best is yet to
come, just you wait until he vies with Bubba for being the richest ex-president…
Clinton's natural skill has been his adept, and presumably disingenuous ability to insightfully
focus and project empathy toward people, make them think he has their interests. Combined with
an ability to triangulate opportunity, this is why he is such a excellent grifter BClinton's naturally
ability to interact and ingratiate seems to me to be exactly the skillset BHO is utterly void
of.
I think IN GENERAL, one on one most people have a hard time not liking BClinton. It is what
it is.
OTOH, other than BHO's true believers, most of whom probably are of relatively modest means
other than the Hollywood liberal dilettante sort that want the superficial interaction w/ the
first half black POTUS, I don't really see BHO pulling off a BClinton scale payday..do you?
His narcissistic nature will inhibit that. So ok some BOD opportunity, maybe some foundation
at UofC?, but who in the serious old money crowd will want to engage him as a peer and for what
reason?
He kinda has the charisma of a POTUS version of Alberto Gonzalez.
You may be right, but then again
all of Bubba's charisma couldn't overcome Barry's shtick
in 2008. Barry left them all in the dust in fundraising, and a large chunk of that came from Wall
Street. So unless there is no honor amongst thieves, Barry will get his payday.
And FWIW, 'serious old money' looks like a pittance compared to the serious new money whose
bacon Barry saved. Besides, I don't really see Bubba rolling with the old fogies club, I see him
hobnobbing with Bono. In any case, we shall find out soon enough just how much Barry's service
is worth.
Serious old money is a misnomer indeed, makes that serious money, that said i doubt Bono lets
a nickel go too easily. Wall st looks to future opportunity will be yesterdays fish wrapper in
a year. On 2098, that's a pretty good surrogate for HRC charm. I just dont see BHO being a wheeler
dealer which in the end is about all BClinton has to offer anyone,
Still such a shame Chicago is BHO last known address
"such a shame Chicago is BHO last known address" Dude, this fact harshest my mellow every time.
Throw in the inevitability of His lie-Barry coming to the neighborhood and I completely crumple
into a bottomless pit of self-pity. The thought of the hordes of 0bots making the pilgrimage to
Hyde Park in the coming years is simply unbearable.
What motivates Obama? I'd venture his upbringing as a half black outsider licking the Windows
who now sees himself at the main house dining room table.
You're kidding, right? Of course
some of us who have always seen Obama as a total narcissist
could be wrong, but "clearly isn't"–where does that come from? In fact I'll just quote you
later in your comment.
he can't help wishing they didn't actually exist. I've met a lot of people like him – many
come from privilege, many do not – the fact that they think they bootstrapped themselves up
makes their contempt even stronger.
A true narcissist wouldn't be as obviously thin-skinned as Obama is. If he was narcissistic
he might actually have been a better president, narcissists don't back down at the first obstacle
the way he constantly seems to do.
To punish Narcissus, the avenging goddess Nemesis made Narcissus fall hopelessly in love
with his own beautiful face as he saw it reflected in a pool. As he gazed in fascination, unable
to remove himself from his image, he gradually pined away. At the place where his body had
lain grew a beautiful flower, honoring the name and memory of Narcissus.
Narcissists are thin-skinned. Unflattering feedback is met with 'narcissistic rage'.
from wiki:
"Narcissistic rage is a reaction to narcissistic injury, which is a perceived threat to
a narcissist's self-esteem or self-worth. Narcissistic injury (or narcissistic scar) is a phrase
used by Sigmund Freud in the 1920s; narcissistic wound and narcissistic blow are further, almost
interchangeable terms.[1] The term narcissistic rage was coined by Heinz Kohut in 1972.
Narcissistic injury occurs when a narcissist feels that their hidden 'true self' has been revealed.
This may be the case when the narcissist has a fall from grace, such as when their hidden behaviors
or motivations are revealed or when their importance is brought into question. Narcissistic injury
is a cause of distress and can lead to dysregulation of behaviors as in narcissistic rage.
Narcissistic rage occurs on a continuum from instances of aloofness, and expression of mild
irritation or annoyance, to serious outbursts, including violent attacks and murder…
Obama isn't just the object if the Obot devotion, he is the biggest Obot of them all.
Obama like Clinton before him has no sense of the large picture, his own power, and any
particular plans beyond Presidentin'.
Universal health care was never an end goal for either President. Being put in the history
books as a bipartisan hero was their goal. Healthcare was a means to an end. They picked what
they perceived as the easiest path to what they could call change. Bill handed off responsibility
to his never elected wife with no relevant back ground in hopes no one would attack her. The difference
between Bill/Obama and other narcissists (even Bernie is full of himself. He thinks he can have
George Washington's old job) is they don't grasp the difference between quality and brand.
He has a place in the history books as "the first black president" nevermind that he was a
complete disaster. Next up we will have "the first woman president", same outcome (hopefully not
much worse, that would be difficult but given her politics and her backers she's already in the
runner-up spot for my "Worst_President_Ever" award..
I voted for Obama over Hillary in the 2008 primary because I did not want another Bill
Clinton administration. What I got was another Bill Clinton administration–the same advisors and
staff, whose advice Obama followed, especially economic advice. Obama is a lawyer by training,
no numbers required.
As a professor of constitutional law, I would have guessed Obama would have at least been strong
on civil liberties, but he was not.
Two bumper stickers I wrote for my car–"Drone bomb Obama's kids, as he drone bombs the
kids of others" and "Hillary and Barack are war criminals".
Sorry if these are "too weak".
They are magnetic, so I can take them off when others are in the car with me–I worry about
being attacked by an enraged Prius driver here in "progressive" Ann Arbor, Michigan.
A long post could be done on the subject of American sports, football in particular, as self
mandated training wheels to our corresponding political duopoly;
America! Locked in Lovers
of making decisions based on two and only two choices by the time tested means of blind rage and
blind team loyalty to raw ignorance.
For short, we could call it,
Concussions – USA
.
The pluses this author attributes to a morally and ethically bankrupt individual who with overwhelming
shock and awe provided by the system described above,
Concussions – USA
, conned Americans
into making him president of their sometime democracy would simply dissolve into public ridicule
and laughter under any other system (unless it had America's big gun pointed right at it's head).
Reaction there is largely similar to that here: Obama is a failure on nearly every count, is
actually a conservative, and this "report card" is giving him too much of a pass. Encouraging!
Here's a representative comment from dave3137:
Oh, yes, and let's not forget the guy who stood by his Wall Street pals (Geithner, et al.)
and told the banksters "help me to help you," while letting "Main Street" drown in the crisis
they did NOT create. And let's not forget how this administration let people go because Breitbart
and Fox threw up a smokescreen. And let's not forget that this administration is trying desperately
to shove a "trade deal" (or three) down our throats that have almost zero advantages for ordinary
Americans. And let's not forget how this Administration's justice department failed to prosecute
ANY banksters but managed to exact a few minutes' worth of profits as "fines" - while bragging
these were "record-breaking." Oh, and remember how Obama spoke out so forcefully against the
"death panel" crap? And remember how "single payer" disappeared after big pharma had a White
House meeting? And remember ending "endless war"? Closing Guantanamo? And oh yeah, let's not
forget to give "credit" for "the most transparent administration in US history."
I don't consider Obamacare or our "economic" recovery to be successes unless, 1) you're rich
enough not to need Obamacare and 2) you're rich enough to benefit from the "economic" recovery.
Nobody else benefited aside from those using the Medicare expansion, not the middle class, and
most definitely not the poor.
Anybody who still votes Democratic based on "this is the best we can get" is admitting that
our democracy is broke and they are getting screwed. One of the required actions to fix our democracy
is to quit voting for the Democratic party based on that self defeating rational. I will vote
for Bernie, I will not vote for Hillary.
And I'm meeting quite a few Republicans who don't care for Hillary or Trump. Tells me that
the Sanders campaign has a huge opportunity to pick up votes.
You won't find a better entertainer than B.O. I think in the last week I saw references to
him hiking on some travel channel and also doing a segment with Jerry Seinfeld. Come on folks
he's giving America what it wants in it's screen captured environment
I'll never forget the time my wife and I were sitting in a restaurant and across from me was
a family or I at least assume it was a family of father, son and daughter. Teenage Son was playing
some game on a hand held device. Early twenty something daughter was texting on a smart phone.
Old school pop had his head tilted up and watching some show on the tv. I did not hear one word
uttered that entire time by the Screen family.
Obama knows we are a nation of screen watchers and being the entertainer that he is covers
the part exceptionally well. Although I have lost interest in watching his shtick anymore.
He is the designated spokesmodel for the "love me I'm a liberal" wing of the power duopoly
(as opposed to the "proud to be an asshole" wing)
, and as reward for staying on script he
gets to enjoy the considerable privileges of office–privileges that, according to plugged in commentators
like Pat Lang, he enjoys greatly.
Obama's only noteworthy accomplishment is providing the country with it's first African American
President and for that he will always deserve some credit. He himself may be a big phony, but
the pride this accomplishment has given to many black people isn't. One can also say that in a
long line of Presidential mediocrities Obama is merely the latest. Clearly it's our American system
that is deeply flawed and unable to cope with ever more serious problems.
Obama loves the limelight, but he's going on shows, not drawing the crowds himself.
Jerry Seinfeld isn't edgy or provocative (not that there's anything wrong with that), and he can't
say no to the President, in a way a Carlin might, more mock the person to their face the way a
Colbert might if he were so motivated. I didn't watch the Seinfeld appearance, but I've heard
he is the nicest celebrity to meet.
Obama has recognized that the screens which once featured him are no longer tuned in and he's
searching for attention. Every Presidential candidate is inherently an anti-Obama candidate.
Yeah Yves I almost lost my lunch when I read this on Alternet yesterday. But I guess its par
for the course from the Dem/liberal establishment. For better or worse, Obama is their guy, just
like Hillary will be their girl and IOKIADDI (its OK if a Democrat does it). Neoliberal Heritage
Foundation/Romney health insurance "reform"? No problem! It's a "Big Success"! Turning a blind
eye to the largest, most destructive white-collar crime wave in our history? Well, he had "no
choice". "Foaming the runway" for the Wall St perps while screwing ordinary workers, distressed
homeowners and fraud victims? File it under 'saving the economy". Continuity (and worse) with
the Bush/Cheney foreign policy and "War on Terrah"? Well, that's just "keeping use safe from the
21st century boogey-men that fuel the MIC and the warfare consensus among the "serious people".
And I haven't even gotten to economic inequality remaining the same (or even worsening), the TPP,
persecution of whistle blowers, inaction of student loans, promotion of Arctic oil drilling while
pretending to be serious about climate change and on and on.
Obama's disastrous, failed presidency should have been a wake up call for Democrats and
liberals. Instead they're doubling down on neoliberalism, militarism and Wall St toadyism in the
form of Hillary Clinton. Their delusion that demographics and progress on social wedge issues
will rescue them from the Republican dominance at the state and local level resulting from the
disenchantment of voters with their party and candidates (case in point – losing the Maryland
governorship to a Republican real-estate hack mostly because of low turnout in Dem strongholds)
seems to be unshakeable. They don't seem to get that its not enough to not be the Republicans
or to be only slightly less worse than them.
Until the Dem/liberal establishment wakes up I'm afraid that not much will change. I think
its better to focus less on worrying about which establishment apparatchik will win the presidency
to changing the electoral process so that more voices are heard (opening up the debates) which
I hope will get more voters engaged in participating. That's the only way to take down the establishment
that produces empty suit infotainment candidates like Obama and Clinton (not to mention the GOP
troglodytes).
Seems we/U.S. has become content grading our leaders withing paradigms of mediocrity. Seems
like yesterday, the 2k election mess… recounts in Florida, Jeb's state troopers impeding black
voters getting to voting booths, the black box voting machines producing more votes in Repub precincts
then there were registered voters, Kathryn Harris (was Jeb "doing her"?) exerting "authority"
ignoring law….
Scotus' decision remanding consideration of Florida recounts back to Florida Supreme Court
was a calculated political decision to run out the legal clock, as several key SCOTUS members
have explicitly and implicitly acknowledged. And then Tom Delay's illegal thugs bused into Florida
on Tax Payer's dime, to thwart recounts.
BushCo and winger chest thumping but blind bravado intimidating their way to an election "victory"
demonstrated the same blindness they executed in their other disasters: ignoring Enron, the lies
behind Iraq, "Mushroom Clouds" and Israel's crimes levelling Lebanon, bailing out Banks while
U.S. economy crumbled….
This was biggest political wakeup call of my life, and now 15+ years in the rear view mirror.
AFAIC, the influences that allowed that to happen have gone unchanged. The U.S. tail still wags
the dog. The Bush years were an illusory horror, setting the U.S. and world back in almost unfathomable
ways.
Obama was elected with Bush approval ratings the lowest of ANY president in history. Many of
the hardest of hard right wingers I knew who treated their neighbors who criticized Bush as moral
enemies, had come around to grudingly acknowledge he was an…. asshole.
Obama had a mandate. He had an opportunity to change directions hugely had he the courage,
vision and grasp of reality many "hoped". Despite many capable economic advisers after he won
but before the inauguration, my heart sank when he announced nomination of Geithner: eg. someone
guaranteed to "fix" things by moving piles of money around, but not remove the people who stole
so much and deceived (literally) the world banking system. He instead gave them a get out of jail
card, and re-filled their bank accounts and "trusted" them to "fix" things.
This is my take on BO's "hope".
He has done little more then continue in Bush's worst foibles, and in many ways looks to me
like the world is worse off now then when he arrived. The ME mess has grown, and false premises
under lie our disastrous polices there. In both US media and current candidates, these delusions
seem to be accepted fact.
I take issue with author's (similarly assumed untruth) "Russia's land grab in Ukraine": that
utterly ignores all the other forces (US and Israel policy especially) at play there with no regard
for local interests: another example of "US Interests", no matter how selfish or destructive to
a given area… if expressed by the White House, it must be so.
WRT authors bullet points, I take issue with 2 items in particular:
– Energy: BO nominated the right guy (Dr. Chu): he knew the "territory" and was on the
cutting edge of the science… both from climate aspect and energy generation alternatives. Obama
ignored him, subjugated Chu's best advice to "more pressing" issues dominated by Geithner recommendation
("we can't afford energy until economy is fixed"). But there was no hope of "fix", and "kicking
the can" down the road on clean energy is the same as learning to "live with cancer". Chu left
quietly, no wonder.
– Embracing Diplomacy: I'm glad he did Cuba… didn't see that coming. Decades overdue. But…
despite our cascading disasters in ME, BO has learned little. Putin is the "threat", when evidence
is overwhelming Russia's efforts in Syria are turning the tide there. Biggest contributors
to Syria mess have been Turkey and Saudi Arabia (they've funded ISIS): US policy ignores this.
Putin has reached out… repeatedly. Love to see Putin and BO (or next president) together, in
public… for a week: open, frank discussions where the public can decide, not "policy makers"
and advisers looking for an advantage for their petroleum client. Seems backroom discussions
on Kerry's latest tour are moving towards some acknowledgment of this, but just as crooks on
wall street still run the show, we'll never root out biggest cause of foolish Sunni/Shia endless
conflicts without acknowledging those who fuel it. Again, worst players in this arena: Saudis
and Turkey (Ergodan).
I guess I'll just leave it there… could write a book on this, but so what? I think BO had one
of greatest opportunities to change course of America in huge ways, and in ways that were badly
needed for US' and world's future. He missed most of them.
And at the risk of sounding racist, I'm disappointed at so many of our High Profile African
Americans so many look up to (Oprah, Denzell…) who speak of BO with pride seemingly on advancement
socially we could elect a Black president, but have ignored these larger issues. I think they
could have done far better, to press him.
When it's all said and done, from where I site, we and the world are moving far too slowly
and blindly to do what's needed to ensure a bright future for a lot more people. Our most pressing
problems have been kicked down the road, and hardly acknowledged. I see not one current candidate
even close to addressing things the way that's needed.
Just not enough courage, clarity and truth… period.
At a moment of historical inflection, when the fate of the entire world was to be determined,
Barack Obama deceived the American people into believing he would usher in the systemic change
needed after the collapse of conservatism. Instead, Obama revealed himself as a neoliberal ideologue
who attempted to destroy progressivism and, in doing so, revived conservatism. Obama's deceit
squandered the last good chance for the nation and humanity to roll back global warming. For that
alone, history will condemn him.
As for his "substantive accomplishments," the only one even worth considering is his use of
diplomacy. But, as usual with Obama, there is sleight of hand. Yes, he has shown reluctance to
enter shooting wars. But at the same time, he doesn't hesitate to use drones and economic weapons
to inflict untold punishment and generate evermore strife and create new generations of people
who hate America. Which brings me to another point about Obama: apart from achieving his neoliberal
dystopia, Obama's primary goal appears to be that he look good and be respected. (That weakness
is why the Democrats and the Left might have inhibited Obama had they not defended and enabled
him.) From Obamacare to fracking to economic royalism to race relations, Obama wants credit now
and doesn't care that everything he has set in motion is a ticking time bomb.
All things considered, Obama is the worst president in American history. He was supposed to
be the corrective, like FDR, showing the genius once again of the American Experiment. Obama had
the mandate and he had the power but he was a liar and a fraud. Obama is an historical failure,
one from which I'm not sure we can recover.
At a moment of historical inflection, when the fate of the entire world was to be determined,
Barack Obama deceived the American people into believing he would usher in the systemic change
needed after the collapse of conservatism.
He never wanted to change the system – he merely wanted to be the guy who presided over it.
People who were paying attention, which I guess weren't a whole lot, saw pretty early that
Obama was running to the right of Hillary. There was never much of a systemic "change" promise
in what he had to offer.
He offered a change from W's bloody bluster and hope of escape from Cheney's visceral contempt
for basic decency, and sure enough… that's about as far as the Hope and Change thing went.
Policy-wise, millions of Americans were forced into poverty from which most will never emerge.
That was true under W and that is true under Obama. Economic policies are approximately consistent,
favoring the financial sector at the expense of workers and social services. The Obamacare insurance
scam might well have been implemented by a Republican president with or without a Democratic congress.
Foreign policy is different, but mostly because the failures of the Bush/Cheney model were
monumental and unsustainable. Foreign policy is marginally less terrible, marginally less bloody,
but it's no less imperialist, no less absurd, no less foolhardy.
I disagree. Bush was an abject failure in large part because he was pursuing a doctrine that
was dead. Conservatism was spent yet Bush insisted upon it until it failed floridly. But we've
had other failed presidents in out history and we've recovered. In a democracy like ours, the
ballot is supposed to provide the corrective to such political failure. And that's exactly what
Obama promised. Hope and change, remember that? But Obama lied - utterly and fundamentally - and,
in doing so, Obama wrecked what remained of the Democratic Party, sent our polity into a tailspin
and - most ominously - set us on a likely irreversible course of calamitous global warming. All
things considered, that makes Obama the worst president in American history, IMNSHO.
Bush/Cheney were not conservatives by any stretch of the imagination. They were radicals, especially
Cheney, who saw that his mission in life was to redeem the legacy of the Nixon-Ford debacle -
by killing and displacing millions in Mesopotamia and Afghanistan, creating as much chaos overseas
as he could, and destroying what was left of a semi-egalitarian economy.
Pleased and proud of his accomplishments he is to this day. At least for his part W knows better
than to crow.
By increasing the population covered by health insurance, Obamacare also increases demand for
physicians to treat the additionally covered. Where are all those physicians going to come from?
Last year, the primary care physician who had been treating me for ten years resigned from
the practice group, and I received a letter asking me to select a physician from new members of
the practice group, who were now accepting patients. When I called, I was given a list of six
young physicians to choose from: three graduated fromf medical schools in India, one from Pakistan,
one from Colombia, and one from a local osteopathic medical school here in the United States.
Apparently, once consequence of Obamacare is a brain drain of medical practitioners from the
rest of the world, mostly trained at the rest of the world's expense.
Emotional attachment, and breaking away from the pack is hard. I never liked the President.
I thought his speeches were word salad and his books were boring and full of conventional wisdom.
I have no problem pointing out his mistakes. If you thought the Preside the was a once in a lifetime
figure in 2004, how would you feel if you decided to read his 2004 DNC speech?
-Plenty of Democrats don't want to become "racist unicorn chasers who want equality today"
or acknowledge that the people they said were loons in 2009 for suggesting Obama didn't pass rainbows
after eating were right and received undue criticism. There was a considerable amount of nastiness
directed towards Obama critics who dared point out that guys like Rahm Emmanuel were disasters
waiting to happen.
There is a good element of the population who has internalized an acceptable left-center-right
view of politics. For them judging Obama as a failure would mean judging the left and center as
failures. They have lives where they might not know the name and general background of every Senator
and just hear a simple Republican/Democrat pie fight. They then assume he GOP is dastardly clever
to have foiled Obama and his wonderful plans. Obama critics and even potential critics were drowned
out for so long the echo chamber doesn't repeat a narrative of the Team Blue Reagan admirer desperately
wants to be a Republican.
Oh, and another "tell" that this is conventional writing from conventional propaganda is
the phrase "Russia's land grab in Ukraine." No, there was a coup in Kiev helped by 5 Billion US
dollars. Right wing thugs forced the elected President to flee. Then all kinds of crazy statements
about banning the Russian language in Ukraine and Russian speakers being sub human made it pretty
easy for Crimea which Krushchev had ceded to Ukraine in 1954 to vote to go back to Mother Russia
in an election. It was a defensive move not a "grab".
Her husband is Robert Kagan, co-founder of PNAC (Project for a New American Century). Incredible
damage Kagan engineered. Hard to fathom how Nuland made it into a BO admin., much less in position
to craft US Ukraine (the coup) policy.
Successes? 1.) medicaid clawbacks 2.)trillions instead of billions for wall st. 3.)reproductive
rights for same sex couples 4.)drone diplomacy 5.)ice free passage through the arctic
Looks an awful lot like the "failures" list are the successes, no need to comment further
Incomplete 11.) more people living in tents, true, but not everyone yet 12.) H1b, H2b 13.) less
gun violence, yep mm hmmm 14.) shoot the potentially violent 15.) go on a congressional junket
to israel, but then come back to the house of reps, don't like, stay there forever, what would
that accomplish?
tegnost reporting from LJ, the land of no (well, extremely lame) public transportation and unabashed
HRC supporters. Think I'll sit outside the breakers and watch the world go by…
The president repeatedly lied to Americans early on in his first term when he said that the
banks had committed no crimes. The president's failure was not merely a failure in prosecuting
and jailing bankers, it was much more:
1.) illustrating to all the undeniable existence of a two-tiered justice system. There are
folks doing time for money laundering, you know.
2.) not re-establishing faith in the US financial system.
Perhaps it was a designed plan to shine a light on the corruption and hypocrisy that is Amerika,
but I kind of doubt it.
In truth, Obama and Eric Holders inaction on the prosecution of white collar criminals
has highlighted the undeniable two-tiered justice system
……….too bad nobody is paying attention.
One could say that all the failures of Obama's presidency have done a good job shinning a light
on all that is wrong with our country.
The terminology "Coddling corporate America" under the "Big Failures" list is much too charitable
to this administration. This hasn't been about inviting a big campaign contributor to a sleepover
at the White House, and the issues are ongoing.
More succinctly, he's the Wall St Manchurian candidate and
any benefits we the people
have derived from his Presidency have only been "trickle down" at best.
He lied at every
turn to the American people to become President in 2008 all the while knowing that once in office
his masters on Wall St would be well served. He's smart enough to fool everyone that voted for
him – is that ever worthy of praise by Democrats? No – only by the Republicans that he had emboldened.
They must have been laughing their arses off when they saw how this hope and change Presidency
was unfolding in the 1st week and every week since. He had exposed his Achilles heel the 1st week
in office, appointing one Wall St veteran after the other and the REpugs saw this and attacked.
The Republican party was on it's way out, their President had lied us into wars and into invading
other countries, torture and war crimes. But Barack alone saved them from their fates, snatching
defeat from the jaws of victory. No, nothing about BO should get a passing grade. As he said to
Hillary in 2008, the Presidency is just a figure head office (not an office for a leader). Figure
head and trickle down voodoo economics, that's about all we the people got. Oh yeah, and don't
forget all the Republican victories over the last 8 years that never should have happened.
After major pressure and defeats in court. DADT was struck down before it was repealed, and
Obama came out for gas marriage after fighting efforts against an anti-gay referendum in North
Carolina.
I often wondered as he was led to the stage for his inauguration if someone didn't point out
the snipers and hand him a script. After all, Kennedy was killed for not following his…We have
been captive of the "deep state" for a long time. The business of America is the enabling of a
global looting. Always has been, always will be.
It was obvious from the appointment of Eric(Pardon Me)Holder, Timmy (what tax?)Geithner and
Robert Gates that nothing was going to change and that hope had left the building. Maybe that
was the point, that it was pointless to hope.
I confess I voted for him in 2008 (with reservations). The "lesser of two weevils". And perhaps
seduced by "Dreams from my Father". I didn't expect revolution, but I also allowed "hope" for
a moment. I voted for Jill Stein in 2012. And I vote in EVERY election. But I can't forget Emma
Goldman's wisdom, "If elections changed anything, they would make it illegal".
Don't forget all the Republican victories over the last 8 years that never would have happened
if he had been a man of his word. He owns those too. If the scale is A to F, I'd give him a G.
I often wondered as he was led to the stage for his inauguration if someone didn't point
out the snipers and hand him a script.
I was and I remain astonished at how Obama metamorphasized immediately after he won in 2007.
I listened to a lot of Obama speeches in 2007 and I read his books and that Obama never stepped
inside the White House. This transformation being so exquisitely executed, a suspicious mind might
consider an orchestrated conspiracy. Maybe a rational mind, too, because the alternative explanation
proves elusive.
Long before his inauguration, he was a made man. Ken Silverstein in Harper's wrote "Barack
Obama Inc" back in 2006. Black Agenda Report and Paul Street knew him from Chicago. Adolph Reed
Jr wrote earlier than that and then repeated it in 2008 in The Progressive.
He's a vacuous opportunist.I've never been an Obama supporter. I've known him since the very
beginning of his political career, which was his campaign for the seat in my state senate district
in Chicago. He struck me then as a vacuous opportunist, a good performer with an ear for how
to make white liberals like him. I argued at the time that his fundamental political center
of gravity, beneath an empty rhetoric of hope and change and new directions, is neoliberal.
– See more at:
http://progressive.org/mag_reed0508#sthash.hEiRFBaY.dpuf
There was information early that he was the corporate pick, but people chose to put their fingers
in their ears. It was the most frustrating time for me in my sojourn into politics. And it continues.
I just had a new acquaintance tell me that Obama will go down as one of the great presidents.
Sad.
Three things stand out for me from Obama's first couple of months in office that indicated
what kind of President he would be.
Appointments. Rahm Emanuel, Timothy Geithner, Larry Summers, Eric Holder and Arne Duncan.
I would also throw in Sebelius as well. What did we expect from this crew of neoliberal thinkers.
We got no prosecutions of Bush war criminals or Wall St criminals, bailout of banks but not
Main St, "never let a crisis go to waste," privatization of schools, a health reform that will
ultimately self destruct and many others mentioned here.
Disappearance of the famed Obama multi million person mailing list which could have maybe
made a huge impact on the next few Congressional and Senate elections. Why did this list go
into hiding for way too many years.
Despite his rhetoric to the contrary, listened too much to the neocon advisors ( including
HRC) on foreign policy and Holder and Rahm on domestic issues. At that point, hope and change
went out the window. What happened: prosecution of whistleblowers, more black inmates, affordable
housing programs cut, Guantanamo stays open, schools turn private, environmental regs are not
enforced, progressive voices are ignored. Not what most of us voted for.
Well I unsubscribed from that Obama list about 3 months into his first term, already pissed
off and disillusioned - Rahm's appointment and some other decision at the time was the prompt.
However somehow Hillary's PAC got my name off it, and I got repeated donation requests from
the Ready For Hillary people, without an "unsubscribe" option, which to me makes it borderline
illegal spam.
And recently I got an email from Harry Reid's group, on the same address. All very fishy, and
extremely annoying.
I said early on in other blogs years ago that Obama is easily the most right wing President
in history, and soon after said he was the worst President in history.
Some posting here ridiculed me at the time on those other blogs for those statements. Now many
comments sometimes paraphrase the same thought.
TPP alone (Modified Feudalism. That's more right wing than even the Tea Party – am I right?)
makes Obama the most right wing President in history and it's not even close. And the reason I
called him the worst, is because of the Trojan Horse Affect he has being an enemy behind the oppositions
lines or what Glenn Greenwald expressed by saying "Obama may not be more evil than Bush, but he
is the more effective evil." By occupying the party that is supposed to be liberal when he is
not, he can more effectively and quickly pass right wing change from within than could the most
right wing of all right-wingers in the other party.
That article reminds me of the reason I left Alternet. FWIW, I used to be a dedicated commenter
there. But during the campaign in 2012, they systematically rigged their coverage (coverage is
far more important than endorsements), suppressing anything that made Obama look bad – more than
any other liberal site I followed. The final straw was when a good article by one of their own
writers was unceremoniously removed from the front page and relegated to a cubbyhole where you
wouldn't find it unless you were looking for it. That made it clear there was an editorial judgement
(probably by the publisher) to censor their reporting.
I thought that was unforgivable, so when the election was past I made a fuss in as many comments
as I could and then abandoned the site. They sell ads, so clicks are worth money to them, and
I was providing a lot of clicks. At this point, I visit it only when NC provides a link I want
to read. I doubt the publisher has changed.
This article goes beyond "cautious" to the sort of coverup they committed in 2012 (personally,
I don't think much of Rosenfeld). I'm not criticizing Yves for posting it – it's a good example
of something or other, and generated a lot of discussion. But mainly, it's an example of the difference
between NC and in-the-bag sites like Alternet or Salon, where I sometimes post links to NC articles
just to be difficult. Did it today, on the article on Obamacare by Paul Rosenberg. Remarkably,
that elicited a plug for NC from the author (Rosenberg – boy are those names easy to confuse)!
Ah yes. I remember Open Left from 2009 – 2010 very well… Just another career "progressive"
site suppressing single payer advocacy because Obama. Of course, if they'd gone full on for single
payer then, the ground would be prepared now for the real solution. So their tactics did real
damage.
"... Sometimes … demand is restricted by the fact that nobody has any money in their pocket. ..."
"... the only takeaway is that most economists are nothing more than rancid witch doctors doing
backflips to skirt the basic explanation that aggregate demand has been deliberately sabotaged. ..."
"... Modern neoliberal economics is just an ideology not a science. It exists to justify the current
distribution of wealth with pseudoscientific nonsense written in abstruse mathematical language. Milton
Friedman was to economics what T.D. Lysenko was to Soviet biology. Pseudoscience in service to the ruling
class. ..."
"... [Economists are] clueless about the real world because their fat paycheck magically appears
in their bank account, while producing nothing. ..."
By Ashoka Mody, Professor of Economics at Princeton. Originally published at
Project
Syndicate
For starters, world trade is growing at an anemic annual rate of 2%, compared to 8% from 2003
to 2007. Whereas trade growth during those heady years far exceeded that of world GDP, which averaged
4.5%, lately, trade and GDP growth rates have been about the same. Even if GDP growth outstrips growth
in trade this year, it will likely amount to no more than 2.7%.
The question is why. According to Christina and David Romer of the University of California, Berkeley,
the aftershocks of modern financial crises – that is, since World War II –
fade after 2-3 years . The Harvard economists
Carmen Reinhart
and Kenneth
Rogoff say that it takes
five years
for a country to dig itself out of a financial crisis. And, indeed, the financial dislocations
of 2007-2008 have largely receded. So what accounts for the sluggish economic recovery?
One
popular explanation lies in the fuzzy notion of "secular stagnation": long-term depressed demand
for goods and services is undermining incentives to invest and hire. But demand would remain weak
only if people lacked confidence in the future. The only logical explanation for this enduring lack
of confidence, as Northwestern University's Robert Gordon has
painstakingly documented
and argued , is slow productivity growth.
Before the crisis – and especially from 2003 to 2007 – slow productivity growth was being obscured
by an illusory sense of prosperity in much of the world. In some countries – notably, the United
States, Spain, and Ireland – rising real-estate prices, speculative construction, and financial risk-taking
were mutually reinforcing. At the same time, countries were amplifying one another's growth through
trade.
Central to the global boom was China, the rising giant that flooded the world with cheap exports,
putting a lid on global inflation. Equally important, China imported a huge volume of commodities,
thereby bolstering many African and Latin American economies, and purchased German cars and machines,
enabling Europe's largest economy to keep its regional supply chains humming.
This dynamic reversed around March 2008, when the US rescued its fifth-largest investment bank,
Bear Sterns, from collapse. With the eurozone banks also deeply implicated in the subprime mortgage
mess and desperately short of US dollars, America and much of Europe began a remorseless slide into
recession. Whereas in the boom years, world trade had spread the bounty, it was now spreading the
malaise. As each country's GDP growth slowed, so did its imports, causing its trading partners' growth
to slow as well.
The US economy began to emerge from its recession in the second half of 2009, thanks largely to
aggressive monetary policy and steps to stabilize the financial system. Eurozone policymakers, by
contrast, rejected
monetary stimulus and implemented
fiscal
austerity measures , while ignoring the deepening distress of their banks. The eurozone thus
pushed the world into a second global recession.
Just when that recession seemed to have run its course, emerging economies began to unravel. For
years, observers had been touting the governance and growth-enhancing reforms that these countries'
leaders had supposedly introduced. In October 2012, the IMF
celebrated
emerging economies' "resilience." As if on cue, that facade began to crumble, revealing an inconvenient
truth: factors like high commodity prices and massive capital inflows had been concealing serious
economic weaknesses, while legitimizing a culture of
garish inequality and rampant corruption .
These problems are now being compounded by the growth slowdown in China, the fulcrum of global
trade. And the worst is yet to come. China's huge industrial overcapacity and property glut needs
to be wound down; the hubris driving its global acquisitions must be reined in; and its corruption
networks have to be dismantled.
In short, the factors that dragged down the global economy in 2015 will persist – and in some
cases even intensify – in the new year. Emerging economies will remain weak. The eurozone, having
enjoyed a temporary reprieve from austerity, will be constrained by listless global trade. Rising
interest rates on corporate bonds portend
slower growth in
the US. China's collapsing asset values could trigger financial turbulence. And policymakers are
adrift, with little political leverage to stem these trends.
The IMF should stop forecasting renewed growth and issue a warning that the global economy will
remain weak and vulnerable unless world leaders act energetically to spur innovation and growth.
Such an effort is long overdue.
ArkansasAngie , January 6, 2016 at 6:17 am
"But demand would remain weak only if people lacked confidence in the future"
Sometimes … demand is restricted by the fact that nobody has any money in their pocket.
James Levy, January 6, 2016 at 6:45 am
Is he kidding:
The only logical explanation for this enduring lack of confidence, as Northwestern University's
Robert Gordon has painstakingly documented and argued, is slow productivity growth.
Real wages for a hefty percentage of the population haven't risen since 1971. Most people are
treading water or losing ground. Over 90% of the modest gains since the 2008 crash have gone to
1% or less of the population. But the problem is productivity! And this guy has a tenured job
at Princeton. Standards for employment there must include smug self-assurance, ideological blinders,
and the inability to assimilate any facts not cogent to people richer than you are.
Jim Haygood, January 6, 2016 at 11:37 am
If Princeton's most illustrious alumnus can finally make some serious loot in the private sector,
soon the author will be toiling at the Bernanke School of Economics.
Skippy, January 6, 2016 at 8:18 am
Productivity is the cocaine of the labour pool, like the old cocaine ad of the 80s in Calif
[during the epidemic].
White square room about 6M X 6M, top shelf sale executive sort doing laps like a con and the
verse goes like…. I do cocaine because I'm more productive… so I make more money… so I can do
more cocaine… over and over and with each litany increases his speed until a blur….
Skippy…. the end is a wrung out wretch sitting on the step of some low socioeconomic apt talking
about losing, wife, kids, job, everything…. w burnt out dopamine receptors as a lullaby till morte'
efschumacher, January 6, 2016 at 8:50 am
Here in the US:it's not like there's a shortage of work to be done to fix the massively inappropriate
national infrastructure – to make it human sustainable – I mean for the 'little people'. There
is of course the perennial lack of congressional vision and long term planning. There lies a huge
root of the problem.
RabidGandhi, January 6, 2016 at 9:12 am
Is this meant as a good cop/bad cop contrast piece with the Ann Pettifor post?
Here, I gave up any hope of Mody being at all earnest when he cited Rogoff and Reinhart (!!!).
Then the rest of the article completely self-destructs: weak productivity and insufficient innovation
are the issue?
When combined with yesterday's NYT article on inequality, the only takeaway is that most
economists are nothing more than rancid witch doctors doing backflips to skirt the basic explanation
that aggregate demand has been deliberately sabotaged.
Stephen Gardner, January 6, 2016 at 9:33 am
Modern neoliberal economics is just an ideology not a science. It exists to justify the
current distribution of wealth with pseudoscientific nonsense written in abstruse mathematical
language. Milton Friedman was to economics what T.D. Lysenko was to Soviet biology. Pseudoscience
in service to the ruling class.
cnchal, January 6, 2016 at 9:43 am
. . . the only takeaway is that most economists are nothing more than rancid witch doctors
doing backflips to skirt the basic explanation that aggregate demand has been deliberately sabotaged.
They are the useless eaters. [Economists are] clueless about the real world because their
fat paycheck magically appears in their bank account, while producing nothing.
Here is Mody
The US economy began to emerge from its recession in the second half of 2009, thanks
largely to aggressive monetary policy and steps to stabilize the financial system.
Totally clueless.
susan the other, January 6, 2016 at 2:02 pm
"Lack of confidence" – let me count the ways. This is a phrase to match every vacuous denial
of human economic chaos ever pontificated. Yuck.
"... I am always struck by the difference between the oligarchs of today and those (a very small group) who ran the uk in the late 17 and 18 century. Proud, brutal but they taxed themselves as necessary to build effective institutions and instruments in the service of common goals ..."
"... in this culture we recognize the Midas touch as a positive good, rather than the curse the Greeks knew it to be. ..."
"... My feeling has always been that taxes are the price you pay to live in a civilized society. Conservatives are obviously opposed to that. ..."
"... An even more commercially successful writer, J. K. Rowling, has expressed similar enlightened views. There ought to be a hall of fame for such folks. ..."
"... To become a hedge fund billionaire you can have no heart and you can have no soul. You must be a ruthless predatory bastard with no concern for morality or justice. So it is not surprising that the question of whether you owe something to others doesnt really register with hedge fund billionaires. ..."
Irving Berlin on taxes
: The New York Times
reports
on how some of the US's richest men are dodging taxes. Compare this to the
response
of Irving Berlin
when his lawyer offered him a tax shelter:
I want to pay taxes. I love this country.
He even wrote a
song
expressing this
sentiment. He said: "I owe all my success to my adopted country." ...
He embodied -- knowingly so -- a
point
made by Herbert Simon, that we westerners owe our fortunes not so much to our own efforts but
to the good luck of living in societies which enable us to prosper - which have peace, the rule
of law and material and intellectual resources ...
Now, songwriting is pretty much as individualistic an activity as one can find; But even songwriters
require a conducive environment such as musical traditions on which to draw and a marketplace
for their work. Berlin knew this: 1930s Siberia had no equivalent of Tin Pan Alley or Hollywood.
If even songwriters owe their wealth to social capital, how much more true is this of hedge fund
managers. They would be nothing without wealthy investors or large liquid financial markets: how
many billionaire fund managers are there in Burkina Faso?
Which poses the question: why, then, don't hedge fund managers have the same attitude to paying
tax as Irving Berlin? It could be that they are more motivated ... by personal greed. But there
might be another reason..., they believe their wealth is the product of their own "talent" and
so they are entitled to it... Others of us prefer to call it an example of one of the disfiguring
diseases of our time - narcissism.
Perhaps there's another explanation, though. Maybe hedge fund billionaires are greater geniuses
than Irving Berlin who have contributed more to human happiness. But how likely is this?
"The New York Times reports on how some of the US's richest men are dodging taxes."
But Jay Bird
just today declared corporations ARE paying their taxes. Really? There is no such thing as Base Erosion
and Profit Shifting?
pgl -> Jay...
You need to get a life. Start with laying off the booze.
Roland:
I am always struck by the difference between the oligarchs of today and those (a very small group)
who ran the uk in the late 17 and 18 century. Proud, brutal but they taxed themselves as necessary
to build effective institutions and instruments in the service of common goals
EMichael:
Berlin realized that he did not build that.
Robert Marshall:
What is more likely is that songwriting and billionairing require very different character traits
to reach the top. I wish I knew what it took to be a songwriter, but to be a billionaire, you have
to think the right way to go about life is to try to get as much as you can for as little as you
have to give up, and not even that if you can get out of it. And yet
in this culture we recognize
"the Midas touch" as a positive good, rather than the curse the Greeks knew it to be.
SomeCallMeTim:
Is it unseemly to infer that maybe these MOTUs hear the same dogwhistle symphony they fund? Or are
they above that sort of thing, and just 'have a business to run'?
DrDick:
My feeling has always been that taxes are the price you pay to live in a civilized society. Conservatives
are obviously opposed to that.
Jay -> DrDick...
You take the mortgage interest deduction?
Tax dodger!
DrDick -> Jay...
I rent.
DrDick -> DrDick...
And I take essentially nothing except the personal deduction.
Why is everyone so concerned with diagnosis? We know that great piles of money in few hands leads
to no good, and that is enough. Tax it away. Then let the formerly rich use their newly-freed time
writing poems describing the beauty of skimming from other people's cash flows.
DeDude:
To become a hedge fund billionaire you can have no heart and you can have no soul. You must be a
ruthless predatory bastard with no concern for morality or justice. So it is not surprising that
the question of whether you "owe" something to others doesn't really register with hedge fund billionaires.
"... [The financial crisis is worse than thought …] ..."
"... – Yes Prime Minister, A Real Partnership ..."
"... Economists: purveyors of fictions upon which the superstructure of organized robbery is raised. ..."
"... "Market Failure" is the name that economists who believe that the market cannot ever fail use when the market fails. ..."
"... "Economists put decimal points in their forecasts to show that they have a sense of humour" ..."
"... "Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else." ..."
A6: None. They're all waiting for the unseen hand of the market to correct the lighting disequilibrium.
tony, December 30, 2015 at 6:12 am
Q: What do you call an economist that makes a prediction?
A: Wrong.
ben, December 30, 2015 at 3:28 pm
Two economists are walking on the street. They notice a pile of horseshit, and the older
one says to the younger one: "I'll pay you twenty thousand if you eat that." The younger one
ponders for a moment, then agrees and eats it. They walk a bit more and run into another pile
of horse feces. So the younger one tells the elder: "I'll pay you twenty thousand if you eat
that!". The older economist considers the offer and starts eating. After a while the younger
economists stops and asks: "What was the point of this? We both ate a pile shit and neither of
us got richer." The older one answers: "What are you talking about? We both produced and
received twenty thousand worth in income and services."
GDP. Great deposits of poo.
Clive, December 31, 2015 at 5:41 am
"This economy is really terrible."
"How bad is the economy?"
"The economy is so bad, this year oysters are making fake pearls…"
"The economy is so bad, organised crime just laid off 10 judges…"
(and so on)
Paul Jonker-Hoffrén, December 30, 2015 at 7:27 am
"Knock Knock!"
"Who's there?"
"It's Return to Growth!"
Two years later…
"Knock Knock!"
"Who's there?"
"It's Return to Growth!"
And ad finitum…
Clive, December 30, 2015 at 6:21 am
"Knock Knock"
"Who's there?"
"Janet Yellen"
"Well there's no need to shout, I heard you knocking"
Joaquin Closet, December 30, 2015 at 7:42 am
The number of economists is the only thing that contradicts the Law of Supply and Demand.
craazyboy, December 30, 2015 at 9:00 am
Q: How many economists does it take to change a light bulb?
A: Three. A micro-economist to hold the ladder, a macro-economist to rotate the room, and a
university economist to develop the math model and forecast how long it will take.
Ulysses, December 30, 2015 at 9:56 am
A mathematician, an accountant and an economist apply for the same job at an oil company.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The
mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at
the interviewer hard and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two
equal?" The accountant says "On average, four – give or take ten percent, but on average,
four."
Then the interviewer calls in the economist and poses the same question "What do two plus two
equal?" The economist gets up, locks the door, closes the shade, sits down next to the
interviewer and says, "What do you want it to equal"?
Paul Tioxon, December 30, 2015 at 10:02 am
What do you call a cruise ship sinking with 500 PhD economists chained below deck?
A good start.
allan, December 30, 2015 at 10:03 am
Frederic Mishkin.
Yves Smith, December 30, 2015 at 4:32 pm
Oh, that is good!
Paul
An economist is someone who will tell you tomorrow why what they predicted yesterday didn't happen
today.
An economist, a physicist, and an engineer are stranded on an island with a can of food, and no
opener.
The engineer says, "Let's smash the can open with a rock and eat". The physicist replies, "Naw, that's going to splatter the food all over the place. Let's light a
fire, the expanding gases will force the can to pop open and presto: warm food!" The economist says, "Bad idea: the can will explode and the food will be all over the place. Now…
let's assume we have a can opener…."
Blue Meme
A physician, an engineer, and an economist were discussing who among them belonged to the oldest
profession. The physician said, "Remember, on the sixth day God took a rib from Adam and fashioned
Eve, making him the first surgeon. Therefore, medicine is the oldest profession."
The engineer replied, "But, before that, God created the heavens and earth from chaos, thus he
was the first engineer. Therefore, engineering is an older profession than medicine."
Then, the economist spoke up. "Yes," he said, "But who do you think created the chaos?"
aj
The First Law of Economists: For every economist, there exists an equal and opposite economist. The Second Law of Economists: They're both wrong.
fresno dan
Pareto's law of optimal economic theory: an economic theory has reached an optimal state when no other economist can make it wronger
pat b
The Third Law of Economists : The two economists theories don't add up.
twonine
"Economics is extremely useful as a form of employment for economists." ― John Kenneth Galbraith
gordon
JKG has some excellent one-liners. My favourite:
"The trouble with competition is that in the end somebody wins."
Joe Hill
"Again, since I'm not an economist I really have no idea what the wrong solution is."
~ @RudyHavenstein
Ramanan
[The financial crisis is worse than thought …]
James Hacker: Bernard, Humphrey should have seen this coming and warned me.
Bernard Woolley: I don't think Sir Humphrey understands economics, Prime Minister;
he did read Classics, you know.
James Hacker: What about Sir Frank? He's head of the Treasury!
Bernard Woolley: Well I'm afraid he's at an even greater disadvantage in understanding
economics: he's an economist.
Economists: purveyors of fictions upon which the superstructure of organized robbery is raised. (apologies to Ambrose Bierce)
Synoia
Q: What do you call an Economist who tells the truth?
A: Unemployed.
Ivy
If you laid all the economists end to end,
it would probably be a good thing.
They still wouldn't reach a conclusion.
ben
A farmer and two bankers are shipwrecked on an island. Two weeks later help finally arrives. The
bankers greet their rescuer who remarks how well they look.
BankerA: "we realised the potential of the natural resources on this island were tremendous".
BankerB: "I created some fiat money, we divided it up. I lent BankerA ten times my share for a
coconut farm startup, he invested ten times his share in an accountancy startup."
Rescuer: "well that's amazing, only where is it all, I don't see any produce – how did you actually
survive?"
BankerA: "We each used our debt to invest in futures given the fertile land it was clear the land
could generate wealth once labour was applied. We both realised significant paper profits. Oh and
we ate the farmer"
--
Bankers live off our backs.
Nortino
What did the supply curve say to the demand curve?
If you shift a little to the right, I'll give you some more of what you want.
_________
Why did the economist cross the road?
Because his models predicted he would.
TG
"Market Failure" is the name that economists who believe that the market cannot ever fail use
when the market fails.
Synoia
Hmm, it seems you should take your own advice to heart. :-)
What is a person called who claims to predict the future and has a history of 100% failure
in predictions?
a) A Charlatan b) An Economist c) A prophet
afreeman
In the same vein: econ entropy: money invented from hot air evaporates, what do you expect?
How many economists does it take to screw in a lightbulb?
Only one, but the lightbulb has to be hanging from the ceiling. Because economists can only screw
things up.
Minnie Mouse
It takes one economist to change a light bulb and take the entire power grid down.
James McFadden
"Did you ever think that making a speech on economics is a lot like pissing down your leg?
It seems hot to you, but it never does to anyone else." Lyndon Johnson
"... the ideal markets that would produce Pareto Optimal allocations dont actually exist ..."
"... moving from actually existing non-ideal markets to ideal markets WOULD NOT BE Pareto Optimal even if it was possible to do so, which it isnt. ..."
"... In short, Pareto Optiimality is a just so story that has absolutely no bearing on the real world other than as an ideological justification for tons of bullshit. ..."
"... The next step in graduate students indoctrination is to teach them that although Pareto Optimal reallocations are implausible, you can get around that with a principle of compensation. The principle, too is based on a same yardstick fallacy. But never mind the Pareto Optimality smokescreen and the compensation smokescreen have constrained economists to think in terms of doing what is best for the wealthiest. Funny how that happens. ..."
"Graduate students of economics learn, early in their careers, that markets allocations are Pareto
Optimal."
What they don't learn is that
1. the ideal markets that would produce Pareto Optimal allocations don't actually exist
and
2. moving from actually existing non-ideal markets to ideal markets WOULD NOT BE Pareto Optimal
even if it was possible to do so, which it isn't.
In short, Pareto Optimality is a just so story that has absolutely no bearing on the real
world other than as an ideological justification for tons of bullshit.
The next step in graduate students' indoctrination is to teach them that although Pareto Optimal
reallocations are implausible, you can get around that with a "principle of compensation." The
principle, too is based on a same yardstick fallacy. But never mind the Pareto Optimality smokescreen
and the compensation smokescreen have constrained economists to think in terms of doing what is
best for the wealthiest. Funny how that happens.
The next step in graduate students' indoctrination is to teach them that although Pareto
Optimal reallocations are implausible, you can get around that with a "principle of compensation."
The principle, too is based on a same yardstick fallacy. But never mind the Pareto Optimality
smokescreen and the compensation smokescreen have constrained economists to think in terms
of doing what is best for the wealthiest....
Richest in U.S. Shape Private Tax System to Save Billions
By NOAM SCHEIBER and PATRICIA COHEN
The very wealthiest families are able to quietly shape tax policy that will allow them
to shield millions, if not billions, of their income using maneuvers available only to several
thousand Americans.
Supposing I understand the essay, Roger Farmer is just writing the logical justification
to Herbert Spencer's (never Charles Darwin's) "survival of the fittest" rationale that Spencer
made wildly popular after Darwin published "On the Origin of Species."
Spencer was the successful ultimate justifier of British "sun-never-setting-on-the-Empire"
capitalism. Spencer sold a biological justification, Farmer is selling a logical justification
of Empire.
No, I think Farmer is dissing Pareto Optimality and using "sunspots" as sarcasm. He seems
to do it in a way that opens up space for countless side arguments that leave Pareto
Optimality unscathed.
The bottom line is that NO ONE would have ever paid any attention to the not just
"weak" but nonsensical concept if it didn't serve the function of justifying and ultimately
glorifying great inequalities of wealth and income.
;
I understand the argument and I am entirely right:
Roger Farmer is just writing the
logical justification to Herbert Spencer's (never Charles Darwin's) "survival of the
fittest" rationale that Spencer made wildly popular after Darwin published "On the Origin
of Species."
Spencer was the successful ultimate justifier of British "sun-never-setting-on-the-Empire"
capitalism. Spencer sold a biological justification, Farmer is selling a logical justification
of Empire capitalism.
I needed to be sure the argument was as empty morally as I supposed initially, but I
supposed correctly. The Roger Farmer essay is an amoral logical justification of imperial
capitalism. Plato's "Republic" conceived amorally. ;
Farmer is dissing Pareto Optimality and using "sunspots" as sarcasm. He seems to do it
in a way that opens up space for countless side arguments that leave Pareto Optimality
unscathed.
The bottom line is that NO ONE would have ever paid any attention to the
not just "weak" but nonsensical concept if it didn't serve the function of justifying
and ultimately glorifying great inequalities of wealth and income.
[ Agreed completely, but this argument runs with mine. ]
Farmer is dissing Pareto Optimality and using "sunspots" as sarcasm. He seems to do it
in a way that opens up space for countless side arguments that leave Pareto Optimality
unscathed....
[ The issue is that Roger Farmer leaves Pareto Optimality unscathed,
and this is an essential point. The essay is beyond the morality of now, but there is
no beyond. ]
"... Wolf concludes that America cannot do without some form of a welfare state, specifically improved training, education, and universal health care. ..."
"... Our problem is that we are asking for concessions that are beyond the acceptable limit for elites in any historical epoch. We're asking the powerful and the rich to give up their money and power for the greater good of all mankind. This is not likely to happen unless a powerful enough segment of the elite comes to the inescapable conclusion that they're literally dead meat if they don't and therefore opts for survival over position. ..."
"... Welfare etc are social services that can only be funded through the world-wide looting operation of the American empire ..."
An excellent
column by Martin Wolf in the Financial Times, where he is the lead economics editor. Starting
with principles put forward by Ben Bernanke in his recent speech on income inequality, Wolf
concludes that America cannot do without some form of a welfare state, specifically improved
training, education, and universal health care.
James Levy, December 26, 2015 at 4:32 pm
I have no idea if Marx was right, in the long run, or wrong–the verdict is still out on the
long-term viability of industrial capitalism, which is less than 250 years old and creaking
mightily as I write this. It may be that when Rosa Luxemburg said that the choice was between
Socialism and Barbarism, she underestimated how likely barbarism was. What I do know is that
capitalism today isn't just too ugly to tolerate, it is downright murderous. Its imperatives
are driving the despoliation of the planet. It's love of profit over all else is cutting
corners and creating externalities that are lethal. But it has made a few percent of the
global population comfortable and powerful, and they are holding onto that comfort and that
power come hell or high water (and, ironically, if things continue apace both are on the
menu).
Our problem is that we are asking for concessions that are beyond the acceptable limit
for elites in any historical epoch. We're asking the powerful and the rich to give up their
money and power for the greater good of all mankind. This is not likely to happen unless a
powerful enough segment of the elite comes to the inescapable conclusion that they're
literally dead meat if they don't and therefore opts for survival over position. I am not
enthusiastic that this will happen before it is way too late to save more than a fraction of
the current world population, and send those people back to the lifestyles and thought
patterns of 30 Year's War Europe.
digi_owl
Its a generational thing. Right after WW2, many of the elite had just
that epiphany that unless they have the common people behind them, they are
toast. But now they are dead or dying, and their grandkids are basically
once more thinking that they can go it alone. This because they have not had
the required experiences that help develop the wisdom.
What Marx saw long ago, we can see today, and without relegating ourselves
to his analysis, come to our own conclusions. Contradictions, summed up well by
Lincoln as a house divided against itself cannot stand is just as true today.
Millions of guns to protect the citizenry from tyranny have only resulted in a
1/4 million murders and 5 times as many shootings since Jan 1, 2000, some
placing people in wheel chairs and other crippling gunshot afflictions, and
more and more institutionalized state oppression, economic exploitation and
miserable lives propped up in an alcoholic haze until the liver or brain gives
out. We have more food than we know what to do with so we throw away almost as
much as we eat. And we have eaten ourselves into morbid obesity, diabetes and
heart disease. The contradictions abound from the kitchen table to the kitchen
cabinet of the White House where there seems to be nothing passed so freely as
bad advice.
The Welfare State arose from the sacrifices of the population in giving
their sweat, blood and tears to defend their nation during war, to be rewarded
for their sacrifices, rewards which were demands for power sharing and more in
the paycheck, more benefits and more time to enjoy the life spent in a more
prosperous world. It seems to me that Obamacare is not simply in death spiral
all of its own making, but even more so, because it is the best attempt
capitalism can produce in an America that is the most capitalist of societies
down to the marrow its bones. Little competition from the Church or the social
relations between nobles and subjects set for in the laws that were
disestablished to free markets for commodification and money making. Money
making enterprises structured the laws from slavery, to the voting franchise
with little from the state to cushion any of the hardships of life in America.
Health care is the largest industry we have. It is approaching 20% of the
GNP. I remember the great national freak out in the late 1970s when congress
realized it was approaching 10%. Nothing seems to be stopping the costs from
spiraling upward and onward. No risk of deflation here where nothing is spared
to save a life, operate on some poor little afflicted child, or buy a piece of
equipment the size of an office building that shoots a proton beam at cancer,
one cancer cell at a time.
When Obama Care becomes a clear burden to even the democrats who can point
to it now as some sort of accomplishment, and it is an accomplishment for the
people who finally get to see a doctor, get into a hospital, get that operation
or diagnosis that saves their lives, when even those accomplishments number in
the millions, it will be part of a health care industry for which $Trillions of
dollars can no longer be justified or even funded. As that financial collapse
approaches, it would be better for politicians to declare the defeat of a
program better rolled into one universal single payer system currently
operating as Medicare, than try to reform, shore up or the old tried and true
public lie, get rid of its waste and corruption.
Declare victory with Medicare as the solution and put everyone into it. The
only paper work left should be each person's medical history with diagnosis and
healing as the happy ending to the story.
There is a fundamental error in perception in the Western world that is so
pervasive that people can't even see it. As a most basic component of a healthy
society people need to be able to survive at a local community level without
outside support. Only after that is taken care of should people concern
themselves with luxuries, inter-community and international relations.
Welfare–not to mention other government services–can appear to have positive
impacts if one only looks at their effects in isolation, however I think there
is a devastating and pernicious impact on people's ability to form community
bonds and have local resilience with things like welfare.
Also, let's also not forget that Americans consume far more of the earth's
precious resources than any other group in the world. Welfare etc are social
services that can only be funded through the world-wide looting operation of
the American empire. Do these recipients of empire benefits have a moral right
to share in the loot of empire? Perhaps instead of domestic welfare it would be
more ethical for the American empire to provide social benefits for the
indigenous peoples who are forced from their lands to work like slaves for the
empire's benefit. Although admittedly if the American empire used it's loot for
the benefit of the foreign peoples whose lives it destroyed then there'd
probably be nothing left to spread around to the military, or to pacify and
police the domestic population. So I suppose that's not a serious
proposal.
Welfare etc are social services that can only be funded through the
world-wide looting operation of the American empire
This is obviously not true. Unless every social democratic country in the
world is considered as a piece of the American empire. And even then, I
would argue that we can easily afford a generous welfare state with a small
shift in priorities away from (globally destabilizing) defense spending to
social productive spending on human development.
Obvious to who? America lavishes so much money on its military not
only because of corruption, but also because it has the world reserve
currency and is a guarantor of the safety of international shipping.
These facts are inextricably linked to the America's status as the world
hegemon. The empire provides order and structure, and enforces the
extraction of resources from the periphery to the center. The bread and
circuses are inextricably linked to the empire's military activities and
trying to tease them apart will only lead to collapse of the entire
system sooner than it will otherwise happen.
"Social Democratic"–now that's an interesting phrase. Did you know
that Syria is a democracy, and was an extremely prosperous and
well-education nation prior to 2011?
Here's a telling paragraph from the Wikipedia article about Syria:
Hafez al-Assad died on 10 June 2000. His son, Bashar al-Assad,
was elected President in an election in which he ran unopposed.[68]
His election saw the birth of the Damascus Spring and hopes of
reform, but by autumn 2001 the authorities had suppressed the
movement, imprisoning some of its leading intellectuals.[84]
Instead, reforms have been limited to some market reforms.
"... When children don't get good educations, the production of knowledge falls into private control. Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked in. ..."
"... Not only were the politicians worried about votes but also the welfare state was a way to head off a left wing revolution. ..."
"... the change began in 1976 with the election of Rockefeller-funded Jimmy Carter, who immediately launched an austerity program. Support for Keynesian economics was further eroded by the 70's stagflation which we now know was caused by Mid East oil but at the time the "left" were like deer in the headlights, with no clue what to do. ..."
"... The final nail in the coffin was the fall of the Berlin Wall and the collapse of the USSR, discrediting communism. After that, "there was no alternative" to corporate capitalism. Or more accurately, the left was slow to formulate an alternative and to this day is still struggling with an alternative as we have observed with Syriza. It's not enough to oppose austerity, you have to have a constructive plan to fix things. ..."
LP: You indicate that this approach to budgeting was invented as a way of making the New Deal
acceptable to the business community. How did that work? Over time, who has benefitted from it? Who
has lost?
OC: Back in the 1940s, workers were fighting for their rights, class struggle was heating up,
and soldiers would soon be returning from the fronts. At that point, a new business organization,
the Committee for Economic Development (CED), came together. Led by Beardsley Ruml and other influential
business figures, the CED played a crucial role in developing a conservative approach to Keynesian
economics that helped make policies that would help put all Americans to work acceptable to the business
community.
The idea was that more consumers would translate into more profits - which is good for business.
After all, the economic experts and budget technicians said so, not just the politicians. And the
business leaders were told that economic growth and price stability would go along with this, which
they liked.
But things changed progressively over the 1970s and early 1980s. Firms went global. They became
financialized. The balance of power between workers and owners started to shift more towards the
owners, the capitalists. People were told they needed to sacrifice, to accept cuts to social spending
and fewer rights and benefits on the job - all in the name of economic science and capitalism. The
CAB was turned into a tool for preventing excessive spending - or justifying selected cuts.
Middle class folks were afraid that inflation would erode their savings, so they were more keen
to approve draconian measures to cut wages and reduce public budgets. People on the lower rungs of
the economic ladder felt the pain first. But eventually the middle class fell on the wrong side of
the fence, too. Most of them became relatively poorer.
I suppose this shows the limits of democracy when information, knowledge, and ultimately power
are unequally distributed.
LP: You're really talking about birth of austerity and the way lies about public spending and
budgets have been sold to the public. Why is austerity such a powerful idea and why do politicians
still win elections promoting it?
OC: Austerity is so powerful today because it feeds off of itself. It makes people uncertain about
their lives, their debts, and their jobs. They become afraid. It's a strong disciplinary mechanism.
People stop joining forces and the political status quo gets locked down.
Even the name of this tool, the "cyclically adjusted budget," carries an aura of respect. It diverts
our attention. We don't question it. It creates a barrier between the individual and the political
realm: it undermines democratic participation itself. This obscure theory validates, with its authority,
a big economic mistake that sounds like common sense but is actually snake oil - the notion that
the federal government budget is like a household budget. Actually, it isn't. Your household doesn't
collect taxes. It doesn't print money. It works very differently, yet the nonsense that it should
behave exactly like a household budget gets repeated by politicians and policymakers who really just
want to squeeze ordinary people.
LP: How does all this play out in the U.S. and in Europe?
OC: The European Union requires its members to comply with something called a cyclically adjusted
budget constraint. Each country has to review its economic and fiscal plans with the European Commission
and prove that those are compatible with the Pact. It's a ceiling on a country's deficit, but it's
also much more than that.
Thanks to the estimate, the governments of Italy or Spain, for example, are supposed to force
the economy toward some ideal economic condition, the definition of which is obviously quite controversial
and has so far rewarded those countries that have implemented labor market deregulation, cut pensions,
and even changed the way elections happen. Again, it's a control mechanism.
In the U.S. this scenario plays out, too, although less strictly. Talk about the budget often
relies on the same shifty and politically-shaded statistical tools to support one argument or the
other. Usually we hear arguments that suggest we have to cut social programs and workers' rights
and benefits or face economic doom. Tune in to the presidential debates and you'll hear this played
out - and it isn't strictly limited to one party.
LP: How do we stop powerful players from co-opting economics and budgets for their own purposes?
OC: Our education system is increasingly unequal and deprived of public resources. This is true
in the U.S. but also in Europe, where the crisis accelerated a process that was already underway.
When children don't get good educations, the production of knowledge falls into private control.
Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked
in.
In the economic field, we need to engage different points of view and keep challenging dominant
narratives and frameworks. One day, human curiosity will save us from intellectual prostitution.
craazyboy, December 25, 2015 at 10:10 am
Most people don't eat, go to college, use healthcare, rent or buy housing on the east or west
coast, or purchase military equipment (except perhaps small time stuff like assault rifles), so
the BLS greatly underweights(or hedonics prices, or just pulls rent data outta their butts) these
things in the inflation data they create. The Fed then goes into a tizzy if the data comes in
a few tenths of a percent below 2%, even if the data spent years above 2%, and floods the country
in liquidity so our job creators – banks and large corporations – will hire us and give us raises,
and once they finish doing that, the BLS will signal that inflation is 2% and the Fed will then
know all our problems are solved. It just takes time.
See the book "Treasure Island" for how things are going on the revenue side. But more tax breaks
for large corporations and the wealthy are needed so we don't force them to do any illegal tax
avoidance stuff and they will then happily pay whatever they think their fair should be. Might
be zero. They will then have money to buy stuff too, which is a big plus as well, when you think
about it.
So clearly, you can see why deficit spending almost seems inevitable.
Then the next problem is we still have unemployment, and something needs to be done about that.
For instance, lots of room for more government contracts for social purposes. Take Obamacare.
Place a single source contract, now estimated between $1 and $2 billion, with a Canadian systems
company that employs independent contractor Indian programmers. Eventually, we have Obamacare!
We can do this if we just get serious about this and say "No More Austerity In America!"
likbez, December 27, 2015 at 9:31 pm
Emperor Severus is famously said to have given the advice to his sons: "Be harmonious, enrich
the soldiers, and scorn all other men"
Brooklin Bridge
Can education provide the solution?
I suspect that the educational bias occurs at all levels in the sense that much the same misinformation
is provided regardless of neighborhood but progressively wrapped in more elegant pedagogical flim-flam-ery
for the owner class. Basically, the bias changes, but not the message, as one goes from poor (austerity
– this is your lot in life) to wealthy (austerity – you were born to make the tough decisions,
it's in your genes – and you'll just have to accept the rewards, man up to your destiny and toss
em a quarter on Sundays). The upper class does get a far better education, but the bias is or
becomes unconscious over time.
Basically, aristocracy is a nasty brutish cycle that keeps upping the ante of consequences.
washunate, December 26, 2015 at 8:09 am
Yves, INET and NEP and others have been lecturing that topic for years. How many trillions
of dollars do we have to deficit spend before the failure of things to improve indicts the hypothesis
itself?
Maybe what matters is not the amount of the spending, but rather, the distribution.
And what is so bad about deflation? The attachment of moral judgment to inflation and deflation
is rather bizarre outside of establishment monetary economics. The basic monetary problem confronting
the bottom 80% or so of American households is inflation, not deflation.
Dan Lynch, December 25, 2015 at 11:27 am
I don't buy the article's historical narrative.
Conservatives have ALWAYS opposed spending on social programs and ALWAYS used the deficit as an
excuse (unless the deficit was due to war or tax cuts for the rich). This was true during the
New Deal; FDR himself was a deficit hawk.
Nonetheless for years the public supported social programs and no politician dared to cut them.
Not only were the politicians worried about votes but also the welfare state was a way to
head off a left wing revolution.
What changed? I would say the change began in 1976 with the election of Rockefeller-funded
Jimmy Carter, who immediately launched an austerity program. Support for Keynesian economics was
further eroded by the 70's stagflation which we now know was caused by Mid East oil but at the
time the "left" were like deer in the headlights, with no clue what to do.
The final nail in the coffin was the fall of the Berlin Wall and the collapse of the USSR,
discrediting communism. After that, "there was no alternative" to corporate capitalism. Or more
accurately, the left was slow to formulate an alternative and to this day is still struggling
with an alternative as we have observed with Syriza. It's not enough to oppose austerity, you
have to have a constructive plan to fix things.
Vatch, December 25, 2015 at 12:40 pm
History teaches us that peacetime austerity can be horribly disastrous. Some examples:
British austerity during the 19th century included the Great Irish Famine of 1845-1849: The Irish
population was about 8 million people in 1841, and the death toll of the famine was at least a
million. This is a huge percentage loss of life. Due to the combination of deaths with emigration
and births that did not occur, the 1851 population of 6.5 million was estimated to be about 2.5
million lower than expected. Since food was exported during the famine, this was definitely an
extreme case of austerity.
Soviet austerity during the 1930s: Millions died, and food was exported during the famine period
of 1931-1933. Austerity is often associate with conservatives, so I guess conservative austerity
enthusiasts must be pleased with the performance of the eminent conservative Josef Stalin.
Chinese austerity during the Great Leap Forward of 1958-1962: Tens of millions died - perhaps
as many as 45 million. The same irony about conservatives and Stalin is true about conservatives
and Mao, but on a far greater scale.
This is a pretty remarkable piece of rambling drivel. To the extent coherent points can be
taken away from this, it appears there are at least two major flaws:
1) There is absolutely no link between public opinion and CAB. Germany chooses to have national
healthcare, passenger rail, and renewable energy. The US chooses to have national security, predatory
medicine, and car-dependent sprawl.
2) There is absolutely no link between austerity and concentration of wealth and power. France
has a much more equal distribution of wealth than the US. Yet the US has run enormous deficits
while France is supposedly constrained by the techno mumbo jumbo nonsense of the EU.
The notion that 'austerity' is sold to the public is just a blatant falsehood. Americans don't
support the budget priorities in Washington. It's a collective action problem, not a public opinion
problem.
Stephen Roach is worried that the Fed has set the world up for another financial market meltdown.
Lower for longer rates and the proliferation of unconventional monetary policy have created "a
breeding ground for asset bubbles, credit bubbles, and all-too frequent crises, so the Fed is really
a part of the problem of financial instability rather than trying to provide a sense of calm in an
otherwise unstable world," Roach
told Bloomberg
TV in an interview conducted a little over a week ago.
To be sure, Roach's sentiments have become par for the proverbial course. That is, it may have
taken everyone a while (as in five years or so) to come to the conclusion we reached long ago, namely
that central banks are setting the world up for a crisis that will make 2008 look like a walk in
the park, but most of the "very serious" people are now getting concerned. Take BofAML for instance,
who, in a note
we outlined on Wednesday, demonstrated the prevailing dynamic with the following useful graphic:
Perhaps Jeremy Grantham put it best: "..in the Greenspan/ Bernanke/Yellen Era, the Fed
historically did not stop its asset price pushing until fully- fledged bubbles had occurred,
as they did in U.S. growth stocks in 2000 and in U.S. housing in 2006."
Indeed. It's with that in mind that we bring you the following excerpts from a new piece by Roach
in which the former Morgan Stanley chief economist and Yale fellow recounts the evolution of the
Fed and how the FOMC ultimately became "beholden to the monster it had created".
By now, it's an all-too-familiar drill. After an extended period of extraordinary monetary accommodation,
the US Federal Reserve has begun the long march back to normalization.
A majority of financial market participants applaud this strategy. In fact, it is a dangerous
mistake. The Fed is borrowing a page from the script of its last normalization campaign – the incremental
rate hikes of 2004-2006 that followed the extraordinary accommodation of 2001-2003. Just as that
earlier gradualism set the stage for a devastating financial crisis and a horrific recession in 2008-2009,
there is mounting risk of yet another accident on what promises to be an even longer road to normalization.
The problem arises because the Fed, like other major central banks, has now become a creature
of financial markets rather than a steward of the real economy. This transformation has
been under way since the late 1980s, when monetary discipline broke the back of inflation and the
Fed was faced with new challenges.
The challenges of the post-inflation era came to a head during Alan Greenspan's 18-and-a-half-year
tenure as Fed Chair. The stock-market crash of October 19, 1987 – occurring only 69 days after Greenspan
had been sworn in – provided a hint of what was to come. In response to a one-day 23% plunge in US
equity prices, the Fed moved aggressively to support the brokerage system and purchase government
securities.
In retrospect, this was the template for what became known as the "Greenspan put" – massive
Fed liquidity injections aimed at stemming financial-market disruptions in the aftermath of a crisis.
As the markets were battered repeatedly in the years to follow – from the savings-and-loan crisis
(late 1980s) and the Gulf War (1990-1991) to the Asian Financial Crisis (1997-1998) and terrorist
attacks (September 11, 2001) – the Greenspan put became an essential element of the Fed's market-driven
tactics.
The Fed had, in effect, become beholden to the
monster it had created. The corollary was that it had also become steadfast in protecting the financial-market-based
underpinnings of the US economy.
Largely for that reason, and fearful of "Japan Syndrome" in the aftermath of the collapse of the
US equity bubble, the Fed remained overly accommodative during the 2003-2006 period. The federal
funds rate was held at a 46-year low of 1% through June 2004, before being raised 17 times in small
increments of 25 basis points per move over the two-year period from mid-2004 to mid-2006. Yet it
was precisely during this period of gradual normalization and prolonged accommodation that unbridled
risk-taking sowed the seeds of the Great Crisis that was soon to come.
Today's Fed inherits the deeply entrenched moral hazard of the Asset Economy.
The longer the Fed remains trapped in this mindset, the tougher its dilemma becomes – and the greater
the systemic risks in financial markets and the asset-dependent US economy.
Roach goes on to say that we're already seeing the beginnings of what may very well turn out to
be a dramatic unwind as high yield rolls over and the emerging world struggles to cope with a soaring
dollar (remember, even though EM has largely avoided "original sin" i.e. borrowing in dollars, at
the sovereign level, corporates are another story).
As an aside, those interested in a comprehensive account of what Roach covers in the article cited
above are encouraged to reach David Stockman's "The Great Deformation."
"... At a time of tension for U.S. international relations, cheap oil has dovetailed with some of
the Obama administration's foreign policy goals: pressuring Russian President Vladimir Putin, undermining
the popularity of Venezuelan President Nicolás Maduro and tempering the prospects for Iranian oil revenue.
At the same time, it is pouring cash into the hands of consumers, boosting tepid economic recoveries
in Europe, Japan and the United States. ..."
Plunging crude oil prices are diverting hundreds of billions of dollars away from the treasure
chests of oil-exporting nations, putting some of the United States' adversaries under greater stress.
After two years of falling prices, the effects have reverberated across the globe, fueling economic
discontent in Venezuela, changing Russia's economic and political calculations, and dampening Iranian
leaders' hopes of a financial windfall when sanctions linked to its nuclear program will be lifted
next year.
At a time of tension for U.S. international relations, cheap oil has dovetailed with some
of the Obama administration's foreign policy goals: pressuring Russian President Vladimir Putin,
undermining the popularity of Venezuelan President Nicolás Maduro and tempering the prospects for
Iranian oil revenue. At the same time, it is pouring cash into the hands of consumers, boosting tepid
economic recoveries in Europe, Japan and the United States.
"Cheap oil hurts revenues for some of our foes and helps some of our friends. The Europeans, South
Koreans and Japanese - they're all winners," said Robert McNally, director for energy in President
George W. Bush's National Security Council and now head of the Rapidan Group, a consulting firm.
"It's not good for Russia, that's for sure, and it's not good for Iran."
... ... ...
In Iran, cheap oil is forcing the government to ratchet down expectations.
The much-anticipated lifting of sanctions as a result of the deal to limit Iran's nuclear program
is expected to result in an additional half-million barrels a day of oil exports by the middle of
2016.
But at current prices, Iran's income from those sales will still fall short of revenue earned
from constrained oil exports a year ago.
Moreover, low prices are making it difficult for Iran to persuade international oil companies
to develop Iran's long-neglected oil and gas fields, which have been off limits since sanctions were
broadened in 2012.
"Should Iran come out of sanctions, they will face a very different market than the one they had
left in 2012," Amos Hochstein, the State Department's special envoy and coordinator for international
energy affairs, said in an interview. "They were forced to recede in a world of over $100 oil, and
sanctions will be lifted at $36 oil. They will have to work harder to convince companies to come
in and take the risk for supporting their energy infrastructure and their energy production."
Meanwhile, in Russia, low oil prices have compounded damage done by U.S. and European sanctions
that were designed to target Russia's energy and financial sectors. And when Iran increases output,
its grade of crude oil will most likely go to Europe, where it will compete directly with Russia's
Urals oil, McNally said.
Steven Mufson covers the White House. Since joining The Post, he has covered economics, China,
foreign policy and energy.
"... Enjoyed the movie, but in typical Hollywood fashion, the role of the Federal Reserve and government in pushing housing down to those unable to afford it was not even mentioned once. ..."
The Big Short opens nationwide today. But it happened to have one showing last night
at a theater near me. My youngest son and I hopped in the car and went to see it. I loved the book
by Michael Lewis. The cast assembled for the movie was top notch, but having the director of Anchorman
and Talledaga Nights handle a subject matter like high finance seemed odd.
The choice of Adam McKay
as director turned out to be brilliant. The question was how do you make a movie about the
housing market, mortgage backed securities, collateralized debt obligations, collateralized debt
swaps, and synthetic CDOs interesting for the average person. He succeeded beyond all expectations.
Interweaving pop culture icons, music, symbols of materialism, and unforgettable characters, McKay
has created a masterpiece about the greed, stupidity, hubris, and arrogance of Wall Street
bankers gone wild. He captures the idiocy and complete capture of the rating agencies (S&P,
Moodys). He reveals the ineptitude and dysfunction of the SEC, where the goal of these regulators
was to get a high paying job with banks they were supposed to regulate. He skewers the faux
financial journalists at the Wall Street Journal who didn't want to rock the boat with the truth
about the greatest fraud ever committed.
...Ultimately, it is a highly entertaining movie with the right moral overtone, despite non-stop
profanity that captures the true nature of Wall Street traders. This is a dangerous movie
for Wall Street, the government, and the establishment in general. They count on the complexity of
Wall Street to confuse the average person and make their eyes glaze over. That makes it easier for
them to keep committing fraud and harvesting the nation's wealth.
This movie cuts through the crap and reveals those in power to be corrupt, greedy weasels
who aren't really as smart as they want you to think they are. The finale of the movie is
sobering and infuriating. After unequivocally proving that Wall Street bankers, aided and abetted
by the Federal Reserve, Congress, the SEC, and the mainstream media, destroyed the global financial
system, put tens of millions out of work, got six million people tossed from their homes, and created
the worst crisis since the Great Depression, the filmmakers are left to provide the depressing conclusion.
No bankers went to jail. The Too Big To Fail banks were not broken up – they
were bailed out by the American taxpayers. They actually got bigger. Their profits have reached new
heights, while the average family has seen their income fall. Wall Street is paying out record bonuses,
while 46 million people are on food stamps. Wall Street and their lackeys at the Federal Reserve
call the shots in this country. They don't give a fuck about you. And they're doing it again.
Every American should see this movie and get fucking pissed off. The theater was deathly silent
at the end of the movie. The audience was stunned by the fact that the criminals on Wall Street got
away with the crime of the century, and they're still on the loose. I had a great discussion with
my 16 year old son on the way home. At least there is one millennial who understand how bad his generation
is getting screwed.
wee-weed up
I read the book last year... It is outstanding! Highest recommendation. If you have not read
this book, you cannot understand how today's market really works.
JRobby
This subject matter has to be put in a form that can be understood by the masses. Hopefully
the popular actors and this director is a step in that direction.
Main stream Hollywood as an informer? Hmmmmm? This adds to the current assumptions and rumors
of fractures among the elite groups.
We are reasonable people. If the banking elite is sacrificed and the other corporate oligarchs
come into a more socially acceptable line, we may be satisfied. However, the banking elite must
be sacrificed. There is no negotiation on that point.
Of course some will say I am over optimistic, they are throwing it in our faces to make $$$ and
it ends up a total police state so enjoy your "entertainment" for now.
Time goes on. Time will tell.
chunga
First you'd have to believe that politicians give a fuck about any damn thing but themselves.
REAL concern for minorities or communities LOL! Then you'd have to believe banks were forced to
do *anything* they don't want.
Then, you'd have to fall right to sleep and miss the part where all this crap was sold on Wall
Street while at the same time betting against all the "shitty deals" they made, then the whole
thing getting bailed out @ par. With par being at the absurd fraudulent property appraisals that
were made by the lenders or their agents. It's just nuts.
This was all planned, beginning with Greenspan. AIG's Greenberg KNEW their CDS paper was no damn
good, but didn't care because the also KNEW there would be a bailout. The only problem for him
was Paulson and Blankfein conspired to steal the bailout money...and they did!
That's why all this money went looking for people...it was all planned.
Hundreds of scandals have gone by since then, thoroughly unpunished, so I wonder why this movie
is coming out now. I looked into some of the cronies calling the shots at the GSE's back then
and saved it. A lot is outdated by now. Seems like a fairly bi-partisan effort.
FRANKLIN RAINES [D] – FNMA CEO (1999 – 2004) Raines accepted "early retirement"
from his CEO position while the SEC pretended to investigate accounting irregularities. Fannie's
own OHFHEO also accused him of abetting widespread accounting errors, including the shifting of
losses, so he and his fellow execs could "earn" large bonuses. The WSJ reported back in 2008 that
Raines was one of several cronies that received below market rates for mortgages from Countrywide.
Raines alone receive loans for over $3 million while CEO of FNMA. Raines' compensation for his
"work" at FNMA - $90 million.
RAINES GRADE – F
DANIEL MUDD [R] – FNMA CEO (2005 – 2008) Before becoming CEO of FNMA, Mudd
worked at the Office of the Secretary of Defense, was an advisor to Asia-Pacific Economic Corp.,
"served" on the board of the Council of Foreign Relations, "consulted" at the World Bank, and
held many positions at GE Capital including president and CEO. Mudd was dismissed as CEO of FNMA
when FHFA became conservator in 2008. In 2011 Mudd and other GSE execs were charged by SEC with
securities fraud. After his career at FNMA Mudd became CEO of a NYC hedge fund named "Fortress".
Fortress invested in purchasing tax liens on delinquent property taxes from local governments
under many benign corporate names such as "Pleasant Valley Capital" and "Travis Farm Investments".
Cozy. Mudd's compensation for his "work" at FNMA - $80 million.
MUDD GRADE – F
NEEL KASHKARI [R] – FNMA CEO (Tenure is murky) Kashkari was a former investment
banker for Goldman Sachs, was tapped by Hank "The Shank" Paulson to lend his skills over at TARP
HQ, and now rather ironically, continues God's work as a Managing Director at PIMCO. Kashkari's
compensation for his "work" at FNMA is also murky; I'll just assume it was too much.
KASHKARI GRADE - F
HERB ALLISON [D] – FNMA CEO (2008 – 2009) The esteemed Mr. Allison was quickly
whisked off to oversee the wildly successful TARP program. I didn't find much on his compensation
during his brief stint as FNMA CEO. Allison served in various positions at Merrill Lynch and became
a member of the board in 1997. He was a director of the NYSE from 2003 – 2005.
ALLISON GRADE – F
MICHAEL WILLIAMS [?] – FNMA CEO (2009 – Jan 1, 2012) Mr. Williams is a 20
year veteran at FNMA. While "serving" as FNMA CEO, Williams managed to scrape by on less than
$6 million in 2011 alone. This could and should be considered a hardship, given the complexities
involved in purloining ~ $60 billion of Fed bailout money.
WILLIAMS GRADE – F
FANNIE'S MAJOR DANCE PARTNER, FREDDIE MAC, HAS ALSO PERFORMED VERY POORLY.
Charles (my friends call me "Ed") Haldeman has announced his retirement plans but intends to
be a good sport and stay on with insolvent FHLMC until another crony can be found to fill his
wing-tips.
That might take a while. "Serving" as CEO of the ultimate backstops for the lion's share of
the MBS Ponzi is very stressful.
We'll have to accept former Freddie exec David Kellermann's testimony posthumously. Mr. Kellermann
was found hanging by the neck in the basement of his posh Vienna, VA home in the affluent suburb
of Washington. D.C. way back in April of 2009. It is presumed he had no help and local police
have stated there was no evidence of foul play.
Urban Redneck
GREED is non-partisan. And all sides agreed MOAR "home ownership" was desirable. The left
got its SJW colorblind automation, while the underwriters were able to increase volumes by
thousands of percent while reducing overall headcount. Securitization wasn't actually
"automated" since the fuckwits were using MS-Excel, but it was commoditized with Blackrock's
pricing model.
These were the days of the original algorithms of mass financial destruction, which were
primitive and largely FICO-centric, but everyone wanted to minimize the cost (of logic coding
and external data sources) so they coding decisioning based solely on information contained in
the mortgage application and the applicant's electronic credit report.
khakuda
Enjoyed the movie, but in typical Hollywood fashion, the role of the Federal Reserve
and government in pushing housing down to those unable to afford it was not even mentioned
once.
Keynesians
Wall Street is laughing at all the clowns who think this movie will "wake up America". It
would have never came out if it was any kind of danger to Wall Street, the FED, or the
establishment.
Agent P
Directed by Adam McKay (Anchorman, Step Brothers, The Other Guys....), so ... yeah I'm
going to go see it. Remember the end credits for The Other Guys? He hates Wall Street....
GoldenDonuts
Perhaps you should read the book. These are real characters from a non fiction book. They
may have changed a name or two but these are real people. I will lend you my copy if you can't
afford one.
conraddobler
Yeah I can't imagine a commercially successful movie out of this that would actually tell
the truth and make it to the screens.
What someone should do is write one of those fantastical novels where everything is a symbol
for something else and jazz it up, put some romance, danger, intrigue and of course big boobs
in it.
The real message ala the olden days usually had to be hidden to avoid the wrath of those it
was really aimed at.
"... It's now clear that if Obama had ordered a major bombing campaign against Assad's military in early September 2013, he might have opened the gates of Damascus to a hellish victory by al-Qaeda-affiliated extremists or the even more brutal Islamic State, since these terrorist groups have emerged as the only effective fighters against Assad. ..."
"... By late September 2013, the disappointed neocons were acting out their anger by taking aim at Putin. They recognized that a particular vulnerability for the Russian president was Ukraine and the possibility that it could be pulled out of Russia's sphere of influence and into the West's orbit. ..."
"... But Gershman added that Ukraine was really only an interim step to an even bigger prize, the removal of the strong-willed and independent-minded Putin, who, Gershman added, "may find himself on the losing end not just in the near abroad [i.e. Ukraine] but within Russia itself." In other words, the new neocon hope was for "regime change" in Kiev and Moscow. [See Consortiumnews.com's " Neocons' Ukraine/Syria/Iran Gambit. "] ..."
"... Putin also had sidetracked that possible war with Iran by helping to forge an interim agreement constraining but not eliminating Iran's nuclear program. So, he became the latest target of neocon demonization, a process in which the New York Times and the Washington Post eagerly took the lead. ..."
"... As the political violence in Kiev escalated – with the uprising's muscle supplied by neo-Nazi militias from western Ukraine – neocons within the Obama administration discussed how to "midwife" a coup against Yanukovych. Central to this planning was Victoria Nuland, who had been promoted to assistant secretary of state for European affairs and was urging on the protesters, even passing out cookies to protesters at Kiev's Maidan square. ..."
"... When the coup went down on Feb. 22 – spearheaded by neo-Nazi militias who seized government buildings and forced Yanukovych and his officials to flee for their lives – the U.S. State Department quickly deemed the new regime "legitimate" and the mainstream U.S. media dutifully stepped up the demonization of Yanukovych and Putin. ..."
"... Although Putin's position had been in support of Ukraine's status quo – i.e., retaining the elected president and the country's constitutional process – the crisis was pitched to the American people as a case of "Russian aggression" with dire comparisons made between Putin and Hitler, especially after ethnic Russians in the east and south resisted the coup regime in Kiev and Crimea seceded to rejoin Russia. ..."
"... Pressured by the Obama administration, the EU agreed to sanction Russia for its "aggression," touching off a tit-for-tat trade war with Moscow which reduced Europe's sale of farming and manufacturing goods to Russia and threatened to disrupt Russia's natural gas supplies to Europe. ..."
"... While the most serious consequences were to Ukraine's economy which went into freefall because of the civil war, some of Europe's most endangered economies in the south also were hit hard by the lost trade with Russia. Europe began to stagger toward the third dip in a triple-dip recession with European markets experiencing major stock sell-offs. ..."
If you're nervously watching the stock market gyrations and worrying about your declining portfolio
or pension fund, part of the blame should go to America's neocons who continue to be masters of chaos,
endangering the world's economy by instigating geopolitical confrontations in the Middle East and
Eastern Europe.
Of course, there are other factors pushing Europe's economy to the brink of a triple-dip
recession and threatening to stop America's fragile recovery, too. But the neocons' "regime change"
strategies, which have unleashed violence and confrontations across Iraq, Syria, Libya, Iran and
most recently Ukraine, have added to the economic uncertainty.
This neocon destabilization of the world economy began with the U.S.-led invasion of Iraq in 2003
under President George W. Bush who squandered some $1 trillion on the bloody folly. But the neocons'
strategies have continued through their still-pervasive influence in Official Washington during President
Barack Obama's administration.
The neocons and their "liberal interventionist" junior partners have kept the "regime change"
pot boiling with the Western-orchestrated overthrow and killing of Libya's Muammar Gaddafi in 2011,
the proxy civil war in Syria to oust Bashar al-Assad, the costly economic embargoes against Iran,
and the U.S.-backed coup that ousted Ukraine's elected President Viktor Yanukovych last February.
All these targeted governments were first ostracized by the neocons and the major U.S. news organizations,
such as the Washington Post and the New York Times, which have become what amounts to neocon mouthpieces.
Whenever the neocons decide that it's time for another "regime change," the mainstream U.S. media
enlists in the propaganda wars.
The consequence of this cascading disorder has been damaging and cumulative. The costs of the
Iraq War strapped the U.S. Treasury and left less government maneuvering room when Wall Street crashed
in 2008. If Bush still had the surplus that he inherited from President Bill Clinton – rather than
a yawning deficit – there might have been enough public money to stimulate a much-faster recovery.
President Obama also wouldn't have been left to cope with the living hell that the U.S. occupation
brought to the people of Iraq, violent chaos that gave birth to what was then called "Al-Qaeda in
Iraq" and has since rebranded itself "the Islamic State."
But Obama didn't do himself (or the world) any favors when he put much of his foreign policy in
the hands of Democratic neocon-lites, such as Secretary of State Hillary Clinton, and Bush holdovers,
including Defense Secretary Robert Gates and Gen. David Petraeus. At State, Clinton promoted the
likes of neocon Victoria Nuland, the wife of arch-neocon Robert Kagan, and Obama brought in "liberal
interventionists" like Samantha Power, now the U.S. ambassador to the United Nations.
In recent years, the neocons and "liberal interventionists" have become almost indistinguishable,
so much so that Robert Kagan has opted to discard the discredited neocon label and call himself a
"liberal interventionist." [See Consortiumnews.com's "Obama's
True Foreign Policy 'Weakness.'"]
Manipulating Obama
Obama, in his nearly six years as president, also has shied away from imposing his more "realistic"
views about world affairs on the neocon/liberal-interventionist ideologues inside the U.S. pundit
class and his own administration. He has been outmaneuvered by clever insiders (as happened in 2009
on the Afghan "surge") or overwhelmed by some Official Washington "group think" (as was the case
in Libya, Syria, Iran and Ukraine).
Once all the "smart people" reach some collective decision that a foreign leader "must go," Obama
usually joins the chorus and has shown only rare moments of toughness in standing up to misguided
conventional wisdoms.
The one notable case was his decision in summer 2013 to resist pressure to destroy Syria's military
after a Sarin gas attack outside Damascus sparked a dubious rush to judgment blaming Assad's regime.
Since then, more evidence has pointed to a provocation by anti-Assad extremists who may have thought
that the incident would draw in the U.S. military on their side. [See Consortiumnews.com's "Was
Turkey Behind Syrian Sarin Attack?"]
It's now clear that if Obama had ordered a major bombing campaign against Assad's military in
early September 2013, he might have opened the gates of Damascus to a hellish victory by al-Qaeda-affiliated
extremists or the even more brutal Islamic State, since these terrorist groups have emerged as the
only effective fighters against Assad.
But the neocons and the "liberal interventionists" seemed oblivious to that danger. They had their
hearts set on Syrian "regime change," so were furious when their dreams were dashed by Obama's supposed
"weakness," i.e. his failure to do what they wanted. They also blamed Russian President Vladimir
Putin who brokered a compromise with Assad in which he agreed to surrender all of Syria's chemical
weapons while still denying a role in the Sarin attack.
By late September 2013, the disappointed neocons were acting out their anger by taking aim at
Putin. They recognized that a particular vulnerability for the Russian president was Ukraine and
the possibility that it could be pulled out of Russia's sphere of influence and into the West's orbit.
So, Carl Gershman, the neocon president of the U.S.-funded National Endowment for Democracy, took
to the op-ed page of the neocon-flagship Washington Post to sound the trumpet about Ukraine, which
he
called "the biggest prize."
But Gershman added that Ukraine was really only an interim step to an even bigger prize, the removal
of the strong-willed and independent-minded Putin, who, Gershman added, "may find himself on the
losing end not just in the near abroad [i.e. Ukraine] but within Russia itself." In other words,
the new neocon hope was for "regime change" in Kiev and Moscow. [See Consortiumnews.com's "Neocons'
Ukraine/Syria/Iran Gambit."]
Destabilizing the World
Beyond the recklessness of plotting to destabilize nuclear-armed Russia, the neocon strategy threatened
to shake Europe's fragile economic recovery from a painful recession, six years of jobless stress
that had strained the cohesion of the European Union and the euro zone.
Across the Continent, populist parties from the Right and Left have been challenging establishment
politicians over their inability to reverse the widespread unemployment and the growing poverty.
Important to Europe's economy was its relationship with Russia, a major market for agriculture and
manufactured goods and a key source of natural gas to keep Europe's industries humming and its houses
warm.
The last thing Europe needed was more chaos, but that's what the neocons do best and they were
determined to punish Putin for disrupting their plans for Syrian "regime change," an item long near
the top of their agenda along with their desire to "bomb, bomb, bomb Iran," which Israel has cited
as an "existential threat."
Putin also had sidetracked that possible war with Iran by helping to forge an interim agreement
constraining but not eliminating Iran's nuclear program. So, he became the latest target of neocon
demonization, a process in which the New York Times and the Washington Post eagerly took the lead.
To get at Putin, however, the first step was Ukraine where Gershman's NED was funding scores of
programs for political activists and media operatives. These efforts fed into mass protests against
Ukrainian President Yanukovych for balking at an EU association agreement that included a harsh austerity
plan designed by the International Monetary Fund. Yanukovych opted instead for a more generous $15
billion loan deal from Putin.
As the political violence in Kiev escalated – with the uprising's muscle supplied by neo-Nazi
militias from western Ukraine – neocons within the Obama administration discussed how to "midwife"
a coup against Yanukovych. Central to this planning was Victoria Nuland, who had been promoted to
assistant secretary of state for European affairs and was urging on the protesters, even passing
out cookies to protesters at Kiev's Maidan square.
According to an
intercepted phone call with U.S. Ambassador to Ukraine Geoffrey Pyatt, Nuland didn't think EU
officials were being aggressive enough. "Fuck the EU," she said as she brainstormed how "to help
glue this thing." She literally handpicked who should be in the post-coup government – "Yats is the
guy," a reference to Arseniy Yatsenyuk who would indeed become prime minister.
When the coup went down on Feb. 22 – spearheaded by neo-Nazi militias who seized government buildings
and forced Yanukovych and his officials to flee for their lives – the U.S. State Department quickly
deemed the new regime "legitimate" and the mainstream U.S. media dutifully stepped up the demonization
of Yanukovych and Putin.
Although Putin's position had been in support of Ukraine's status quo – i.e., retaining the elected
president and the country's constitutional process – the crisis was pitched to the American people
as a case of "Russian aggression" with dire comparisons made between Putin and Hitler, especially
after ethnic Russians in the east and south resisted the coup regime in Kiev and Crimea seceded to
rejoin Russia.
Starting a Trade War
Pressured by the Obama administration, the EU agreed to sanction Russia for its "aggression,"
touching off a tit-for-tat trade war with Moscow which reduced Europe's sale of farming and manufacturing
goods to Russia and threatened to disrupt Russia's natural gas supplies to Europe.
While the most serious consequences were to Ukraine's economy which went into freefall because
of the civil war, some of Europe's most endangered economies in the south also were hit hard by the
lost trade with Russia. Europe began to stagger toward the third dip in a triple-dip recession with
European markets experiencing major stock sell-offs.
The dominoes soon toppled across the Atlantic as major U.S. stock indices dropped, creating anguish
among many Americans just when it seemed the hangover from Bush's 2008 market crash was finally wearing
off.
Obviously, there are other reasons for the recent stock market declines, including fears about
the Islamic State's victories in Syria and Iraq, continued chaos in Libya, and exclusion of Iran
from the global economic system – all partly the result of neocon ideology. There have been unrelated
troubles, too, such as the Ebola epidemic in western Africa and various weather disasters.
But the world's economy usually can withstand some natural and manmade challenges. The real problem
comes when a combination of catastrophes pushes the international financial system to a tipping point.
Then, even a single event can dump the world into economic chaos, like what happened when Lehman
Brothers collapsed in 2008.
It's not clear whether the world is at such a tipping point today, but the stock market volatility
suggests that we may be on the verge of another worldwide recession. Meanwhile, the neocon masters
of chaos seem determined to keep putting their ideological obsessions ahead of the risks to Americans
and people everywhere.
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated
Press and Newsweek in the 1980s. You can buy his new book, America's Stolen Narrative, either
in
print here or as an e-book (from
Amazon and
barnesandnoble.com). For a limited time, you also can order Robert Parry's trilogy on the Bush
Family and its connections to various right-wing operatives for only $34. The trilogy includes
America's Stolen Narrative. For details on this offer,
click here.
"... The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculators expected returns. when this dynamic gets out of control, it is a bubble. ..."
"... That is exactly the point. Expected returns in stocks have nothing to do with earnings growth. http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2013/september/asset-price-bubbles-tomorrow-yesterday-never-today/ ..."
"... You think a rise in stock prices created by a fall in the cost of capital is a bubble. ..."
"... keeping the risk free rate at zero for 7 years is not a change in fundamentals. and if it is and it rises leading to a large fall in equity prices, you will be the first one crying uncle. so why put the economy through this? ..."
"... Rising stock prices allow corporations to raise debt, because the stock is put up as collateral. This makes funding easier, but it doesnt favor any particular purpose of the funding. It could be to buy back stock, for example. Said buy back can raise the stock price even more, which in turn can pay off the borrowing. Didnt cost a dime. ..."
"... It always seem to me that right wing economists credit businessmen with superhuman foresight and sophistication, except when it comes to the actions of the Fed and then something addles their brains and they become completely stupid. As I once put, it seems investors cant understand what the Fed is doing, even though they tell you. ..."
"... Thats it exactly. Markets are efficient, unless the government does anything, and then markets lose their minds and its the governments fault. ..."
"... Here is how they evaluate models: Good model; one that reaches the right good conclusions. Bad model; one that ends up saying stuff nobody should believe in. ..."
"... Obama could have at least made the investigations a high priority...but he let Holder, a Wall Street attorney, consign them to the lowest. ..."
"... Democrats filibuster-proof majority consisted of 58 Democrats and two independents who caucused with them. Only an inept President and Senate majority leader could have failed to take advantage of such a majority to implement significant parts of the party platform. ..."
"... Gullible folks like pgl and his coterie believe what these Democrats say and waste our time defending their neoliberal behavior. ..."
I wish Krugman would attack the view that is being propagated at the moment that low nominal interest
rates (it seems irrespective of the reason for them) foster bubbles. It doesn't make the slightest
bit of sense - leverage doesn't just magnify the gains, it magnifies the losses as well - what
really counts is expectations regardless of nominal interest rates.)
The distribution of the use of credit between pure financial speculation and productive investment
is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic
and technological prospects.
Great comment. I especially liked this point: "The distribution of the use of credit between pure
financial speculation and productive investment is not a function of" ....
Supervising regulators
need to look carefully at the ratio of credit used for financial trading compared to credit used
for what we've called real-economy matters. They should adjust the level of monitoring based on
this view while they also inform policy makers including those in the legislature.
There may be an opportunity in 2017 to revise the statutes so the public plainly says what
the rules of Commerce are in these financial 'inter-mediation' areas - society is better served
if more of such credit offerings go to investments in the real economy where inputs are real things
like employees, supplies, equipment/technologies. The public's law can effect this change.
david said in reply to JF...
except that a significant chunk of institutional investors have sticky nominal targets for return
thanks to the politics of return expectation setting (true for pension fund and endowments) --
low interest rates do encourage chasing phantoms or looking to extract some rents, for those subject
to that kind of pressure
Are there enough of those to dominate securities prices?
I don't see how there possibly could
be. For everyone trying to reach for yield there are a lot of people happy to arbitrage or otherwise
exploit those inefficiencies.
"The distribution of the use of credit between pure financial speculation and productive
investment is not a function of interest rates, but of things like bank culture, bank regulation
and macro-economic and technological prospects."
The relationship between low interest rates and bubbles has nothing to do with the above.
Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings
and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low.
Raising asset prices and the resultant higher net worth was supposed to lead to higher spending
today. But outsized returns also attracts speculation. what is so difficult to understand? John
Williams of SF Fed has shown how positive returns in asset markets raises the speculator's expected
returns. when this dynamic gets out of control, it is a bubble.
So you say. And yet, stock values today conform very well with the standard model Williams says
doesn't historically fit the data. While you are talking bubbles, the equity risk premium is parked
in the normal range.
so says Williams. dividend yields, earnings yields and risk premiums are not necessarily weighted
heavily in investors' formation of expected returns. past returns do, to a great extent. that
is what Williams shows.
Williams actually tries to model the rise in stock prices and defines any increase the model cannot
explain a bubble. Of course maybe his modeling is not entirely spot on and fundamentals can explain
the rise stock prices.
But this is not what you do as you see any asset price increase as a
bubble. Which is beyond stupid. Of course it would help if you ever bothered to do what Williams
attempted - use a basic model of financial economics. Then again my guess is that is beyond your
understanding of basic financial economics. So troll on!
You think a rise in stock prices created by a fall in the cost of capital is a bubble.
But no - it is a change in fundamentals.
keeping the risk free rate at zero for 7 years
is not a change in fundamentals. and if it is and it rises leading to a large fall in equity prices,
you will be the first one crying uncle. so why put the economy through this?
The first thing pgl did when stocks corrected this summer was to call for QE4...he panicked because
his portfolio was threatened...but claimed that he was only worried about workers!
Rising stock prices allow corporations to raise debt, because the stock is put up as collateral.
This makes funding easier, but it doesn't favor any particular purpose of the funding. It could
be to buy back stock, for example. Said buy back can raise the stock price even more, which in
turn can pay off the borrowing. Didn't cost a dime.
Let me be the fourth person to compliment that comment.
"leverage doesn't just magnify the gains,
it magnifies the losses as well - what really counts is expectations regardless of nominal interest
rates."
QFT!
The one hypothetical caveat (as BINY alluded to, knowingly or not) is that expectations often
get out of whack based on momentum trading. So hypothetically, lowering rates could possibly feed
that.
But guess what? Rates are already at zero. They can't go lower. It's not even a question of
lowering rates, but rather whether to keep them where they are. So a bubbles-from-monetary-fed-momentum
argument falls completely flat. We've been at zero for 7 years now!
It always seem to me that right wing economists credit businessmen with superhuman foresight
and sophistication, except when it comes to the actions of the Fed and then something addles their
brains and they become completely stupid. As I once put, it seems investors can't understand what
the Fed is doing, even though they tell you.
That's it exactly. Markets are efficient, unless the government does anything, and then markets
lose their minds and it's the government's fault.
And somehow the RW economists see no
problem with this model
DeDude said in reply to Sanjait...
Here is how they evaluate models: Good model; one that reaches the "right" good conclusions.
Bad model; one that ends up saying stuff nobody should believe in.
likbez said in reply to Sanjait...
"Markets are efficient, unless the government does anything"
This is a dangerous neoliberal dogma.
Total lie.
=== quote === The efficient market hypothesis (EMH) is a flavor of economic Lysenkoism which became popular for
the last 30 years in the USA. It is a pseudo scientific theory or, in more politically correct terms,
unrealistic idealization of market behavior. Like classic Lysenkoism in the past was supported by
Stalin's totalitarian state, it was supported by the power of neoliberal state, which is the state
captured by financial oligarchy (see Casino Capitalism and Quiet coup for more details).
Among the factors ignored by EMH is the positive feedback loop inherent in any system based on
factional reserve banking, the level of market players ignorance, unequal access to the real information
about the markets, the level of brainwashing performed on "lemmings" by controlled by elite MSM and
market manipulation by the largest players and the state.
Economics, it is said, is the study of scarcity. There is, however, one thing that certainly isn't
scarce, but which deserves the attention of economists - ignorance. ...Conventional economics analyses how individuals choose - maybe rationally, maybe not - from a
range of options. But this raises the question: how do they know what these options are? Many feasible
- even optimum - options might not occur to them. This fact has some important implications. ... Slightly simplifying, we can say that (financial) markets are mainly efficient in separation of fools
and their money... And efficient market hypothesis mostly bypasses important question about how the
inequity of resources which inevitably affects the outcomes of market participants. For example,
the level of education of market players is one aspect of the inequity of resources. Herd behavior
is another important, but overlooked in EMH factor.
And/or the markets are telling the Fed something, like they don't believe the Fed's forecasts about
growth and inflation and are betting otherwise, but the hawks at the Fed dismiss the markets and
say we need to raise rates now.
It's all very convenient reasoning about markets.
Vile Content said...
" constant repetition, especially in captive media, keeps this imaginary history in circulation no
matter how often it is shown to be false. " ~~pK~
Last night I was invited to a screening of "The Big Short," which I thought was terrific; who
knew that collateralized debt obligations and credit default swaps could be made into an edge-of-your-seat
narrative (with great acting)?
But there was one shortcut the narrative took, which was understandable and possibly necessary,
but still worth noting.
In the film, various eccentrics and oddballs make the discovery that subprime-backed securities
are garbage, which is pretty much what happened; but this is wrapped together with their realization
that there was a massive housing bubble, which is presented as equally contrary to anything anyone
respectable was saying. And that's not quite right.
It's true that Greenspan and others were busy denying the very possibility of a housing bubble.
And it's also true that anyone suggesting that such a bubble existed was attacked furiously - "You're
only saying that because you hate Bush!" Still, there were a number of economic analysts making the
case for a massive bubble. Here's Dean Baker in 2002. * Bill McBride (Calculated Risk) was on the
case early and very effectively. I keyed off Baker and McBride, arguing for a bubble in 2004 and
making my big statement about the analytics in 2005, ** that is, if anything a bit earlier than most
of the events in the film. I'm still fairly proud of that piece, by the way, because I think I got
it very right by emphasizing the importance of breaking apart regional trends.
So the bubble itself was something number crunchers could see without delving into the details
of mortgage-backed securities, traveling around Florida, or any of the other drama shown in the film.
In fact, I'd say that the housing bubble of the mid-2000s was the most obvious thing I've ever seen,
and that the refusal of so many people to acknowledge the possibility was a dramatic illustration
of motivated reasoning at work.
The financial superstructure built on the bubble was something else; I was clueless about that,
and didn't see the financial crisis coming at all.
More and more people are using the B-word about the housing market. A recent analysis * by Dean
Baker, of the Center for Economic Policy Research, makes a particularly compelling case for a housing
bubble. House prices have run well ahead of rents, suggesting that people are now buying houses for
speculation rather than merely for shelter. And the explanations one hears for those high prices
sound more and more like the rationalizations one heard for Nasdaq 5,000.
If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort....
This is the way the bubble ends: not with a pop, but with a hiss.
Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices
fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom
goes bust.
So the news that the U.S. housing bubble is over won't come in the form of plunging prices; it
will come in the form of falling sales and rising inventory, as sellers try to get prices that buyers
are no longer willing to pay. And the process may already have started.
Of course, some people still deny that there's a housing bubble. Let me explain how we know that
they're wrong.
One piece of evidence is the sense of frenzy about real estate, which irresistibly brings to mind
the stock frenzy of 1999. Even some of the players are the same. The authors of the 1999 best seller
"Dow 36,000" are now among the most vocal proponents of the view that there is no housing bubble.
Then there are the numbers. Many bubble deniers point to average prices for the country as a whole,
which look worrisome but not totally crazy. When it comes to housing, however, the United States
is really two countries, Flatland and the Zoned Zone.
In Flatland, which occupies the middle of the country, it's easy to build houses. When the demand
for houses rises, Flatland metropolitan areas, which don't really have traditional downtowns, just
sprawl some more. As a result, housing prices are basically determined by the cost of construction.
In Flatland, a housing bubble can't even get started.
But in the Zoned Zone, which lies along the coasts, a combination of high population density and
land-use restrictions - hence "zoned" - makes it hard to build new houses. So when people become
willing to spend more on houses, say because of a fall in mortgage rates, some houses get built,
but the prices of existing houses also go up. And if people think that prices will continue to rise,
they become willing to spend even more, driving prices still higher, and so on. In other words, the
Zoned Zone is prone to housing bubbles.
And Zoned Zone housing prices, which have risen much faster than the national average, clearly
point to a bubble....
EMichael said in reply to anne...
Yeah, the only thing he missed was the timing of the collapse.
The day he wrote this the Fed had
already raised rates 250% in one year, on the way to a total of 400% in the next 6 months.
Yet prices accelerated until the top was reached a year after the column.
Bubble, bubble, Toll's in trouble. This week, Toll Brothers, the nation's premier builder of McMansions,
announced that sales were way off, profits were down, and the company was walking away from already-purchased
options on land for future development.
Toll's announcement was one of many indications that the long-feared housing bust has arrived.
Home sales are down sharply; home prices, which rose 57 percent over the past five years (and much
more than that along the coasts), are now falling in much of the country. The inventory of unsold
existing homes is at a 13-year high; builders' confidence is at a 15-year low.
A year ago, Robert Toll, who runs Toll Brothers, was euphoric about the housing boom, declaring:
"We've got the supply, and the market has got the demand. So it's a match made in heaven." In a New
York Times profile of his company published last October, he dismissed worries about a possible bust.
"Why can't real estate just have a boom like every other industry?" he asked. "Why do we have to
have a bubble and then a pop?"
The current downturn, Mr. Toll now says, is unlike anything he's seen: sales are slumping despite
the absence of any "macroeconomic nasty condition" taking housing down along with the rest of the
economy. He suggests that unease about the direction of the country and the war in Iraq is undermining
confidence. All I have to say is: pop! ...
EMichael said in reply to anne...
"Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence of
any "macroeconomic nasty condition""
You gotta love builders and RE agents. It wasn't macro that caused it, it was default rates across
the board on supposedly safe investments that caused mortgage money supply to totally disappear.
One day people will understand that payments are the key to all finance.
JohnH said...
"and it is an outrage that basically nobody ended up being punished ."
Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made the
investigation of mortgage securities fraud DOJ's lowest priority. Krugman's Democratic proclivities
prevent him from stating the obvious.
I' m sure that pgl and his band of merry Obamabots will try to spin this in Obama's favor...I.e.
Congress prevented him from implementing the law, even though Congress has nothing to do with it.
Fact is, Obama has intentionally been a lame duck ever since he took office. He was even clueless
on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which brings
us to Trump. Many are so desperate for leadership after Obama's hollow presidency that they'll even
support a racist demagogue to avoid another empty White House.
JohnH said in reply to anne...
Oh, please...Krugman could barely criticize Obama, even when Obama introduced an austerity budget
back in 2011.
The tendency of people like Krugman to overlook Democrats' bad behavior only encourages
more bad behavior. If Krugman really cared about the policies he champions, he would let the chips
fall wherever...and not let empty suits like Obama get away with austerity and failure to enforce
the law when Wall Street willfully violates it.
pgl said in reply to JohnH...
Did you forgot to read the post before firing off your usual hate filled fact free rant? Here - let
me help you out:
"some members of the new commission had a different goal. George Santayana famously
remarked that "those who cannot remember the past are condemned to repeat it." What he didn't point
out was that some people want to repeat the past - and that such people have an interest in making
sure that we don't remember what happened, or that we remember it wrong. Sure enough, some commission
members sought to block consideration of any historical account that might support efforts to rein
in runaway bankers."
It seems Krugman indeed bashed how the government sort of let this crooks off the hook. We know
you have an insane hatred for President Obama. But do you also hate your poor mom? Why else would
you continue to write such incredibly stupid things?
JohnH said in reply to pgl...
As I expected, rationalizations for Obama's refusal to enforce the law...since when does the buck
no longer stop at the White House? And what's with trying to defend people who refuse to do their
job and uphold the rule of law?
pgl said in reply to JohnH...
Krugman did not rationalize that. Neither have I.
Either you know you are lying or you flunked
preK reading.
JohnH said in reply to pgl...
Of course pgl rationalizs Obama's failures...he spent a lot of time denying that Obama introduced
and signed off on austerity...and that he proposed cutting Social Security. And now he can't admit
that Obama and Holder have refused to defend the rule of law by not prosecuting...or even seriously
investigating...Wall Street criminality.
RGC said in reply to William...
Prosecutions don't require congressional action.
Most of the New Deal was accomplished in 100 days.
Promotion by a president can galvanize action.
pgl said in reply to EMichael...
The lack of prosecutions was a bad thing. Of course any prosecutor would tell you putting rich people
in jail for anything is often difficult. Rich people get to hire expensive, talented, and otherwise
slimy defense attorneys. I have to laugh at the idea that JohnH thinks he could have pulled this
off. The slimy defense attorneys would have had his lunch before the judge's gavel could come down.
JohnH said in reply to pgl...
Obama could have at least made the investigations a high priority...but he let Holder, a Wall Street
attorney, consign them to the lowest.
pgl is intent on explaining away Obama's failure to enforce
the law...thereby encouraging more lawlessness.
JohnH said in reply to William...
Democrats' filibuster-proof majority consisted of 58 Democrats and two independents who caucused
with them. Only an inept President and Senate majority leader could have failed to take advantage
of such a majority to implement significant parts of the party platform. Even Lieberman had a good
record on many issues. Except for ACA, it turned out to be a do-nothing Congress, reflecting an abject
lack of leadership...which is why many are so desperate for leadership. Having lacked it for seven
years, many are willing to turn to anybody, even Trump, to provide it. Pathetic!
RGC said in reply to William...
No vitriol, just facts. And Obama had the example of FDR to follow - why didn't he follow it? I have
been deeply disappointed in Obama.
JohnH said in reply to pgl...
pgl conveniently forgets my choice words about Bill Clinton, Harry Reid and Nancy Pelosi. What I
object to is Democrats who position themselves to sound like FDR and then prosecute a neo-liberal
agenda.
Gullible folks like pgl and his coterie believe what these Democrats say and waste our
time defending their neoliberal behavior.
"... Summers is right that bubbles are usually accompanied by some kind of financial euphoria. ..."
"... There will be massive pushback because so many have wasted many years and resources building mathematically elegant but fatally flawed models that do not make accurate predictions on even represent the fundamentals of any economy. ..."
"It seems to me looking at a year when the stock market has gone down a bit, credit spreads
have widened substantially and the dollar has been very strong it is hard to say that now is
the time to fire a shot across the bow of financial euphoria. Looking especially at emerging
markets I would judge that under-confidence and excessive risk aversion are a greater threat
over the next several years than some kind of financial euphoria."
Summers is right that bubbles are usually accompanied by some kind of financial euphoria.
I disagree with your assessment. People (elite?) are talking about unusual solutions because fiscal
policy is being blocked politically.
MMT doesn't seem that different from Keynesianism, except proponents have very big chips on
their shoulders for some reason.
Right now the Keynesians are arguing that the Fed shouldn't raise rates. Are the MMTers arguing
any differently? Or are they merely giving us the blue prints for utopia. Blue prints don't help
much if the politics are against you.
Syaloch said in reply to Peter K....
Great question.
If I have two black boxes that always produce exactly the same outputs, does
it matter whether their internal mechanisms are different?
Dan Kervick said in reply to Syaloch...
"Or maybe they would be effective because people believe they ought to be effective."
Possibly. I think back in the 80's when monetarism was the super-sexy new view, there were
a lot of people who thought inflation was mainly a function of the monetary base, so if the Fed
made a big public stink about pumping up the monetary base, that could be counted on the boost
inflation expectations, at least in some quarters, and the high expectations would in turn help
to boost actual inflation. That doesn't seem to be the case any longer.
Dan Kervick said in reply to pgl...
The heyday of monetarism was the late 70's and early 80's. That's when Friedman's monetary theory
of inflation caught the public imagination, and it's the only time the Fed ever attempted (briefly)
to target the money supply.
Conservative spear-carrier Niall Ferguson knows how important monetarism
was to the neoliberal movement, and how big a deal it was during the Thatcher-Reagan era.
The heyday of monetarism was the late 70's and early 80's. That's when Friedman's monetary theory
of inflation caught the public imagination, and it's the only time the Fed ever attempted (briefly)
to target the money supply.
Conservative spear-carrier Niall Ferguson knows how important monetarism
was to the neoliberal movement, and how big a deal it was during the Thatcher-Reagan era.
"Given what we know about representative-agent models…there is not the slightest reason
for us to think that the conditions under which they should work are fulfilled. The claim that
representative-agent models provide microfundations succeeds only when we steadfastly avoid
the fact that representative-agent models are just as aggregative as old-fashioned Keynesian
macroeconometric models. They do not solve the problem of aggregation; rather they assume that
it can be ignored."
This the reason Macro needs to move into more data driven empirics.
There will be massive pushback because so many have wasted many years and resources building
mathematically elegant but fatally flawed models that do not make accurate predictions on even
represent the fundamentals of any economy.
The Advantages of Higher Inflation - The New York Times
From the article:
"A critical problem with aiming for higher inflation is how to get from here to there. The
Fed has spent enormous effort anchoring people's expectations to 2 percent. Even economists sympathetic
to a higher target are wary of what such a shift might do to its credibility.
"'A perfect world, where you could commit to 4 percent and everybody believed it, would be
great,' Mr. Mishkin told me. 'We are not in a perfect world. Moving much higher than 2 percent
raises the risk that expectations become unanchored.'
"So here is an alternative proposal. If the Fed is too cautious to risk unhinging inflationary
expectations, how about just delivering what it has promised? Among economists and investors,
the problem with the Fed's 2 percent target is that just about everybody believes it is really
a ceiling. That makes it even harder for inflation to rise to that level. The market expects the
Fed to act pre-emptively to ensure it never goes over that line - which is what it seems to be
doing now.
"If the Fed is not going to aim for higher inflation, the least it could do is re-anchor expectations
to the goal it established, allowing inflation to fluctuate above and below a 2 percent average.
That alone might help deal with the next economic crisis.
"'We haven't fully tested whether we can deal with this kind of crisis with a 2 percent inflation
target,' said David H. Romer of the University of California, Berkeley. 'Central banks have lots
of tools. If they say they are willing to keep using them until they get where they want, they
can eventually do it.'"
This highlights a confusing aspect of inflation targets. If the Fed simply announces a higher
inflation target without taking any other action, have they really done anything? What's more,
they not only need to announce the new target, they need to convince markets that they are willing
to do whatever it takes to hit that target -- it's all about credibility and re-anchoring expectations.
And while engaging in QE to push down longer-term rates might help make that statement more convincing,
it doesn't seem to be strictly necessary for the new target to be effective.
Thus inflation targets seem in at least some cases to operate purely through psychological
manipulation, as a sort of placebo effect: inflation rises not because the Fed has injected money
into the economy today or changed the cost of lending today, but rather because the Fed is able
to "trick" markets into believing it will rise in the future.
Peter K. said in reply to Syaloch...
And the reverse is true. The markets are skeptical that the Fed will hit its 2 percent ceiling
target any time soon.
Inflation expectations are becoming un-anchored on the downside but nobody cares because ....
oil.
Dan Kervick said in reply to Peter K....
I guess we'll all have to wait for Yellen's future memoirs to know the thinking that was going
on inside the Fed during 2015. But it's interesting that both Yellen and Stanley Fischer, both
formerly held in gigantic respect by the more prominent liberal economists, are now the targets
of ire for apparently not seeing eye-to-eye with their opinionated friends on the outside. Despite
the fact that BoG members have access to mountains of internal research and policy input that
people on the outside can only guess at, the default position of the outsiders is that the insiders
have been corrupted by power and fast-talking bankers or something.
Here's my conjecture about
what the Fed's thinking is: The Fed recognizes that keeping policy interest rates down at an unprecedentedly
low basement level for years on end sends this message to the global economy: the US economy is
a sick basket case. It needs the permanent life support of extraordinary monetary policy intervention
to be kept from flat-lining.
I think the people who actually work inside the Fed think that is total bunk, and that as they
gradually wean the financial sector off of the monetary ventilator, nothing bad is going to happen
at all. The patient is going to get up, walk around and breathe normally. And when that happens,
it will say, "Wow, maybe I should have tried that earlier!" Business confidence will spurt; people
will think, "Hey, I guess we're not in that gloomy post-2008 depression any more!", and the country
will get on with its business more cheerfully.
The Fed has had a devil of a time getting back to normal, because despite its best intentions
it has inadvertently re-defined a condition of zero rates and excess reserves bleeding from bankers's
ears as the new normal, and created an out-of-control public fixation on monetary policy intervention.
Fed communications strategies aimed at guiding the market have turned back on them in a reflexive
and self-defeating cycle. They got themselves into a terrible pattern for a while where every
time there was good economic news, the markets would respond negatively because they interpreted
the good news as evidence that the Fed would "taper" - which they regarded as bad news! And if
there was bad news, the markets would respond favorably because they saw the bad news as evidence
that the fed would "remain aggressive" - which is good news! Obviously that's a pretty pathological
cycle to be in: it's a mechanism fro economic self-stultification. Indicating a move toward normalization
too suddenly in 2013 caused the irrational "taper tantrum", so they have had to go more slowly
this time around with the hand-holding and by building a longer "guidance" runway.
Their chief need now is to push back against the monetary maniacs and hyperventilators who
keep trying to convince impressionable business people and consumers that the Fed has somehow
been "keeping the economy" afloat, and that when interest rates go up - from 1/4 to 1/2 of a percent!
- we're all going to drown. If you have enough ambulance chasers convincing people they are sick
and damaged, they will act sick and damaged.
"... I get the feeling that if doing a film review of The Force Awakens , most economists would be rooting for the Empire to win - after all the empire will bring free trade within its borders, like the EU. ..."
"... In market fundamentalist world, markets dont fail. They can only be failed. Though its still not clear how they think a little bit of government incentive for loans to low income borrowers caused the entire financial sector to lose its mind wrt CDOs. ..."
"... The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects. ..."
"... ....Supervising regulators need to look carefully at the ratio of credit used for financial trading compared to credit used for what weve called real-economy matters. They should adjust the level of monitoring based on this view while they also inform policy makers including those in the legislature. ..."
"... except that a significant chunk of institutional investors have sticky nominal targets for return thanks to the politics of return expectation setting (true for pension fund and endowments) -- low interest rates do encourage chasing phantoms or looking to extract some rents, for those subject to that kind of pressure ..."
"... The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculators expected returns. when this dynamic gets out of control, it is a bubble. ..."
"... Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made the investigation of mortgage securities fraud DOJs lowest priority. Krugmans Democratic proclivities prevent him from stating the obvious. ..."
"... Fact is, Obama has intentionally been a lame duck ever since he took office. He was even clueless on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which brings us to Trump. Many are so desperate for leadership after Obamas hollow presidency that theyll even support a racist demagogue to avoid another empty White House. ..."
"... Yes you are correct. From 2001 into 2008 when all of the liar and ninja loans were being made, not one government official stepped forward to investigate the possibility of fraud, the predatory lending, the misrepresentation of loans taking place, the loans with teaser rates which later ballooned, the packing of loans with deceptive fees, the illegal kick backs, etc. Not one. To make matters worst, the administration from 2001-2008 aligned itself with the banks along with the maestro hisself Greenspan. ..."
"... When state AGs took on the burden of investigating the flagrant violations, the administration moves to block them saying they had no jurisdiction to do so. It did this through the OCC issuing rules preventing the states from prosecuting the banks. Besides blocking any investigation, the OCC failed in its mission to audit the banks for which it was by law to do. ..."
But some members of the new commission
had a different goal. ... Peter Wallison of the American Enterprise Institute,
wrote to a fellow Republican on the commission ... it was important that what they said
"not undermine the ability of the new House G.O.P. to modify or repeal Dodd-Frank"...; the
party line, literally, required telling stories that would help Wall Street do it all over
again.
Which brings me to a new movie the enemies of financial regulation really, really don't
want you to see.
"The Big Short" ... does
a terrific job of making Wall Street skulduggery entertaining, of exploiting the inherent black
humor of how it went down. ... But you don't want me to play film critic; you want to know
whether the movie got the underlying ... story right. And the answer is yes, in all the ways
that matter. ...
The ...housing ... bubble ... was inflated largely via opaque financial schemes that in
many cases amounted to outright fraud - and it is an outrage that basically nobody ended up
being punished ... aside from innocent bystanders, namely the millions of workers who lost
their jobs and the millions of families that lost their homes.
While the movie gets the essentials of the financial crisis right, the true story ... is
deeply inconvenient to some very rich and powerful people. They and their intellectual hired
guns have therefore spent years disseminating an alternative view ... that places all the blame
... on ... too much government, especially government-sponsored agencies supposedly pushing
too many loans on the poor.
Never mind that the supposed evidence for this view has been
thoroughly debunked..., constant repetition, especially in captive media, keeps this imaginary
history in circulation no matter how often it is shown to be false.
Sure enough, "The Big Short" has already been the subject of
vitriolicattacks
in Murdoch-controlled newspapers...
The ... people who made "The Big Short" should consider the attacks a kind of compliment:
The attackers obviously worry that the film is entertaining enough that it will expose a large
audience to the truth. Let's hope that their fears are justified.
btg said in reply to pgl...
I get the feeling that if doing a film review of "The Force Awakens", most economists would
be rooting for the Empire to win - after all the empire will bring free trade within its borders,
like the EU. Krugman would not, however.
Sanjait said...
In market fundamentalist world, markets don't fail. They can only be failed. Though it's still
not clear how they think a little bit of government incentive for loans to low income borrowers
caused the entire financial sector to lose its mind wrt CDOs.
Are markets efficient or not? I
feel like the fundiesndont really have a coherent explanation for what happened, other than insisting
the government somehow did it.
reason said...
I wish Krugman would attack the view that is being propagated at the moment that low nominal
interest rates (it seems irrespective of the reason for them) foster bubbles. It doesn't make
the slightest bit of sense - leverage doesn't just magnify the gains, it magnifies the losses
as well - what really counts is expectations regardless of nominal interest rates.)
The distribution of the use of credit between pure financial speculation and productive
investment is not a function of interest rates, but of things like bank culture, bank regulation
and macro-economic and technological prospects.
It always seem to me that right wing economists credit businessmen with superhuman
foresight and sophistication, except when it comes to the actions of the Fed and then
something addles their brains and they become completely stupid. As I once put, it seems
investors can't understand what the Fed is doing, even though they tell you.
Good model; one that reaches the "right" good conclusions. Bad model; one that ends up
saying stuff nobody should believe in.
likbez said in reply to Sanjait...
"Markets are efficient, unless the government does anything"
This is a dangerous neoliberal dogma. Total lie.
=== quote ===
The efficient market hypothesis (EMH) is a flavor of economic Lysenkoism which became
popular for the last 30 years in the USA. It is a pseudo scientific theory or, in more
politically correct terms, unrealistic idealization of market behavior. Like classic
Lysenkoism in the past was supported by Stalin's totalitarian state, it was supported by
the power of neoliberal state, which is the state captured by financial oligarchy (see
Casino Capitalism and Quiet coup for more details).
Among the factors ignored by EMH is the positive feedback loop inherent in any system
based on factional reserve banking, the level of market players ignorance, unequal access
to the real information about the markets, the level of brainwashing performed on
"lemmings" by controlled by elite MSM and market manipulation by the largest players and
the state.
Economics, it is said, is the study of scarcity. There is, however, one thing that
certainly isn't scarce, but which deserves the attention of economists - ignorance.
...Conventional economics analyses how individuals choose - maybe rationally, maybe not -
from a range of options. But this raises the question: how do they know what these options
are? Many feasible - even optimum - options might not occur to them. This fact has some
important implications. ...
Slightly simplifying, we can say that (financial) markets are mainly efficient in
separation of fools and their money... And efficient market hypothesis mostly bypasses
important question about how the inequity of resources which inevitably affects the
outcomes of market participants. For example, the level of education of market players is
one aspect of the inequity of resources. Herd behavior is another important, but overlooked
in EMH factor.
Great comment. I especially liked this point: "The distribution of the use of credit between
pure financial speculation and productive investment is not a function of"
....Supervising regulators need to look carefully at the ratio of credit used for financial
trading compared to credit used for what we've called real-economy matters. They should adjust
the level of monitoring based on this view while they also inform policy makers including those
in the legislature.
There may be an opportunity in 2017 to revise the statutes so the public plainly says what
the rules of Commerce are in these financial 'inter-mediation' areas - society is better served
if more of such credit offerings go to investments in the real economy where inputs are real things
like employees, supplies, equipment/technologies. The public's law can effect this change.
david said in reply to JF...
except that a significant chunk of institutional investors have sticky nominal targets
for return thanks to the politics of return expectation setting (true for pension fund and endowments)
-- low interest rates do encourage chasing phantoms or looking to extract some rents, for those
subject to that kind of pressure
BenIsNotYoda said in reply to reason...
"The distribution of the use of credit between pure financial speculation and productive
investment is not a function of interest rates, but of things like bank culture, bank regulation
and macro-economic and technological prospects."
The relationship between low interest rates and bubbles has nothing to do with the above.
Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings
and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low.
Raising asset prices and the resultant higher net worth was supposed to lead to higher spending
today. But outsized returns also attracts speculation. what is so difficult to understand? John
Williams of SF Fed has shown how positive returns in asset markets raises the speculator's expected
returns. when this dynamic gets out of control, it is a bubble.
Sanjait said in reply to BenIsNotYoda...
It's hard to see how to your claim that expected returns are high when earnings yields across
the board are historically low.
BenIsNotYoda said in reply to Sanjait...
That is exactly the point. Expected returns in stocks have nothing to do with earnings growth.
It does not seem reasonable or fair to pay practically no interest on savings, which is a consequence
of Fed policy. A consequence of this is that people go into risky investments that lead to catastrophe,
sometimes widespread. If the goal was to get people to spend (i.e. consume) more, it seems that
they are persistently & stubbornly frugal.
Last night I was invited to a screening of "The Big Short," which I thought was terrific; who
knew that collateralized debt obligations and credit default swaps could be made into an edge-of-your-seat
narrative (with great acting)?
But there was one shortcut the narrative took, which was understandable and possibly necessary,
but still worth noting.
In the film, various eccentrics and oddballs make the discovery that subprime-backed securities
are garbage, which is pretty much what happened; but this is wrapped together with their realization
that there was a massive housing bubble, which is presented as equally contrary to anything anyone
respectable was saying. And that's not quite right.
It's true that Greenspan and others were busy denying the very possibility of a housing bubble.
And it's also true that anyone suggesting that such a bubble existed was attacked furiously -
"You're only saying that because you hate Bush!" Still, there were a number of economic analysts
making the case for a massive bubble. Here's Dean Baker in 2002. * Bill McBride (Calculated Risk)
was on the case early and very effectively. I keyed off Baker and McBride, arguing for a bubble
in 2004 and making my big statement about the analytics in 2005, ** that is, if anything a bit
earlier than most of the events in the film. I'm still fairly proud of that piece, by the way,
because I think I got it very right by emphasizing the importance of breaking apart regional trends.
So the bubble itself was something number crunchers could see without delving into the details
of mortgage-backed securities, traveling around Florida, or any of the other drama shown in the
film. In fact, I'd say that the housing bubble of the mid-2000s was the most obvious thing I've
ever seen, and that the refusal of so many people to acknowledge the possibility was a dramatic
illustration of motivated reasoning at work.
The financial superstructure built on the bubble was something else; I was clueless about that,
and didn't see the financial crisis coming at all.
More and more people are using the B-word about the housing market. A recent analysis * by
Dean Baker, of the Center for Economic Policy Research, makes a particularly compelling case for
a housing bubble. House prices have run well ahead of rents, suggesting that people are now buying
houses for speculation rather than merely for shelter. And the explanations one hears for those
high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.
If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort....
This is the way the bubble ends: not with a pop, but with a hiss.
Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices
fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom
goes bust.
So the news that the U.S. housing bubble is over won't come in the form of plunging prices;
it will come in the form of falling sales and rising inventory, as sellers try to get prices that
buyers are no longer willing to pay. And the process may already have started.
Of course, some people still deny that there's a housing bubble. Let me explain how we know
that they're wrong.
One piece of evidence is the sense of frenzy about real estate, which irresistibly brings to
mind the stock frenzy of 1999. Even some of the players are the same. The authors of the 1999
best seller "Dow 36,000" are now among the most vocal proponents of the view that there is no
housing bubble.
Then there are the numbers. Many bubble deniers point to average prices for the country as
a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United
States is really two countries, Flatland and the Zoned Zone.
In Flatland, which occupies the middle of the country, it's easy to build houses. When the
demand for houses rises, Flatland metropolitan areas, which don't really have traditional downtowns,
just sprawl some more. As a result, housing prices are basically determined by the cost of construction.
In Flatland, a housing bubble can't even get started.
But in the Zoned Zone, which lies along the coasts, a combination of high population density
and land-use restrictions - hence "zoned" - makes it hard to build new houses. So when people
become willing to spend more on houses, say because of a fall in mortgage rates, some houses get
built, but the prices of existing houses also go up. And if people think that prices will continue
to rise, they become willing to spend even more, driving prices still higher, and so on. In other
words, the Zoned Zone is prone to housing bubbles.
And Zoned Zone housing prices, which have risen much faster than the national average, clearly
point to a bubble....
Yeah, the only thing he missed was the timing of the collapse. The day he wrote this the Fed
had already raised rates 250% in one year, on the way to a total of 400% in the next 6 months.
Yet prices accelerated until the top was reached a year after the column.
Bubble, bubble, Toll's in trouble. This week, Toll Brothers, the nation's premier builder of
McMansions, announced that sales were way off, profits were down, and the company was walking
away from already-purchased options on land for future development.
Toll's announcement was one of many indications that the long-feared housing bust has arrived.
Home sales are down sharply; home prices, which rose 57 percent over the past five years (and
much more than that along the coasts), are now falling in much of the country. The inventory of
unsold existing homes is at a 13-year high; builders' confidence is at a 15-year low.
A year ago, Robert Toll, who runs Toll Brothers, was euphoric about the housing boom, declaring:
"We've got the supply, and the market has got the demand. So it's a match made in heaven." In
a New York Times profile of his company published last October, he dismissed worries about a possible
bust. "Why can't real estate just have a boom like every other industry?" he asked. "Why do we
have to have a bubble and then a pop?"
The current downturn, Mr. Toll now says, is unlike anything he's seen: sales are slumping despite
the absence of any "macroeconomic nasty condition" taking housing down along with the rest of
the economy. He suggests that unease about the direction of the country and the war in Iraq is
undermining confidence. All I have to say is: pop! ...
"Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence
of any "macroeconomic nasty condition""
You gotta love builders and RE agents. It wasn't macro that caused it, it was default rates
across the board on supposedly safe investments that caused mortgage money supply to totally disappear.
One day people will understand that payments are the key to all finance.
JohnH said...
"and it is an outrage that basically nobody ended up being punished ."
Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made
the investigation of mortgage securities fraud DOJ's lowest priority. Krugman's Democratic proclivities
prevent him from stating the obvious.
I' m sure that pgl and his band of merry Obamabots will try to spin this in Obama's favor...I.e.
Congress prevented him from implementing the law, even though Congress has nothing to do with
it.
Fact is, Obama has intentionally been a lame duck ever since he took office. He was even
clueless on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which
brings us to Trump. Many are so desperate for leadership after Obama's hollow presidency that
they'll even support a racist demagogue to avoid another empty White House.
run75441 said in reply to JohnH...
Yes you are correct. From 2001 into 2008 when all of the liar and ninja loans were being
made, not one government official stepped forward to investigate the possibility of fraud, the
predatory lending, the misrepresentation of loans taking place, the loans with "teaser" rates
which later ballooned, the packing of loans with deceptive fees, the illegal kick backs, etc.
Not one. To make matters worst, the administration from 2001-2008 aligned itself with the banks
along with the maestro hisself "Greenspan."
When state AGs took on the burden of investigating the flagrant violations, the administration
moves to block them saying they had no jurisdiction to do so. It did this through the OCC issuing
rules preventing the states from prosecuting the banks. Besides blocking any investigation, the
OCC failed in its mission to audit the banks for which it was by law to do.
What was the SEC doing during this time period? What was the administration doing with Enron
in 2002? Didn't Cheney get sued by the GAO to find out who he was talking to at Enron?
Yes there is the matter of not prosecuting banking execs after 2008; however, the issue was
allowed to grow during the prior administration and left on the next administration's doorstep.
Closing the barn door after the perps have escaped is a bit late and it should have been stopped
dead in its tracks during the prior 8 years.
So keep going down that path and we can also talk about fraud with tranching, CDS, Naked CDs,
reserves, etc.
So, where was the administration during this time period?
DeDude said...
Subprime loans in poor communities represented a very small fraction of the total subprime
volume and defaulted loans. I mean talk about the mouse and the elephant. Yet the FoxBots are
being convinced to look at those scary mice and all that thundering noise they are making.
Alex H said in reply to Peter K....
In the book, one of the supposed villains went to the division of AIG that was selling CDSes (i.e.
"insuring" the toxic crap) and explained to a direct subordinate of the division exactly how his
bank and the other companies of Wall Street were suckering them into taking on absurd risks. In
*2005*.
Because he was massively short in this market, and AIG pulling the plug would have popped
the bubble. Nobody else was selling CDSes (then), and Wall Street couldn't have pretended that
their risks were covered without them. That doesn't make him a hero, but seriously, if AIG had
listened, no collapse.
Several of the characters effectively called up the ratings agencies to shout at them. Others
called NYT and WSJ reporters, who ignored them. Then they called the SEC's enforcement division,
who ignored them.
Besides, if the other side in all of those bets were foreign "widows and orphans", then it
wouldn't have wrecked the financial system. If Bear Stearns had been sitting as the middleman
between a Korean pension fund and Steve Eisman, they'd have just taken their cut and moved on.
The
seventh edition of
Manias, Panics, and Crashes has recently been published by Palgrave Macmillan.
Charles Kindleberger of MIT wrote the first edition, which appeared in 1978, and followed
it with three more editions. Robert Aliber of the Booth School of Business at the University
of Chicago took over the editing and rewriting of the fifth edition, which came out in
2005. (Aliber is also the author of another well-known book on international finance,
The New International Money Game.) The continuing popularity of Manias,
Panics and Crashes shows that financial crises continue to be a matter of widespread
concern.
Kindleberger built upon the work of
Hyman Minsky, a faculty member at Washington University in St. Louis. Minsky was
a proponent of what he called the "financial instability hypothesis," which posited that
financial markets are inherently unstable. Periods of financial booms are followed by
busts, and governmental intervention can delay but not eliminate crises. Minsky's work
received a great deal of attention during the global financial crisis (see
here and
here; for a summary of Minksy's work, see
Why Minsky Mattersby L. Randall Wray of the University of Missouri-Kansas City
and the Levy Economics Institute).
Kindleberger provided a more detailed description of the stages of a financial crisis.
The period preceding a crisis begins with a "displacement," a shock to the system. When
a displacement improves the profitability of at least one sector of an economy, firms
and individuals will seek to take advantage of this opportunity. The resulting demand
for financial assets leads to an increase in their prices. Positive feedback in asset
markets lead to more investments and financial speculation, and a period of "euphoria,"
or mania develops.
At some point, however, insiders begin to take profits and withdraw from the markets.
Once market participants realize that prices have peaked, flight from the markets becomes
widespread. As prices plummet, a period of "revulsion" or panic ensues. Those who had
financed their positions in the market by borrowing on the promise of profits on the
purchased assets become insolvent. The panic ends when prices fall so far that some traders
are tempted to come back into the market, or
trading is limited by the authorities, or a lender of last resort intervenes to halt
the decline.
In addition to elaborating on the stages of a financial crisis, Kindleberger also
placed them in an international context. He wrote about the propagation of crises through
the arbitrage of divergences in the prices of assets across markets or their substitutes.
Capital flows and the spread of euphoria also contribute to the simultaneous rises in
asset prices in different countries. (Piero
Pasotti and Alessandro Vercelli of the University of Siena provide an analysis of
Kindleberger's contributions.)
Aliber has continued to update the book, and the new edition has a chapter on the
European sovereign debt crisis. (The prior edition covered the events of 2008-09.) But
he has also made his own contributions to the Minsky-Kindleberger (and now –Aliber) framework.
Aliber characterizes the decades since the early 1980s as "…the most tumultuous in monetary
history in terms of the number, scope and severity of banking crises." To date, there
have been four waves of such crises, which are almost always accompanied by currency
crises. The first wave was the debt crisis of developing nations during the 1980s, and
it was followed by a second wave of crises in Japan and the Nordic countries in the early
1990s. The third wave was the Asian financial crisis of 1997-98, and the fourth is the
global financial crisis.
Aliber emphasizes the role of cross-border investment flows in precipitating the crises.
Their volatility has risen under flexible exchange rates, which allow central banks more
freedom in formulating monetary policies that influence capital allocation. He also draws
attention to the increases in household wealth due to rising asset prices and currency
appreciation that contribute to consumption expenditures and amplify the boom periods.
The reversal in wealth once investors revise their expectations and capital begins to
flow out makes the resulting downturn more acute.
These views are consistent in many ways with those of
Claudio Borio of the Bank for International Settlements (see also
here). He has written that the international monetary and financial system amplifies
the "excess financial elasticity," i.e., the buildup of financial imbalances that characterizes
domestic financial markets. He identifies two channels of transmission. First, capital
inflows contribute to the rise in domestic credit during a financial boom. The impact
of global conditions on domestic financial markets exacerbates this development (see
here). Second, monetary regimes may facilitate the expansion of monetary conditions
from one country to others. Central bankers concerned about currency appreciation and
a loss of competitiveness keep interest rates lower than they would otherwise, which
furthers a domestic boom. In addition, the actions of central banks with international
currencies such as the dollar has international ramifications, as the current widespread
concern about the impending rise in the Federal Funds rate shows.
Aliber ends the current edition of Manias, Panics and Crashes with an appendix
on China's financial situation. He compares the surge in China's housing markets with
the Japanese boom of the 1980s and subsequent bust that initiated decades of slow economic
growth. An oversupply of new housing in China has resulted in a
decline in prices that threatens the solvency of property developers and the banks
and shadow banks that financed them. Aliber is dubious of the claim that the Chinese
government will support the banks, pointing out that such support will only worsen
China's indebtedness. The need for an eighth edition of Manias, Panics and Crashes
may soon be apparent.
"... Any serious discussion of Fed policy would note that the banking industry appears to have a grossly disproportionate say in the country's monetary policy. ..."
But what is even more striking is the Post's ability to
treat the Fed a neutral party when the evidence is so
overwhelming in the opposite direction. The majority of
the Fed's 12 district bank presidents have long been
pushing for a rate hike. While there are some doves among
this group, most notably Charles Evans, the Chicago bank
president, and Narayana Kocherlakota, the departing
president of the Minneapolis bank, most of this group has
publicly pushed for higher rate hikes for some time. By
contrast, the governors who are appointed through the
democratic process, have been far more cautious about
raising rates.
It should raise serious concerns that the bank
presidents, who are appointed through a process dominated
by the banking industry, has such a different perspective
on the best path forward for monetary policy. With only
five of the seven governor slots currently filled, there
are as many presidents with voting seats on the Fed's Open
Market Committee as governors. In total, the governors are
outnumbered at meetings by a ratio of twelve to five.
Any serious discussion of Fed policy would note that
the banking industry appears to have a grossly
disproportionate say in the country's monetary policy.
Furthermore, it seems determined to use that influence to
push the Fed on a path that slows growth and reduces the
rate of job creation. The Post somehow missed this story
or at least would prefer that the rest of us not take
notice.
Looks like growth of financial sector represents direct threat to the society
Notable quotes:
"... Perhaps the financialization of the economy and rising inequality leads to a corruption of the political process which leads to monetary, currency and fiscal policy such that labor markets are loose and inflation is low. ..."
"... Growth of the non-financial-sector == growth in productivity ..."
"... In complex subject matters, even the most competent person joining a company has to become familiar with the details of the products, the industry niche, the processes and professional/personal relationships in the company or industry, etc. All these are not really teachable and require between months and years in the job. This represents a significant sunk cost. Sometimes (actually rather often) experience within the niche/industry is in a degree portable between companies, but some company still had to employ enough people to build this experience, and it cannot be readily bought by bringing in however competent freshers. ..."
Working Paper: : In the years since 1980, there has been a well-documented upward redistribution
of income. While there are some differences by methodology and the precise years chosen, the top
one percent of households have seen their income share roughly double from 10 percent in 1980
to 20 percent in the second decade of the 21st century. As a result of this upward redistribution,
most workers have seen little improvement in living standards from the productivity gains over
this period.
This paper argues that the bulk of this upward redistribution comes from the growth
of rents in the economy in four major areas: patent and copyright protection, the financial sector,
the pay of CEOs and other top executives, and protectionist measures that have boosted the pay
of doctors and other highly educated professionals. The argument on rents is important because,
if correct, it means that there is nothing intrinsic to capitalism that led to this rapid rise
in inequality, as for example argued by Thomas Piketty.
"...the growth of finance capitalism was what would kill capitalism off..."
"Financialization" is a short-cut terminology that in full is term either "financialization
of non-financial firms" or "financialization of the means of production." In either case it leads
to consolidation of firms, outsourcing, downsizing, and offshoring to reduce work force and wages
and increase rents.
Consolidation, the alpha and omega of financialization can only be executed with very liquid
financial markets, big investment banks to back necessary leverage to make the proffers, and an
acute capital gains tax preference relative to dividends and interest earnings, the grease to
liquidity.
It takes big finance to do "financialization" and it takes "financialization" to extract big
rents while maintaining low wages.
Finance sector as percent of US GDP, 1860-present: the growth of the rentier economy
[graph]
Financialization is a term sometimes used in discussions of financial capitalism which developed
over recent decades, in which financial leverage tended to override capital (equity) and financial
markets tended to dominate over the traditional industrial economy and agricultural economics.
Financialization is a term that describes an economic system or process that attempts to reduce
all value that is exchanged (whether tangible, intangible, future or present promises, etc.) either
into a financial instrument or a derivative of a financial instrument. The original intent of
financialization is to be able to reduce any work-product or service to an exchangeable financial
instrument... Financialization also makes economic rents possible...financial leverage tended
to override capital (equity) and financial markets tended to dominate over the traditional industrial
economy and agricultural economics...
Companies are not able to invest in new physical capital equipment or buildings because they
are obliged to use their operating revenue to pay their bankers and bondholders, as well as junk-bond
holders. This is what I mean when I say that the economy is becoming financialized. Its aim is
not to provide tangible capital formation or rising living standards, but to generate interest,
financial fees for underwriting mergers and acquisitions, and capital gains that accrue mainly
to insiders, headed by upper management and large financial institutions. The upshot is that the
traditional business cycle has been overshadowed by a secular increase in debt.
Instead of labor earning more, hourly earnings have declined in real terms. There has been
a drop in net disposable income after paying taxes and withholding "forced saving" for social
Security and medical insurance, pension-fund contributions and–most serious of all–debt service
on credit cards, bank loans, mortgage loans, student loans, auto loans, home insurance premiums,
life insurance, private medical insurance and other FIRE-sector charges. ... This diverts spending
away from goods and services.
In the United States, probably more money has been made through the appreciation of real estate
than in any other way. What are the long-term consequences if an increasing percentage of savings
and wealth, as it now seems, is used to inflate the prices of already existing assets - real estate
and stocks - instead of to create new production and innovation?
Your graph shows something I've been meaning to suggest for a while. Take a look at the last time
that the financial sector share of GDP rose. The late 1920's. Which was followed by the Great
Depression which has similar causes as our Great Recession. Here is my observation.
Give that Wall Street clowns a huge increase in our national income and we don't get more services
from them. What we get is screwed on the grandest of scales.
BTW - there is a simple causal relationship that explains both the rise in the share of financial
sector income/GDP and the massive collapses of the economy (1929 and 2007). It is called stupid
financial deregulation. First we see the megabanks and Wall Street milking the system for all
its worth and when their unhanded and often secretive risk taking falls apart - the rest of bear
the brunt of the damage.
Which is why this election is crucial. Elect a Republican and we repeat this mistake again.
Elect a real progressive and we can put in place the types of financial reforms FDR was known
for.
" and it takes "financialization" to extract big rents while maintaining low wages."
It takes governmental macro policy to maintain loose labor markets and low wages. Perhaps
the financialization of the economy and rising inequality leads to a corruption of the political
process which leads to monetary, currency and fiscal policy such that labor markets are loose
and inflation is low.
[Anne gave you FIRE sector profits as a share of GDP while this gives FIRE sector profits as a
share of total corporate profits.]
*
[Smoking gun excerpt:]
"...The financial system has grown rapidly since the early 1980s. In the 1950s, the financial
sector accounted for about 3 percent of U.S. gross domestic product. Today, that figure has more
than doubled, to 6.5 percent. The sector's yearly rate of growth doubled after 1980, rising to
a peak of 7.5 percent of GDP in 2006. As finance has grown in relative size it has also grown
disproportionately more profitable. In 1950, financial-sector profits were about 8 percent of
overall U.S. profits-meaning all the profit earned by any kind of business enterprise in the country.
By the 2000s, they ranged between 20 and 40 percent...
If you want to know what happened to economic equality in this country, one word will explain
a lot of it: financialization. That term refers to an increase in the size, scope, and power of
the financial sector-the people and firms that manage money and underwrite stocks, bonds, derivatives,
and other securities-relative to the rest of the economy.
The financialization revolution over the past thirty-five years has moved us toward greater
inequality in three distinct ways. The first involves moving a larger share of the total national
wealth into the hands of the financial sector. The second involves concentrating on activities
that are of questionable value, or even detrimental to the economy as a whole. And finally, finance
has increased inequality by convincing corporate executives and asset managers that corporations
must be judged not by the quality of their products and workforce but by one thing only: immediate
income paid to shareholders.
The financial system has grown rapidly since the early 1980s. In the 1950s, the financial sector
accounted for about 3 percent of U.S. gross domestic product. Today, that figure has more than
doubled, to 6.5 percent. The sector's yearly rate of growth doubled after 1980, rising to a peak
of 7.5 percent of GDP in 2006. As finance has grown in relative size it has also grown disproportionately
more profitable. In 1950, financial-sector profits were about 8 percent of overall U.S. profits-meaning
all the profit earned by any kind of business enterprise in the country. By the 2000s, they ranged
between 20 and 40 percent. This isn't just the decline of profits in other industries, either.
Between 1980 and 2006, while GDP increased five times, financial-sector profits increased sixteen
times over. While financial and nonfinancial profits grew at roughly the same rate before 1980,
between 1980 and 2006 nonfinancial profits grew seven times while financial profits grew sixteen
times.
This trend has continued even after the financial crisis of 2008 and subsequent financial reforms,
including the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Financial profits
in 2012 were 24 percent of total profits, while the financial sector's share of GDP was 6.8 percent.
These numbers are lower than the high points of the mid-2000s; but, compared to the years before
1980, they are remarkably high.
This explosion of finance has generated greater inequality. To begin with, the share of the
total workforce employed in the financial sector has barely budged, much less grown at a rate
equivalent to the size and profitability of the sector as a whole. That means that these swollen
profits are flowing to a small sliver of the population: those employed in finance. And financiers,
in turn, have become substantially more prominent among the top 1 percent. Recent work by the
economists Jon Bakija, Adam Cole, and Bradley T. Heim found that the percentage of those in the
top 1 percent of income working in finance nearly doubled between 1979 and 2005, from 7.7 percent
to 13.9 percent.
If the economy had become far more productive as a result of these changes, they could have
been worthwhile. But the evidence shows it did not. Economist Thomas Philippon found that financial
services themselves have become less, not more, efficient over this time period. The unit cost
of financial services, or the percentage of assets it costs to produce all financial issuances,
was relatively high at the dawn of the twentieth century, but declined to below 2 percent between
1901 and 1960. However, it has increased since the 1960s, and is back to levels seen at the early
twentieth century. Whatever finance is doing, it isn't doing it more cheaply.
In fact, the second damaging trend is that financial institutions began to concentrate more
and more on activities that are worrisome at best and destructive at worst. Harvard Business School
professors Robin Greenwood and David Scharfstein argue that between 1980 and 2007 the growth in
financial-industry revenues came from two things: asset management and loan origination. Fees
associated either with asset management or with household credit in particular were responsible
for 74 percent of the growth in financial-sector output over that period.
The asset management portion reflects the explosion of mutual funds, which increased from $134
billion in assets in 1980 to $12 trillion in 2007. Much of it also comes from "alternative investment
vehicles" like hedge funds and private equity. Over this time, the fee rate for mutual funds fell,
but fees associated with alternative investment vehicles exploded. This is, in essence, money
for nothing-there is little evidence that hedge funds actually perform better than the market
over time. And, unlike mutual funds, alternative investment funds do not fully disclose their
practices and fees publicly.
Beginning in 1980 and continuing today, banks generate less and less of their income from interest
on loans. Instead, they rely on fees, from either consumers or borrowers. Fees associated with
household credit grew from 1.1 percent of GDP in 1980 to 3.4 percent in 2007. As part of the unregulated
shadow banking sector that took over the financial sector, banks are less and less in the business
of holding loans and more and more concerned with packaging them and selling them off. Instead
of holding loans on their books, banks originate loans to sell off and distribute into this new
type of banking sector.
Again, if this "originate-to-distribute" model created value for society, it could be a worthwhile
practice. But, in fact, this model introduced huge opportunities for fraud throughout the lending
process. Loans-such as "securitized mortgages" made up of pledges of the income stream from subprime
mortgage loans-were passed along a chain of buyers until someone far away held the ultimate risk.
Bankers who originated the mortgages received significant commissions, with virtually no accountability
or oversight. The incentive, in fact, was perverse: find the worst loans with the biggest fees
instead of properly screening for whether the loans would be any good for investors.
The same model made it difficult, if not impossible, to renegotiate bad mortgages when the
system collapsed. Those tasked with tackling bad mortgages on behalf of investors had their own
conflicts of interests, and found themselves profiting while loans struggled. This process created
bad debts that could never be paid, and blocked attempts to try and rework them after the fact.
The resulting pool of bad debt has been a drag on the economy ever since, giving us the fall in
median wages of the Great Recession and the sluggish recovery we still live with.
And of course it's been an epic disaster for the borrowers themselves. Many of them, we now
know, were moderate- and lower-income families who were in no financial position to borrow as
much as they did, especially under such predatory terms and with such high fees. Collapsing home
prices and the inability to renegotiate their underwater mortgages stripped these folks of whatever
savings they had and left them in deep debt, widening even further the gulf of inequality in this
country.
Moreover, financialization isn't just confined to the financial sector itself. It's also ultimately
about who controls, guides, and benefits from our economy as a whole. And here's the last big
change: the "shareholder revolution," started in the 1980s and continuing to this very day, has
fundamentally transformed the way our economy functions in favor of wealth owners.
To understand this change, compare two eras at General Electric. This is how business professor
Gerald Davis describes the perspective of Owen Young, who was CEO of GE almost straight through
from 1922 to 1945: "[S]tockholders are confined to a maximum return equivalent to a risk premium.
The remaining profit stays in the enterprise, is paid out in higher wages, or is passed on to
the customer." Davis contrasts that ethos with that of Jack Welch, CEO from 1981 to 2001; Welch,
Davis says, believed in "the shareholder as king-the residual claimant, entitled to the [whole]
pot of earnings."
This change had dramatic consequences. Economist J. W. Mason found that, before the 1980s,
firms tended to borrow funds in order to fuel investment. Since 1980, that link has been broken.
Now when firms borrow, they tend to use the money to fund dividends or buy back stocks. Indeed,
even during the height of the housing boom, Mason notes, "corporations were paying out more than
100 percent of their cash flow to shareholders."
This lack of investment is obviously holding back our recovery. Productive investment remains
low, and even extraordinary action by the Federal Reserve to make investments more profitable
by keeping interest rates low has not been able to counteract the general corporate presumption
that this money should go to shareholders. There is thus less innovation, less risk taking, and
ultimately less growth. One of the reasons this revolution was engineered in the 1980s was to
put a check on what kinds of investments CEOs could make, and one of those investments was wage
growth. Finance has now won the battle against wage earners: corporations today are reluctant
to raise wages even as the economy slowly starts to recover. This keeps the economy perpetually
sluggish by retarding consumer demand, while also increasing inequality.
How can these changes be challenged? The first thing we must understand is the scope of the
change. As Mason writes, the changes have been intellectual, legal, and institutional. At the
intellectual level, academic research and conventional wisdom among economists and policymakers
coalesced around the ideas that maximizing returns to shareholders is the only goal of a corporation,
and that the financial markets were always right. At the legal level, laws regulating finance
at the state level were overturned by the Supreme Court or preempted by federal regulators, and
antitrust regulations were gutted by the Reagan administration and not taken up again.
At the institutional level, deregulation over several administrations led to a massive concentration
of the financial sector into fewer, richer firms. As financial expertise became more prestigious
than industry-specific knowledge, CEOs no longer came from within the firms they represented but
instead from other firms or from Wall Street; their pay was aligned through stock options, which
naturally turned their focus toward maximizing stock prices. The intellectual and institutional
transformation was part of an overwhelming ideological change: the health and strength of the
economy became identified solely with the profitability of the financial markets.
This was a bold revolution, and any program that seeks to change it has to be just as bold
intellectually. Such a program will also require legal and institutional changes, ones that go
beyond making sure that financial firms can fail without destroying the economy. Dodd-Frank can
be thought of as a reaction against the worst excesses of the financial sector at the height of
the housing bubble, and as a line of defense against future financial panics. Many parts of it
are doing yeoman's work in curtailing the financial sector's abuses, especially in terms of protecting
consumers from fraud and bringing some transparency to the Wild West of the derivatives markets.
But the scope of the law is too limited to roll back these larger changes.
One provision of Dodd-Frank, however, suggests a way forward. At the urging of the AFL-CIO,
Dodd-Frank empowered the Securities and Exchange Commission to examine the activities of private
equity firms on behalf of their investors. At around $3.5 trillion, private equity is a massive
market with serious consequences for the economy as a whole. On its first pass, the SEC found
extensive abuses. Andrew Bowden, the director of the SEC's examinations office, stated that the
agency found "what we believe are violations of law or material weaknesses in controls over 50
percent of the time."
Lawmakers could require private equity and hedge funds to standardize their disclosures of
fees and holdings, as is currently the case for mutual funds. The decline in fees for mutual funds
noted above didn't just happen by itself; it happened because the law structured the market for
actual transparency and price competition. This will need to happen again for the broader financial
sector.
But the most important change will be intellectual: we must come to understand our economy
not as simply a vehicle for capital owners, but rather as the creation of all of us, a common
endeavor that creates space for innovation, risk taking, and a stronger workforce. This change
will be difficult, as we will have to alter how we approach the economy as a whole. Our wealth
and companies can't just be strip-mined for a small sliver of capital holders; we'll need to bring
the corporation back to the public realm. But without it, we will remain trapped inside an economy
that only works for a select few.
[Whew!]
Puerto Barato said in reply to RC AKA Darryl, Ron,
"3 percent of U.S. gross domestic product. Today, that figure has more than doubled, to 6.5"
~~RC AKA Darryl, Ron ~
Growth of the non-financial-sector == growth in productivity
Growth of the financial-sector == growth in upward transfer of wealth
Ostensibly financial-sector is there to protect your money from being eaten up by inflation.
Closer inspection shows that the prevention of *eaten up* is by the method of rent collection.
Accountants handle this analysis poorly, but you can see what is happening. Boiling it down
to the bottom line you can easily see that wiping out the financial sector is the remedy to the
Piketty.
Hell! Financial sector wiped itself out in 008. Problem was that the GSE and administration
brought the zombie back to life then put the vampire back at our throats. What was the precipitating
factor that snagged the financial sector without warning?
Unexpected
deflation
!
Gimme some
of that
pgl said in reply to djb...
People like Brad DeLong have noted this for a while. Twice as many people making twice as much
money per person. And their true value to us - not a bit more than it was back in the 1940's.
Piketty looks at centuries of data from all over the world and concludes that capitalism has
a long-run bias towards income concentration. Baker looks at 35 years of data in one country and
concludes that Piketty is wrong. Um...?
A little more generously, what Baker actually writes is:
"The argument on rents is important because, if correct, it means that there is nothing intrinsic
to capitalism that led to **this** rapid rise in inequality, as for example argued by Thomas Piketty."
(emphasis added)
But Piketty has always been very explicit that the recent rise in US income inequality is anomalous
-- driven primarily by rising inequality in the distribution of labor income, and only secondarily
by any shift from labor to capital income.
So perhaps Baker is "correctly" refuting Straw Thomas Piketty. Which I suppose is better than
just being obviously wrong. Maybe.
tew said...
Some simple math shows that this assertion is false "As a result of this upward redistribution,
most workers have seen little improvement in living standards" unless you think an apprx. 60%
in per-capita real income (expressed as GDP) among the 99% is "little improvement".
Real GDP 2015 / Real GDP 1980 = 2.57 (Source: FRED)
If the income share of the 1% shifted from 10% to 20% then The 1%' real GDP component went up
410% while that of The 99% went up 130%. Accounting for a population increase of about 41% brings
those numbers to a 265% increase and a 62% increase.
Certainly a very unequal distribution of the productivity gains but hard to call "little".
I believe the truth of the statement is revealed when you look at the Top 5% vs. the other
95%.
cm said in reply to tew...
For most "working people", their raises are quickly eaten up by increases in housing/rental,
food, local services, and other nondiscretionary costs. Sure, you can buy more and better imported
consumer electronics per dollar, but you have to pay the rent/mortgage every months, how often
do you buy a new flat screen TV? In a high-cost metro, a big ass TV will easily cost less than
a single monthly rent (and probably less than your annual cable bill that you need to actually
watch TV).
pgl said in reply to tew...
Are you trying to be the champion of the 1%? Sorry dude but Greg Mankiw beat you to this.
anne said...
In the years since 1980, there has been a well-documented upward redistribution of income.
While there are some differences by methodology and the precise years chosen, the top one percent
of households have seen their income share roughly double from 10 percent in 1980 to 20 percent
in the second decade of the 21st century. As a result of this upward redistribution, most workers
have seen little improvement in living standards from the productivity gains over this period....
Between 1948 and 1980, real median family income increased by 110.2%, while between 1980 and 2014
real median family income increased by a mere 15.8%.
cm said...
"protectionist measures that have boosted the pay of doctors and other highly educated
professionals"
Protectionist measures (largely of the variety that foreign credentials are not recognized)
apply to doctors and similar accredited occupations considered to be of some importance, but certainly
much less so to "highly educated professionals" in tech, where the protectionism is limited to
annual quotas for some categories of new workers imported into the country and requiring companies
to pay above a certain wage rate for work visa holders in jobs claimed to have high skills requirements.
A little mentioned but significant factor for growing wages in "highly skilled" jobs is that
the level of foundational and generic domain skills is a necessity, but is not all the value the
individual brings to the company. In complex subject matters, even the most competent person
joining a company has to become familiar with the details of the products, the industry niche,
the processes and professional/personal relationships in the company or industry, etc. All these
are not really teachable and require between months and years in the job. This represents a significant
sunk cost. Sometimes (actually rather often) experience within the niche/industry is in a degree
portable between companies, but some company still had to employ enough people to build this experience,
and it cannot be readily bought by bringing in however competent freshers.
This applies less so e.g. in medicine. There are of course many heavily specialized disciplines,
but a top flight brain or internal organ surgeon can essentially work on any person. The variation
in the subject matter is large and complex, but much more static than in technology.
That's not to knock down the skill of medical staff in any way (or anybody else who does a
job that is not trivial, and that's true for many jobs). But specialization vs. genericity follow
a different pattern than in tech.
Another example, the legal profession. There are similar principles that carry across, with
a lot of the specialization happening along different legislation, case law, etc., specific to
the jurisdiction and/or domain being litigated.
Oil is a valuable chemical resource that is now wasted because of low prices... "The obvious follow-up
question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion
to continue? An exercise for readers."
Notable quotes:
"... Iran wont flood the market in 2016. Right now Iran is losing production. It takes time to reverse decline and make a difference. ..."
"... Those who predict very low prices dont understand the industry (I do). The low price environment reduces capital investment, which has to be there just to keep production flat (the decline is 3 to 5 million barrels of oil per day per year). At this time capacity is dropping everywhere except for a few select countries. The USA is losing capacity, and will never again reach this years peak unless prices double. Other countries are hopeless. From Norway to Indonesia to Colombia to Nigeria and Azerbaijan, peak oil has already taken place. ..."
"... If oil prices remain very low until 2025 itll either be because you are right or because the world went to hell. ..."
"... But Im with Carambaman - prices will go up again. Demand is and will still be there. The excess output will eventually end, and the prices stabilises. And then move up again. ..."
"... Time to examine the real question: how long can the Saudis maintain their current production rates? Theyre currently producing more than 10 Mbarrels/day, but lets take the latter figure as a lower bound. They apparently have (per US consulate via WikiLeaks--time for a followup?) at least 260 Gbarrels (though it seems no one outside Saudi really knows). You do the math: 260 Gbarrels / (10 Mbarrels/day) = 26 kdays ~= 70 years. @ 15 Mbarrels/day - 47.5 years. @ 20 Mbarrels/day - 35 years. ..."
"... The obvious follow-up question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion to continue? An exercise for readers. ..."
"... Saudi Arabia, a US ally, using oil production and pricing to crush US oil shale industry? Did I read that correctly? ..."
"... Yeah, but I suspect it was *written* incorrectly. Im betting the Saudis real target is the Russians. ..."
"... In 1975 dollars, thats $8.31 / bbl (with a cumulative inflation factor of 342% over 40 years), or $.45 / gal for gas (assuming a current price of $2.00 / gal). ..."
"... I spent 30 years in the oil industry and experienced many cycles. When it is up people cannot believe it will go down and when it is down people cannot believe it will go up. It is all a matter of time ..."
Iran won't flood the market in 2016. Right now Iran is losing production. It takes time
to reverse decline and make a difference.
Those who predict very low prices don't understand the industry (I do). The low price environment
reduces capital investment, which has to be there just to keep production flat (the decline is
3 to 5 million barrels of oil per day per year). At this time capacity is dropping everywhere
except for a few select countries. The USA is losing capacity, and will never again reach this
year's peak unless prices double. Other countries are hopeless. From Norway to Indonesia to Colombia
to Nigeria and Azerbaijan, peak oil has already taken place.
Fernando Leza -> SonOfFredTheBadman 15 Dec 2015 06:05
If oil prices remain very low until 2025 it'll either be because you are right or because
the world went to hell. I prefer your vision, of course. But I'm afraid most of your talk
is wishful thinking. Those of us who do know how to put watts on the table can't figure out any
viable solutions. Hopefully something like cheap fusion power will rise. Otherwise you may be
eating human flesh in 2060.
Fernando Leza -> p26677 15 Dec 2015 06:00
Keep assuming. I'll keep buying Shell stock.
MatCendana -> UnevenSurface 14 Dec 2015 03:36
Regardless of the breakeven price, producers with the wells already running or about to will
keep pumping. Better to have some income, even if the operation is at a loss, than no income.
This will go on and on right until the end, which is either prices eventually go up or they run
out of oil and can't drill new wells.
But I'm with Carambaman - prices will go up again. Demand is and will still be there. The
excess output will eventually end, and the prices stabilises. And then move up again.
Billy Carnes 13 Dec 2015 19:52
Also this hurts the states...Louisiana is now in the hole over 1.5 Billion or more
TomRoche 13 Dec 2015 12:31
@Guardian: Time to examine the real question: how long can the Saudis maintain their current
production rates? They're currently producing more than 10 Mbarrels/day, but let's take the latter
figure as a lower bound. They apparently have (per US consulate via WikiLeaks--time for a followup?)
at least 260 Gbarrels (though it seems no one outside Saudi really knows). You do the math: 260
Gbarrels / (10 Mbarrels/day) = 26 kdays ~= 70 years. @ 15 Mbarrels/day -> 47.5 years. @ 20 Mbarrels/day
-> 35 years.
That's just Saudi (allegedly) proven reserves. But it's plenty long enough to push atmospheric
GHG levels, and associated radiative forcing, to ridiculously destructive excess.
The obvious follow-up question is, how long will the sane people of the world continue
to allow so much fossil-fuel combustion to continue? An exercise for readers.
TomRoche -> GueroElEnfermero 13 Dec 2015 12:14
@GueroElEnfermero: 'Saudi Arabia, a US ally, using oil production and pricing to crush
US oil shale industry? Did I read that correctly?'
Yeah, but I suspect it was *written* incorrectly. I'm betting the Saudis' real target is
the Russians.
Sieggy 13 Dec 2015 11:49
In 1975 dollars, that's $8.31 / bbl (with a cumulative inflation factor of 342% over 40
years), or $.45 / gal for gas (assuming a current price of $2.00 / gal).
Carambaman 13 Dec 2015 10:25
I spent 30 years in the oil industry and experienced many cycles. When it is up people
cannot believe it will go down and when it is down people cannot believe it will go up. It is
all a matter of time
"... It was German Chancellor Angela Merkel, not Vladimir Putin, who pushed the EU agreement and miscalculated the consequences, as the German newsmagazine Der Spiegel has reported . Putin's only role in that time frame was to offer a more generous $15 billion aid package to Ukraine, not exactly a war-like act. ..."
The actually "incontrovertible" facts about the Ukraine crisis are these: The destabilization
of President Viktor Yanukovych's elected government began in November 2013 when Yanukovych balked
at a proposed association agreement promoted by the European Union. He sought more time after the
sticker shock of learning from Kiev economic experts that the deal would cost Ukraine $160 billion
in lost revenue by cutting trade with Russia.
It was German Chancellor Angela Merkel, not Vladimir Putin, who pushed the EU agreement and miscalculated
the consequences, as the German newsmagazine Der Spiegel
has reported. Putin's only role in that time frame was to offer a more generous $15 billion aid
package to Ukraine, not exactly a war-like act.
Yanukovych's decision to postpone action on the EU association prompted angry demonstrations in
Kiev's Maidan square, largely from western Ukrainians who were hoping for visa-free travel to the
EU and other benefits from closer ties. Putin had no role in those protests – and it's insane to
think that he did.
In February 2014, the protests grew more and more violent as neo-Nazi and other militias organized
in the western city of Lviv and these 100-man units known as "sotins" were dispatched daily to
provide the muscle for the anti-Yanukovych
uprising that was taking shape. It is frankly nutty to suggest that Putin was organizing these militias.
[See Consortiumnews.com's "When
Is a Putsch a Putsch."]
Evidence of Coup Plotting
By contrast, there is substantial evidence that senior U.S. officials were pushing for a "regime
change" in Kiev, including
an intercepted phone call
and various public statements.
In December 2013, Assistant Secretary of State Victoria Nuland, a neocon holdover, reminded Ukrainian
business leaders that the United States had invested $5 billion in their "European aspirations."
In early February, she discussed with U.S. Ambassador Geoffrey Pyatt who the new leaders of Ukraine
should be. "Yats is the guy," she declared, referring to Arseniy Yatsenyuk. [See Consortiumnews.com's
"Who's
Telling the Big Lie on Ukraine?"]
The Maidan uprising gained momentum on Feb. 20, 2014, when snipers around the square opened fire
on police and protesters touching off a violent clash that left scores of people dead, both police
and protesters. After the sniper fire and a police retreat - carrying their wounded - the demonstrators
surged forward and some police apparently reacted with return fire of their own.
But the growing evidence indicates that the initial sniper fire originated from locations controlled
by the Right Sektor, extremists associated with the Maidan's neo-Nazi "self-defense" commandant Andriy
Parubiy. Though the current Ukrainian government has dragged its feet on an investigation, independent
field reports, including a
new one from BBC, indicate that the snipers were associated with the protesters, not the Yanukovych
government as was widely reported in the U.S. media a year ago.
The worsening violence led Yanukovych to agree on Feb. 21 to a deal guaranteed by three European
countries. He accepted reduced powers and agreed to early elections so he could be voted out of office.
Yet, rather than permit that political settlement to go forward, neo-Nazis and other Maidan forces
overran government buildings on Feb. 22, forcing Yanukovych and his officials to flee for their lives.
The U.S. State Department quickly deemed this coup regime "legitimate" and Nuland's choice, Yatsenyuk,
emerged as Prime Minister, with Parubiy put in charge of national security.
In other words, there is plenty of evidence that the Ukraine crisis was started by the EU through
its mishandling of the association agreement, then was heated up by the U.S. government through the
work of Nuland, Pyatt and other officials, and then was brought to a boil by neo-Nazis and other
extremists who executed the coup.
Is Angela Merkel getting bad advice from Washington neocons through their representative in Berlin?
Now we read that
Jeff Gedmin - the head of the Aspen
Institute in Berlin - is meeting on a regular basis with the Chancellor to instruct her on the Bush
administration's line:
Angela Merkel relies on the advice of Jeffrey Gedmin, specially dispatched
to Berlin to assist her by the Bush clan. This lobbyist first worked at the American Enterprise
Institute (AEI) [2]
under Richard Perle and Mrs. Dick Cheney. He enthusiastically encouraged the creation of a Euro
with Dollar parity exchange rate. Within the AEI, he led the New Atlantic Initiative (NAI), which
brought together all the America-friendly generals and politicians in Europe. He was then involved
in the Project for a New American Century (PNAC) and wrote the chapter on Europe in the neocon
programme. He argued that the European Union should remain under NATO authority and that this
would only be possible by "discouraging European calls for emancipation." [3]
Finally he became the administrator of the Council of the Community of Democracies (CCD), which
argues in favour of a two-speed UN, and became director of the Aspen Institute in Berlin [4].
Subsequently he turned down the offer from his friend John Bolton [5]
of the post of deputy US ambassador to the UN so as to be able to devote himself exclusively to
Angela Merkel.
Elsewhere we
read that Chancellor Merkel receives daily briefings from the neocon stalwart Gedmin:
Gedmin "brieft" die Kanzlerin täglich: Er hat damit die Rolle inne, die bei
der Stasi die Führungsoffiziere hatten. Wenn wir uns noch Demokratie nennen wollen, dann muss
Merkel gezwungen werden, die Inhalte dieser täglichen "Briefings" dem Land offenzulegen. In anderen
Ländern gibt es dafür Gesetze, die "Freedom of Information Act" heissen.
Could this be true? I hope not. Gedmin is known for his columns in the conservative daily
Die Welt where he reports on the marvelous successes the Iraq War. And who can forget
Gedmin's
column during last summer' s Israel/Lebanon War where he wrote about how Hezbollah fighters drank
the blood of their victims in Lebanon? If Angela Merkel is looking for good advice, there are
much
more honest and intelligent resources than Jeff Gedmin.
Note that the quality of translation from German of this article is low.
Notable quotes:
"... Frankfurter Allgemeine Zeitung ..."
"... Bild and Die Welt ..."
"... In 2003, Chancellor Gerhard Schröder opposed the Anglo-American intervention in Ira q. Angela
Merkel then published a courageous article in the Washington Post ..."
"... As Stanley Payne, the famous American historian said about Spain (or any western democracy)
that now politicians are not elected but chosen by apparatus, agencies and visible hands of the markets
..."
"... Merkel is publicly supported by Friede Springer , widow of West German press baron, Axel Springer
, whos publishing conglomerate, the Springer Group secretly received around $7 million from the CIA
in the early 1950s. ..."
"... She is counseled by Jeffrey Gedmin. Gedmin is a regular columnist in Die Welt , a publication
of the Springer Group. After becoming administrator of the Council of the Community of Democracies and
director of the Aspen Institute in Berlin in 2001, Gedmin devoted himself exclusively to Merkel . Gedmin
was too involved in the infamous Project for a New American Century (PNAC) and wrote the chapter on
Europe in the neocon programme. He argued that the European Union should remain under NATO authority
and that this would only be possible by discouraging European calls for emancipation . ..."
"... In a few years, Merkel has destroyed European solidarity, annihilated the German nuclear power
plants (an old American obsession too), impoverished Germans and their once efficient Rheinisch and
solitary economy, backed the mad dog American diplomacy and created along with an irresponsible American
administration (irresponsible because America will never win this kind of conflict) a dangerous crisis
against Russia than can end on a war or a scandalous European partition. ..."
One must understand the reasons of
Angela
Merkel's behaviour. She obeys America and
her Israeli mentor ('Israel is Germany's raison d'être'???), she threatens and mistreats Europe;
she attacks Russia and now she builds a new sanitary cordon (like in 1919) in order to deconstruct
Eurasia and
reinforce American agenda in our unlucky continent. Now Merkel advocates for the rapid adoption
on the most infamous and perilous treaty of commerce in history, the TPP (Trans-Pacific Partnership).
Dr Roberts has recently explained the meaning of 'Fast Track' expression and a courageous Guardian,
last 27th may, has exposed the corruption of American Congress on this incredible yet
terrible matter.
Why is Merkel so pro-American and anti-European?
Let us explain with the data we know the reasons of such nihilist and erratic behaviour.
Angela Merkel is not from East Germany (east-Germans
are pro-Russian indeed, see lately the declaration of generals). She was born in Hamburg in
1954 (Federal Republic of Germany). Shortly after her birth, her family made the unusual
choice of moving to the East. Her father, a pastor in the Lutheran church, founded a
seminary in the German Democratic Republic and became director of a home for handicapped persons.
He enjoyed a privileged social status, making frequent trips to the West.
She became politically involved in the Freie Deutsche Jugend (Free German Youth), the state
organisation for young people. She rose within the organisation to the post of Secretary of the
Agitprop department, becoming one of the main experts in political communication in the communist
system. She enjoys selling her convictions.
In November 1989 The CIA attempted to take over by recruiting senior individuals. One month
later, Merkel changed sides and joined the Demokratischer Aufbruch (Democratic Revival), a movement
inspired by the West German Christian Democrat party. As we know from history, these political
parties in Europe are neither Christian nor democratic. They just serve American and business
agendas. In order to avoid a mass exodus from the East to the West, Merkel argued strongly in
favour of getting the GDR to join the market economy and the Deutschmark zone. Ultraliberal but
never popular in Germany, her thesis finally imposed itself in Germany, like that of Sarkozy,
her fellow neocon in France who definitely ousted any rest of Gaullism in this country.
Her second husband, Joachim Sauer, was recruited by the US Company Biosym Technology, spending
a year at San Diego at the laboratory of this Pentagon contractor. He then joined Accelrys, another
San Diego company carrying out contracts for the Pentagon. Of course Accelrys is traded on NASDAQ...
Helmut Kohl and his closest associates had apparently accepted money from obscure sources
for the CDU. Angela Merkel then published a heroic-comical article in the Foreign Frankfurter
Allgemeine Zeitung in which she distanced herself from her mentor. One can check that she
repeatedly betrays her protectors... and electors (whose median age is of sixty).
Angela Merkel was then publicly supported by two press groups. Firstly, she was able to count
on the support of Friede Springer, who had inherited the Axel Springer group (180 newspapers and
magazines, including Bild and Die Welt). The group's journalists are required to sign an
editorial agreement which lies down that they must work towards developing transatlantic links and
defending the state of Israel. The other group is Bertelsmann.
Angela Merkel radically rejects European independence
In 2003,
Chancellor Gerhard Schröder opposed the Anglo-American intervention in Iraq. Angela
Merkel then published a 'courageous' article in the Washington Post in which she rejected
the Chirac-Schröder doctrine of European independence, affirmed her gratitude and friendship for
"America" and supported this scandalous and ridiculous war. I quote some lines of this interesting
act of submission to her American lords:
Because of decisive events,
Europe and the United States now must redefine the nucleus of their domestic, foreign and
security policy principles.
Aid to Turkey, our partner in the alliance, is blocked for days in the NATO Council by France,
Belgium and Germany, a situation that undermines the very basis of NATO's legitimacy.
The Eastern European candidate countries for membership in the European Union were attacked
by the French government because they have declared their commitment to the transatlantic partnership
between Europe and the United States. She then threatens France, then a free country run
by Chirac and Villepin, and advocates for what Gore Vidal quoted 'the perpetual war'...
involving a 'perpetual peace':
Anyone who rejects military action as a last resort weakens the pressure that needs to be maintained
on dictators and consequently makes a war not less but more likely.
Germany needs its friendship with France, but the benefits of that friendship can be
realized only in close association with our old and new European partners, and within
the transatlantic alliance with the United States.
Yet Merkel won the elections in 2007. She announced the abolition of graduated income tax, proposing
that the rate should be the same for those who only just have what is necessary and those who live
in luxury: maybe this is the a result of her Christian education?
The outgoing Chancellor, Gerhard Schröder, severely criticized this proposal in a televised debate.
The CDU's lead was decimated, and in the actual election, the CDU polled 35% of the votes and the
SPD 34%, the remainder being spread amongst a number of small parties. The Germans didn't want Schröder
any longer, but nor did they want Merkel. I repeat that she was imposed more than elected. As
Stanley Payne, the famous American historian said about Spain (or any western democracy) that now
politicians are 'not elected but chosen' by apparatus, agencies and 'visible hands' of the markets
These last weeks, "Mother" Merkel tries to re-launch the proposed merger of the North American
Free Trade Area and the European Free Trade Area, thereby creating a "great transatlantic market"
to use the words once pronounced by Sir Leon Brittan, a famous paedophile involved in scandals and
bribes since, and mysteriously found dead a couple of months ago.
Let us se now some of their connections:
Merkel is publicly supported by
Friede Springer, widow of West German press baron,
Axel Springer, who's publishing conglomerate, the
Springer Group secretly received around $7 million from the
CIA in the early 1950's.
She is counseled by Jeffrey Gedmin. Gedmin is a regular columnist in
Die Welt, a publication of the Springer Group. After becoming administrator of the
Council of the Community of Democracies and director of the
Aspen Institute in Berlin in 2001, Gedmin devoted himself exclusively to
Merkel. Gedmin was
too involved in the infamous Project for a New American Century (PNAC) and wrote the chapter on
Europe in the neocon programme. He argued that the European Union should remain under NATO authority
and that this would only be possible by "discouraging European calls for emancipation".
We have never been so far from 'emancipation' now in Europe, and never been so
near to a war with Russia and maybe (in order to satisfy American gruesome appetite) with Central
Asia and China. In France, 61% of the people who had witnessed the war asserted in 1945 that we were
saved by the Russian Army. Now, thanks to American propaganda backed by European collaborators, we
are hardly 10% to know that fact. The rest is misled by propaganda, media, TV and films. Daniel Estulin
speaks of a remade, of a re-fabricated past by US television and media agencies.
In a few years, Merkel has destroyed European solidarity, annihilated the German nuclear power
plants (an old American obsession too), impoverished Germans and their once efficient Rheinisch and
solitary economy, backed the 'mad dog' American diplomacy and created along with an irresponsible
American administration (irresponsible because America will never win this kind of conflict) a dangerous
crisis against Russia than can end on a war or a scandalous European partition.
"... Can you list all of the pro- or anti- Wall Street reforms and actions Bill Clinton performed as President including nominating Alan Greenspan as head regulator? Cutting the capital gains tax? Are you aware of Greenspans record? ..."
"... Its actually pro-neoliberalism crowd vs anti-neoliberalism crowd. In no way anti-neoliberalism commenters here view this is a character melodrama, although psychologically Hillary probably does has certain problems as her reaction to the death of Gadhafi attests. The key problem with anti-neoliberalism crowd is the question What is a realistic alternative? Thats where differences and policy debate starts. ..."
"... Events do not occur in isolation. GLBA increased TBTF in AIG and Citi. TBTF forced TARP. GLBA greased the skids for CFMA. Democrats gained majority, but not filibuster proof, caught between Iraq and a hard place following their votes for TARP and a broader understanding of their participation in the unanimous consent passage of the CFMA, over objection by Senators James Inhofe (R-OK) and Paul Wellstone (D-MN). ..."
"... It certainly fits the kind of herd mentality that I always saw in corporate Amerika until I retired. The William Greider article posted by RGC was very consistent in its account by John Reed with the details of one or two books written about AIG back in 2009 or so. I dont have time to hunt them up now. Besides, no one would read them anyway. ..."
"... GS was one of several actions taken by the New Deal. That it wasnt sufficient by itself doesnt equate to it wasnt beneficial. ..."
"... "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," said then-Treasury Secretary Lawrence Summers. "This historic legislation will better enable American companies to compete in the new economy." ..."
"... The repeal of Glass Steagal was a landmark victory in deregulation that greased the skids for the passage of CFMA once Democrats had been further demoralized by the SCOTUS decision on Bush-v-Gore. The first vote on GLBA was split along party lines, but passed because Republicans had majority and Clinton was willing to sign which was clear from the waiver that had been granted to illegal Citi merger with Travelers. Both Citi and AIG mergers contributed to too big to fail. The CFMA was the nail in the coffin that probably would have never gotten off the ground if Democrats had held the line on the GLBA. Glass-Steagal was insufficient as a regulatory system to prevent the 2008 mortgage crisis, but it was giant as an icon of New Deal financial system reform. Its loss institutionalized too big to fail ..."
"... Gramm Leach Biley was a mistake. But it was not the only failure of US regulatory policies towards financial institutions nor the most important. ..."
"... It was more symbolic caving in on financial regulation than a specific technical failure except for making too big to fail worse at Citi and AIG. It marked a sea change of thinking about financial regulation. Nothing mattered any more, including the CFMA just a little over one year later. Deregulation of derivatives trading mandated by the CFMA was a colossal failure and it is not bizarre to believe that GLBA precipitated the consensus on financial deregulation enough that after the demoralizing defeat of Democrats in Bush-v-Gore then there was no New Deal spirit of financial regulation left. Social development is not just a series of unconnected events. It is carried on a tide of change. A falling tide grounds all boats. ..."
"... We had a financial dereg craze back in the late 1970s and early 1980s which led to the S L disaster. One would have thought we would have learned from that. But then came the dereg craziness 20 years later. And this disaster was much worse. ..."
"... This brings us to Lawrence Summers, the former Treasury Secretary of the United States and at the time right hand man to then Treasury Security Robert Rubin. Mr. Summers was widely credited with implementation of the aggressive tactics used to remove Ms. Born from her office, tactics that multiple sources describe as showing an old world bias against women piercing the glass ceiling. ..."
"... According to numerous published reports, Mr. Summers was involved in. silencing those who questioned the opaque derivative product's design. ..."
"... The Tax Policy Center estimated that a 0.1 percent tax on stock trades, scaled with lower taxes on other assets, would raise $50 billion a year in tax revenue. The implied reduction in trading revenue was even larger. Senator Sanders has proposed a tax of 0.5 percent on equities (also with a scaled tax on other assets). This would lead to an even larger reduction in revenue for the financial industry. ..."
"... Great to see Bakers acknowledgement that an updated Glass-Steagall is just one component of the progressive wings plan to rein in Wall Street, not the sum total of it. Besides, if Wall Street types dont think restoring Glass-Steagall will have any meaningful effects, why do they expend so much energy to disparage it? Methinks they doth protest too much. ..."
"... Yes thats a good way to look it. Wall Street gave the Democrats and Clinton a lot of campaign cash so that they would dismantle Glass-Steagall. ..."
"... Slippery slope. Ya gotta find me a business of any type that does not protest any kind of regulation on their business. ..."
"... Yeah, but usually because of all the bad things they say will happen because of the regulation. The question is, what do they think of Clintons plan? Ive heard surprisingly little about that, and what I have heard is along these lines: http://money.cnn.com/2015/10/08/investing/hillary-clinton-wall-street-plan/ ..."
"... Hillary Clinton unveiled her big plan to curb the worst of Wall Streets excesses on Thursday. The reaction from the banking community was a shrug, if not relief. ..."
"... Iceland's government is considering a revolutionary monetary proposal – removing the power of commercial banks to create money and handing it to the central bank. The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled "A better monetary system for Iceland". ..."
Hillary Clinton Is Whitewashing the Financial Catastrophe
She has a plan that she claims will reform Wall Street-but she's deflecting responsibility
from old friends and donors in the industry.
By William Greider
Yesterday 3:11 pm
Hillary Clinton's recent op-ed in The New York Times, "How I'd Rein In Wall Street," was intended
to reassure nervous Democrats who fear she is still in thrall to those mega-bankers of New York
who crashed the American economy. Clinton's brisk recital of plausible reform ideas might convince
wishful thinkers who are not familiar with the complexities of banking. But informed skeptics,
myself included, see a disturbing message in her argument that ought to alarm innocent supporters.
Candidate Clinton is essentially whitewashing the financial catastrophe. She has produced a
clumsy rewrite of what caused the 2008 collapse, one that conveniently leaves her husband out
of the story. He was the president who legislated the predicate for Wall Street's meltdown. Hillary
Clinton's redefinition of the reform problem deflects the blame from Wall Street's most powerful
institutions, like JPMorgan Chase and Goldman Sachs, and instead fingers less celebrated players
that failed. In roundabout fashion, Hillary Clinton sounds like she is assuring old friends and
donors in the financial sector that, if she becomes president, she will not come after them.
The seminal event that sowed financial disaster was the repeal of the New Deal's Glass-Steagall
Act of 1933, which had separated banking into different realms: investment banks, which organize
capital investors for risk-taking ventures; and deposit-holding banks, which serve people as borrowers
and lenders. That law's repeal, a great victory for Wall Street, was delivered by Bill Clinton
in 1999, assisted by the Federal Reserve and the financial sector's armies of lobbyists. The "universal
banking model" was saluted as a modernizing reform that liberated traditional banks to participate
directly and indirectly in long-prohibited and vastly more profitable risk-taking.
Exotic financial instruments like derivatives and credit-default swaps flourished, enabling
old-line bankers to share in the fun and profit on an awesome scale. The banks invented "guarantees"
against loss and sold them to both companies and market players. The fast-expanding financial
sector claimed a larger and larger share of the economy (and still does) at the expense of the
real economy of producers and consumers. The interconnectedness across market sectors created
the illusion of safety. When illusions failed, these connected guarantees became the dragnet that
drove panic in every direction. Ultimately, the federal government had to rescue everyone, foreign
and domestic, to stop the bleeding.
Yet Hillary Clinton asserts in her Times op-ed that repeal of Glass-Steagall had nothing to
do with it. She claims that Glass-Steagall would not have limited the reckless behavior of institutions
like Lehman Brothers or insurance giant AIG, which were not traditional banks. Her argument amounts
to facile evasion that ignores the interconnected exposures. The Federal Reserve spent $180 billion
bailing out AIG so AIG could pay back Goldman Sachs and other banks. If the Fed hadn't acted and
had allowed AIG to fail, the banks would have gone down too.
These sound like esoteric questions of bank regulation (and they are), but the consequences
of pretending they do not matter are enormous. The federal government and Federal Reserve would
remain on the hook for rescuing losers in a future crisis. The largest and most adventurous banks
would remain free to experiment, inventing fictitious guarantees and selling them to eager suckers.
If things go wrong, Uncle Sam cleans up the mess.
Senator Elizabeth Warren and other reformers are pushing a simpler remedy-restore the Glass-Steagall
principles and give citizens a safe, government-insured place to store their money. "Banking should
be boring," Warren explains (her co-sponsor is GOP Senator John McCain).
That's a hard sell in politics, given the banking sector's bear hug of Congress and the White
House, its callous manipulation of both political parties. Of course, it is more complicated than
that. But recreating a safe, stable banking system-a place where ordinary people can keep their
money-ought to be the first benchmark for Democrats who claim to be reformers.
Actually, the most compelling witnesses for Senator Warren's argument are the two bankers who
introduced this adventure in "universal banking" back in the 1990s. They used their political
savvy and relentless muscle to seduce Bill Clinton and his so-called New Democrats. John Reed
was CEO of Citicorp and led the charge. He has since apologized to the nation. Sandy Weill was
chairman of the board and a brilliant financier who envisioned the possibilities of a single,
all-purpose financial house, freed of government's narrow-minded regulations. They won politically,
but at staggering cost to the country.
Weill confessed error back in 2012: "What we should probably do is go and split up investment
banking from banking. Have banks do something that's not going to risk the taxpayer dollars, that's
not going to be too big to fail."
John Reed's confession explained explicitly why their modernizing crusade failed for two fundamental
business reasons. "One was the belief that combining all types of finance into one institution
would drive costs down-and the larger institution the more efficient it would be," Reed wrote
in the Financial Times in November. Reed said, "We now know that there are very few cost efficiencies
that come from the merger of functions-indeed, there may be none at all. It is possible that combining
so much in a single bank makes services more expensive than if they were instead offered by smaller,
specialised players."
The second grave error, Reed said, was trying to mix the two conflicting cultures in banking-bankers
who are pulling in opposite directions. That tension helps explain the competitive greed displayed
by the modernized banking system. This disorder speaks to the current political crisis in ways
that neither Dems nor Republicans wish to confront. It would require the politicians to critique
the bankers (often their funders) in terms of human failure.
"Mixing incompatible cultures is a problem all by itself," Reed wrote. "It makes the entire
finance industry more fragile…. As is now clear, traditional banking attracts one kind of talent,
which is entirely different from the kinds drawn towards investment banking and trading. Traditional
bankers tend to be extroverts, sociable people who are focused on longer term relationships. They
are, in many important respects, risk averse. Investment bankers and their traders are more short
termist. They are comfortable with, and many even seek out, risk and are more focused on immediate
reward."
Reed concludes, "As I have reflected about the years since 1999, I think the lessons of Glass-Steagall
and its repeal suggest that the universal banking model is inherently unstable and unworkable.
No amount of restructuring, management change or regulation is ever likely to change that."
This might sound hopelessly naive, but the Democratic Party might do better in politics if
it told more of the truth more often: what they tried do and why it failed, and what they think
they may have gotten wrong. People already know they haven't gotten a straight story from politicians.
They might be favorably impressed by a little more candor in the plain-spoken manner of John Reed.
Of course it's unfair to pick on the Dems. Republicans have been lying about their big stuff
for so long and so relentlessly that their voters are now staging a wrathful rebellion. Who knows,
maybe a little honest talk might lead to honest debate. Think about it. Do the people want to
hear the truth about our national condition? Could they stand it?
"She claims that Glass-Steagall would not have limited the reckless behavior of institutions
like Lehman Brothers or insurance giant AIG, which were not traditional banks."
Of course this claim is absolutely true. Just like GS would not have affected the other investment
banks, whatever their name was. And just like we would have had to bail out those other banks
whatever their name was.
Peter K. -> EMichael...
Can you list all of the pro- or anti- Wall Street "reforms" and actions Bill Clinton performed
as President including nominating Alan Greenspan as head regulator? Cutting the capital gains
tax? Are you aware of Greenspan's record?
Yes Hillary isn't Bill but she hasn't criticized her husband specifically about his record and
seems to want to have her cake and eat it too.
Of course Hillary is much better than the Republicans, pace Rustbucket and the Green Lantern Lefty
club. Still, critics have a point.
I won't be surprised if she doesn't do much to rein in Wall Street besides some window dressing.
sanjait -> Peter K....
"Can you list all of the pro- or anti- Wall Street "reforms" and actions Bill Clinton
performed..."
That, right there, is what's wrong with Bernie and his fans. They measure everything by whether
it is "pro- or anti- Wall Street". Glass Steagall is anti-Wall Street. A financial transactions
tax is anti-Wall Street. But neither has any hope of controlling systemic financial risk in this
country. None.
You guys want to punish Wall Street but not even bother trying to think of how to achieve useful
policy goals. Some people, like Paine here, are actually open about this vacuity, as if the only
thing that were important were winning a power struggle.
Hillary's plan is flat out better. It's more comprehensive and more effective at reining in
the financial system to limit systemic risk. Period.
You guys want to make this a character melodrama rather than a policy debate, and I fear the
result of that will be that the candidate who actually has the best plan won't get to enact it.
likbez -> sanjait...
"You guys want to make this a character melodrama rather than a policy debate, and I
fear the result of that will be that the candidate who actually has the best plan won't get
to enact it."
You are misrepresenting the positions. It's actually pro-neoliberalism crowd vs anti-neoliberalism
crowd. In no way anti-neoliberalism commenters here view this is a character melodrama, although
psychologically Hillary probably does has certain problems as her reaction to the death of Gadhafi
attests. The key problem with anti-neoliberalism crowd is the question "What is a realistic alternative?"
That's where differences and policy debate starts.
RGC -> EMichael...
"Her argument amounts to facile evasion"
Fred C. Dobbs -> RGC...
'The majority favors policies to the left of Hillary.'
... The Democrats' liberal faction has been greatly overestimated by pundits who mistake noisiness
for clout or assume that the left functions like the right. In fact, liberals hold nowhere near
the power in the Democratic Party that conservatives hold in the Republican Party. And while they
may well be gaining, they're still far from being in charge. ...
Paine -> RGC...
What's not confronted ? Suggest what a System like the pre repeal system would have done in
the 00's. My guess we'd have ended in a crisis anyway. Yes we can segregate the depository system.
But credit is elastic enough to build bubbles without the depository system involved
EMichael -> Paine ...
Exactly.
Most people think of lending like the Bailey Brothers Savings and Loan still exists.
RC AKA Darryl, Ron -> EMichael...
Don't be such a whistle dick. Just because you cannot figure out why GLBA made such an impact
that in no way means that people that do understand are stupid. See my posted comment to RGC on
GLBA just down thread for an more detailed explanation including a linked web article. No, GS
alone would not have prevented the mortgage bubble, but it would have lessened TBTF and GS stood
as icon, a symbol of financial regulation. Hell, if we don't need GS then why don't we just allow
unregulated derivatives trading? Who cares, right? Senators Byron Dorgan, Barbara Boxer, Barbara
Mikulski, Richard Shelby, Tom Harkin, Richard Bryan, Russ Feingold and Bernie Sanders all voted
against GLBA to repeal GS for some strange reason and Dorgan made a really big deal out of it
at the time. I doubt everyone on that list of Senators was just stupid because they did not see
it your way.
RC AKA Darryl, Ron -> EMichael...
I ran all out of ceteris paribus quite some time ago. Events do not occur in isolation. GLBA
increased TBTF in AIG and Citi. TBTF forced TARP. GLBA greased the skids for CFMA. Democrats gained
majority, but not filibuster proof, caught between Iraq and a hard place following their votes
for TARP and a broader understanding of their participation in the unanimous consent passage of
the CFMA, over "objection" by Senators James Inhofe (R-OK) and Paul Wellstone (D-MN). We
have had a Republican majority in the House since the 2010 election and now they have the Senate
as well. If you are that sure that voters just choose divided government, then aren't we better
off to have a Republican POTUS and Democratic Congress?
sanjait -> RC AKA Darryl, Ron...
"I ran all out of ceteris paribus quite some time ago. Events do not occur in isolation.
GLBA increased TBTF in AIG and Citi. TBTF forced TARP. GLBA greased the skids for CFMA. "
I know you think this is a really meaningful string that evidences causation, but it just looks
like you are reaching, reaching, reaching ...
RC AKA Darryl, Ron -> sanjait...
Maybe. No way to say for sure. It certainly fits the kind of herd mentality that I always
saw in corporate Amerika until I retired. The William Greider article posted by RGC was very consistent
in its account by John Reed with the details of one or two books written about AIG back in 2009
or so. I don't have time to hunt them up now. Besides, no one would read them anyway.
I am voting for whoever wins the Democratic nomination for POTUS. Bernie without a like-minded
Congress would not do much good. But when we shoot each other down here at EV without offering
any agreement or consideration that we might not be 100% correct, then that goes against Doc Thoma's
idea of an open forum. Granted, with my great big pair then I am willing to state my opinion with
no consideration for validation or acceptance, but not everyone has that degree of a comfort zone.
Besides, I am so old an cynical that shooting down the overdogs that go after the underdogs is
one of the few things that I still care about.
RGC -> Paine ...
GS was one of several actions taken by the New Deal. That it wasn't sufficient by itself doesn't
equate to it wasn't beneficial.
Glass-Steagall: Warren and Sanders bring it back into focus
Madonna Gauding / May 13, 2015
Senators Bernie Sanders and Elizabeth Warren are putting a new focus on the Glass-Steagall
Act, which was, unfortunately, repealed in 1999 and led directly to the financial crises we have
faced ever since. Here's a bit of history of this legislative debacle from an older post on Occasional
Planet published several years ago :
On November 4, 1999, Senator Byron Dorgan (D-ND) took to the floor of the senate to make an
impassioned speech against the repeal of the Glass-Steagall Act, (alternately known as Gramm Leach
Biley, or the "Financial Modernization Act") Repeal of Glass-Steagall would allow banks to merge
with insurance companies and investments houses. He said "I want to sound a warning call today
about this legislation, I think this legislation is just fundamentally terrible."
According to Sam Stein, writing in 2009 in the Huffington Post, only eight senators voted against
the repeal. Senior staff in the Clinton administration and many now in the Obama administration
praised the repeal as the "most important breakthrough in the world of finance and politics in
decades"
According to Stein, Dorgan warned that banks would become "too big to fail" and claimed that
Congress would "look back in a decade and say we should not have done this." The repeal of Glass
Steagall, of course, was one of several bad policies that helped lead to the current economic
crisis we are in now.
Dorgan wasn't entirely alone. Sens. Barbara Boxer, Barbara Mikulski, Richard Shelby, Tom Harkin,
Richard Bryan, Russ Feingold and Bernie Sanders also cast nay votes. The late Sen. Paul Wellstone
opposed the bill, and warned at the time that Congress was "about to repeal the economic stabilizer
without putting any comparable safeguard in its place."
Democratic Senators had sufficient knowledge about the dangers of the repeal of Glass Steagall,
but chose to ignore it. Plenty of experts warned that it would be impossible to "discipline" banks
once the legislation was passed, and that they would get too big and complex to regulate. Editorials
against repeal appeared in the New York Times and other mainstream venues, suggesting that if
the new megabanks were to falter, they could take down the entire global economy, which is exactly
what happened. Stein quotes Ralph Nader who said at the time, "We will look back at this and wonder
how the country was so asleep. It's just a nightmare."
According to Stein:
"The Senate voted to pass Gramm-Leach-Bliley by a vote of 90-8 and reversed what was, for
more than six decades, a framework that had governed the functions and reach of the nation's
largest banks. No longer limited by laws and regulations commercial and investment banks could
now merge. Many had already begun the process, including, among others, J.P. Morgan and Citicorp.
The new law allowed it to be permanent. The updated ground rules were low on oversight and
heavy on risky ventures. Historically in the business of mortgages and credit cards, banks
now would sell insurance and stock.
Nevertheless, the bill did not lack champions, many of whom declared that the original legislation
- forged during the Great Depression - was both antiquated and cumbersome for the banking industry.
Congress had tried 11 times to repeal Glass-Steagall. The twelfth was the charm.
"Today Congress voted to update the rules that have governed financial services since
the Great Depression and replace them with a system for the 21st century," said then-Treasury
Secretary Lawrence Summers. "This historic legislation will better enable American companies
to compete in the new economy."
"I welcome this day as a day of success and triumph," said Sen. Christopher Dodd, (D-Conn.).
"The concerns that we will have a meltdown like 1929 are dramatically overblown," said Sen.
Bob Kerrey, (D-Neb.).
"If we don't pass this bill, we could find London or Frankfurt or years down the road Shanghai
becoming the financial capital of the world," said Sen. Chuck Schumer, D-N.Y. "There are many
reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain
competitive."
Unfortunately, the statement by Chuck Schumer sounds very much like it was prepared by a lobbyist.
This vote underscores the way in which our elected officials are so heavily swayed by corporate
and banking money that our voices and needs become irrelevant. It is why we need publicly funded
elections. Democratic senators, the so-called representatives of the people, fell over themselves
to please their Wall Street donors knowing full well there were dangers for the country at large,
for ordinary Americans, in repealing Glass-Steagall.
It is important to hold Democratic senators (along with current members of the Obama administration)
accountable for the significant role they have played in the current economic crisis that has
caused so much suffering for ordinary Americans. In case you were wondering, the current Democratic
Senators who voted yes to repeal the Glass-Steagall act are the following:
Daniel Akaka – Max Baucus – Evan Bayh – Jeff Bingaman – Kent Conrad – Chris Dodd – Dick Durbin
– Dianne Feinstein – Daniel Inouye – Tim Johnson – John Kerry – Herb Kohl – Mary Landrieu – Frank
Lautenberg – Patrick Leahy – Carl Levin – Joseph Lieberman – Blanche Lincoln – Patty Murray –
Jack Reed – Harry Reid – Jay Rockefeller – Chuck Schumer – Ron Wyden
Former House members who voted for repeal who are current Senators.
Mark Udall [as of 2010] – Debbie Stabenow – Bob Menendez – Tom Udall -Sherrod Brown
No longer in the Senate, or passed away, but who voted for repeal:
Joe Biden -Ted Kennedy -Robert Byrd
These Democratic senators would like to forget or make excuses for their enthusiastic vote
on the repeal of Glass Steagall, but it is important to hold them accountable for helping their
bank donors realize obscene profits while their constituents lost jobs, savings and homes. And
it is important to demand that they serve the interests of the American people.
*
[The repeal of Glass Steagal was a landmark victory in deregulation that greased the skids
for the passage of CFMA once Democrats had been further demoralized by the SCOTUS decision on
Bush-v-Gore. The first vote on GLBA was split along party lines, but passed because Republicans
had majority and Clinton was willing to sign which was clear from the waiver that had been granted
to illegal Citi merger with Travelers. Both Citi and AIG mergers contributed to too big to fail.
The CFMA was the nail in the coffin that probably would have never gotten off the ground if Democrats
had held the line on the GLBA. Glass-Steagal was insufficient as a regulatory system to prevent
the 2008 mortgage crisis, but it was giant as an icon of New Deal financial system reform. Its
loss institutionalized too big to fail.]
pgl -> RC AKA Darryl, Ron...
Gramm Leach Biley was a mistake. But it was not the only failure of US regulatory policies
towards financial institutions nor the most important. I think that is what Hillary Clinton
is saying.
RC AKA Darryl, Ron -> pgl...
It was more symbolic caving in on financial regulation than a specific technical failure except
for making too big to fail worse at Citi and AIG. It marked a sea change of thinking about financial
regulation. Nothing mattered any more, including the CFMA just a little over one year later. Deregulation
of derivatives trading mandated by the CFMA was a colossal failure and it is not bizarre to believe
that GLBA precipitated the consensus on financial deregulation enough that after the demoralizing
defeat of Democrats in Bush-v-Gore then there was no New Deal spirit of financial regulation left.
Social development is not just a series of unconnected events. It is carried on a tide of change.
A falling tide grounds all boats.
pgl -> RC AKA Darryl, Ron...
We had a financial dereg craze back in the late 1970's and early 1980's which led to the S&L
disaster. One would have thought we would have learned from that. But then came the dereg craziness
20 years later. And this disaster was much worse.
I don't care whether Hillary says 1999
was a mistake or not. I do care what the regulations of financial institutions will be like going
forward.
RC AKA Darryl, Ron -> pgl...
I cannot disagree with any of that.
sanjait -> RC AKA Darryl, Ron...
"Deregulation of derivatives trading mandated by the CFMA was a colossal failure and it
is not bizarre to believe that GLBA precipitated the consensus"
Yeah, it is kind of bizarre to blame one bill for a crisis that occurred largely because another
bill was passed, based on some some vague assertion about how the first bill made everyone think
crazy.
RC AKA Darryl, Ron -> sanjait...
Democrats did not vote for GLBA until after reconciliation between the House and Senate bills.
Democrats were tossed a bone in the Community Reinvestment Act financing provisions and given
that Bill Clinton was going to sign anyway and that Republicans were able to pass the bill without
a single vote from Democrats then all but a few Democrats bought in. They could not stop it, so
they just bought into it. I thought there was supposed to be an understanding of behaviorism devoted
to understanding the political economy. For that matter Republicans did not need Democrats to
vote for the CFMA either, but they did. That gave Republicans political cover for whatever went
wrong later on. No one with a clue believed things would go well from the passage of either of
these bills. It was pure Wall Street driven kleptocracy.
likbez -> sanjait...
It was not one bill or another. It was a government policy to get traders what they want.
"As the western world wakes to the fact it is in the middle of a debt crisis spiral, intelligent
voices are wondering how this manifested itself? As we speak, those close to the situation could
be engaging in historical revisionism to obfuscate their role in the design of faulty leverage
structures that were identified in the derivatives markets in 1998 and 2008. These same design
flaws, first identified in 1998, are persistent today and could become graphically evident in
the very near future under the weight of a European debt crisis.
Author and Bloomberg columnist William Cohan chronicles the fascinating start of this historic
leverage implosion in his recent article Rethinking Robert Rubin. Readers may recall it was Mr.
Cohan who, in 2004, noted leverage issues that ultimately imploded in 2007-08.
At some point, market watchers will realize the debt crisis story will literally change the
world. They will look to the root cause of the problem, and they might just find one critical
point revealed in Mr. Cohan's article.
This point occurs in 1998 when then Commodity Futures Trading Commission (CFTC) ChairwomanBrooksley
Born identified what now might be recognized as core design flaws in leverage structure used in
Over the Counter (OTC) transactions. Ms. Born brought her concerns public, by first asking just
to study the issue, as appropriate action was not being taken. She issued a concept release paper
that simply asked for more information. "The Commission is not entering into this process with
preconceived results in mind," the document reads.
Ms. Born later noted in, the PBS Frontline documentary on the topic speculation at the CFTC
was the unregulated OTC derivatives were opaque, the risk to the global economy could not be determined
and the risk was potentially catastrophic. As a result of this inquiry, Ms. Born was ultimately
forced from office.
This brings us to Lawrence Summers, the former Treasury Secretary of the United States and
at the time right hand man to then Treasury Security Robert Rubin. Mr. Summers was widely credited
with implementation of the aggressive tactics used to remove Ms. Born from her office, tactics
that multiple sources describe as showing an old world bias against women piercing the glass ceiling.
According to numerous published reports, Mr. Summers was involved in. silencing those who questioned
the opaque derivative product's design. "
RC AKA Darryl, Ron -> Paine ...
TBTF on steroids, might as well CFMA - why not?
Bubbles with less TBTF and a lot less credit
default swaps would have been a lot less messy going in. Without TARP, then Congress might have
still had the guts for making a lesser New Deal.
EMichael -> RC AKA Darryl, Ron...
TARP was window dressing. The curtain that covered up the FED's actions.
pgl -> RGC...
Where have I heard about William Greider? Oh yea - this critique of something stupid he wrote
about a Supreme Court decision:
"Exotic financial instruments like derivatives and credit-default swaps flourished, enabling
old-line bankers to share in the fun and profit on an awesome scale."
These would have flourished even if Glass-Steagall remained on the books. Leave it to RGC to
find some critic of HRC who knows nothing about financial markets.
RGC -> pgl...
Derivatives flourished because of the other deregulation under Clinton, the CFMA. The repeal of
GS helped commercial banks participate.
RGC -> pgl...
The repeal of GS helped commercial banks participate.
Fred C. Dobbs -> pgl...
Warren Buffet used to rail about how risky derivative investing is, until he realized they
are *extremely* important in the re-insurance biz, which is a
big part of Berkshire Hathaway.
Hillary Clinton, Bernie Sanders, and Cracking Down on Wall Street
by Dean Baker
Published: 12 December 2015
The New Yorker ran a rather confused piece on Gary Sernovitz, a managing director at the investment
firm Lime Rock Partners, on whether Bernie Sanders or Hillary Clinton would be more effective
in reining in Wall Street. The piece assures us that Secretary Clinton has a better understanding
of Wall Street and that her plan would be more effective in cracking down on the industry. The
piece is bizarre both because it essentially dismisses the concern with too big to fail banks
and completely ignores Sanders' proposal for a financial transactions tax which is by far the
most important mechanism for reining in the financial industry.
The piece assures us that too big to fail banks are no longer a problem, noting their drop
in profitability from bubble peaks and telling readers:
"not only are Sanders's bogeybanks just one part of Wall Street but they are getting less
powerful and less problematic by the year."
This argument is strange for a couple of reasons. First, the peak of the subprime bubble frenzy
is hardly a good base of comparison. The real question is should we anticipate declining profits
going forward. That hardly seems clear. For example, Citigroup recently reported surging profits,
while Wells Fargo's third quarter profits were up 8 percent from 2014 levels.
If Sernovitz is predicting that the big banks are about to shrivel up to nothingness, the market
does not agree with him. Citigroup has a market capitalization of $152 billion, JPMorgan has a
market cap of $236 billion, and Bank of America has a market cap of $174 billion. Clearly investors
agree with Sanders in thinking that these huge banks will have sizable profits for some time to
come.
The real question on too big to fail is whether the government would sit by and let a Goldman
Sachs or Citigroup go bankrupt. Perhaps some people think that it is now the case, but I've never
met anyone in that group.
Sernovitz is also dismissive on Sanders call for bringing back the Glass-Steagall separation
between commercial banking and investment banking. He makes the comparison to the battle over
the Keystone XL pipeline, which is actually quite appropriate. The Keystone battle did take on
exaggerated importance in the climate debate. There was never a zero/one proposition in which
no tar sands oil would be pumped without the pipeline, while all of it would be pumped if the
pipeline was constructed. Nonetheless, if the Obama administration was committed to restricting
greenhouse gas emissions, it is difficult to see why it would support the building of a pipeline
that would facilitate bringing some of the world's dirtiest oil to market.
In the same vein, Sernovitz is right that it is difficult to see how anything about the growth
of the housing bubble and its subsequent collapse would have been very different if Glass-Steagall
were still in place. And, it is possible in principle to regulate bank's risky practices without
Glass-Steagall, as the Volcker rule is doing. However, enforcement tends to weaken over time under
industry pressure, which is a reason why the clear lines of Glass-Steagall can be beneficial.
Furthermore, as with Keystone, if we want to restrict banks' power, what is the advantage of letting
them get bigger and more complex?
The repeal of Glass-Steagall was sold in large part by boasting of the potential synergies
from combining investment and commercial banking under one roof. But if the operations are kept
completely separate, as is supposed to be the case, where are the synergies?
But the strangest part of Sernovitz's story is that he leaves out Sanders' financial transactions
tax (FTT) altogether. This is bizarre, because the FTT is essentially a hatchet blow to the waste
and exorbitant salaries in the industry.
Most research shows that trading volume is very responsive to the cost of trading, with most
estimates putting the elasticity close to one. This means that if trading costs rise by 50 percent,
then trading volume declines by 50 percent. (In its recent analysis of FTTs, the Tax Policy Center
assumed that the elasticity was 1.5, meaning that trading volume decline by 150 percent of the
increase in trading costs.) The implication of this finding is that the financial industry would
pay the full cost of a financial transactions tax in the form of reduced trading revenue.
The Tax Policy Center estimated that a 0.1 percent tax on stock trades, scaled with lower taxes
on other assets, would raise $50 billion a year in tax revenue. The implied reduction in trading
revenue was even larger. Senator Sanders has proposed a tax of 0.5 percent on equities (also with
a scaled tax on other assets). This would lead to an even larger reduction in revenue for the
financial industry.
It is incredible that Sernovitz would ignore a policy with such enormous consequences for the
financial sector in his assessment of which candidate would be tougher on Wall Street. Sanders
FTT would almost certainly do more to change behavior on Wall Street then everything that Clinton
has proposed taken together by a rather large margin. It's sort of like evaluating the New England
Patriots' Super Bowl prospects without discussing their quarterback.
Syaloch -> Peter K....
Great to see Baker's acknowledgement that an updated Glass-Steagall is just one component
of the progressive wing's plan to rein in Wall Street, not the sum total of it. Besides, if Wall
Street types don't think restoring Glass-Steagall will have any meaningful effects, why do they
expend so much energy to disparage it? Methinks they doth protest too much.
Peter K. -> Syaloch...
Yes that's a good way to look it. Wall Street gave the Democrats and Clinton a lot of campaign
cash so that they would dismantle Glass-Steagall. If they want it done, it's probably not
a good idea.
EMichael -> Syaloch...
Slippery slope. Ya' gotta find me a business of any type that does not protest any kind of regulation
on their business.
Syaloch -> EMichael...
Yeah, but usually because of all the bad things they say will happen because of the regulation.
The question is, what do they think of Clinton's plan? I've heard surprisingly little about that,
and what I have heard is along these lines:
http://money.cnn.com/2015/10/08/investing/hillary-clinton-wall-street-plan/
"Hillary Clinton unveiled her big plan to curb the worst of Wall Street's excesses on Thursday.
The reaction from the banking community was a shrug, if not relief."
pgl -> Syaloch...
Two excellent points!!!
sanjait -> Syaloch...
"Besides, if Wall Street types don't think restoring Glass-Steagall will have any meaningful
effects, why do they expend so much energy to disparage it? Methinks they doth protest too
much."
It has an effect of shrinking the size of a few firms, and that has a detrimental effect on
the top managers of those firms, who get paid more money if they have larger firms to manage. But it has little to no meaningful effect on systemic risk.
So if your main policy goal is to shrink the compensation for a small number of powerful Wall
Street managers, G-S is great. But if you actually want to accomplish something useful to the American people, like limiting
systemic risk in the financial sector, then a plan like Hillary's is much much better. She explained
this fairly well in her recent NYT piece.
Paine -> Peter K....
There is absolutely NO question Bernie is for real. Wall Street does not want Bernie. So they'll
let Hillary talk as big as she needs to . Why should we believe her when an honest guy like
Barry caved once in power
Paine -> Paine ...
Bernie has been anti Wall Street his whole career . He's on a crusade. Hillary is pulling a sham
bola
Paine -> Paine ...
Perhaps too often we look at Wall Street as monolithic whether consciously or not. Obviously we
know it's no monolithic: there are serious differences
When the street is riding high especially. Right now the street is probably not united but
too cautious to display profound differences in public. They're sitting on their hands waiting
to see how high the anti Wall Street tide runs this election cycle. Trump gives them cover and
I really fear secretly Hillary gives them comfort
This all coiled change if Bernie surges. How that happens depends crucially on New Hampshire.
Not Iowa
EMichael -> Paine ...
If Bernie surges and wins the nomination, we will all get to watch the death of the Progressive
movement for a decade or two. Congress will become more GOP dominated, and we will have a President
in office who will make Hoover look like a Socialist.
You should like the moderate Democrats after George McGovern ran in 1972. I'm hoping we have another
1964 with Bernie leading a united Democratic Congress.
EMichael -> pgl...
Not a chance in the world. And I like Sanders much more than anyone else. It just simply cannot,
and will not, happen. He is a communist. Not to me, not to you, but to the vast majority
of American voters.
pgl -> EMichael...
He is not a communist. But I agree - Hillary is winning the Democratic nomination. I have only
one vote and in New York, I'm badly outnumbered.
ilsm -> Paine ...
I believe Hillary will be to liberal causes after she is elected as LBJ was to peace in Vietnam.
Like Bill and Obomber.
pgl -> ilsm...
By 1968, LBJ finally realized it was time to end that stupid war. But it seems certain members
in the State Department undermined his efforts in a cynical ploy to get Nixon to be President.
The Republican Party has had more slime than substance of most of my life time.
pgl -> Peter K....
Gary Sernovitz, a managing director at the investment firm Lime Rock Partners? Why are we listening
to this guy too. It's like letting the fox guard the hen house.
sanjait -> Peter K....
"The piece is bizarre both because it essentially dismisses the concern with too big to
fail banks and completely ignores Sanders' proposal for a financial transactions tax which
is by far the most important mechanism for reining in the financial industry."
This is just wrong. Is financial system risk in any way correlated with the frequency
of transactions? Except for market volatility from HFT ... no. The financial crisis wasn't caused
by a high volume of trades. It was caused by bad investments into highly illiquid assets. Again,
great example of wanting to punish Wall Street but not bothering to think about what actually
works.
Peter K. said...
Robert Reich to the Fed: this is not the time to raise rates.
Iceland, too, is looking at a radical transformation of its money
system, after suffering the crushing boom/bust cycle of the private banking model that bankrupted
its largest banks in 2008. According to a March 2015 article in the UK Telegraph:
Iceland's government is considering a revolutionary monetary proposal – removing the power
of commercial banks to create money and handing it to the central bank. The proposal, which would
be a turnaround in the history of modern finance, was part of a report written by a lawmaker from
the ruling centrist Progress Party, Frosti Sigurjonsson, entitled "A better monetary system for
Iceland".
"The findings will be an important contribution to the upcoming discussion, here and elsewhere,
on money creation and monetary policy," Prime Minister Sigmundur David Gunnlaugsson said. The
report, commissioned by the premier, is aimed at putting an end to a monetary system in place
through a slew of financial crises, including the latest one in 2008.
Under this "Sovereign Money" proposal, the country's central bank would become the only creator
of money. Banks would continue to manage accounts and payments and would serve as intermediaries
between savers and lenders. The proposal is a variant of the Chicago Plan promoted by Kumhof and
Benes of the IMF and the Positive Money group in the UK.
Public Banking Initiatives in Iceland, Ireland and the UK
A major concern with stripping private banks of the power to create money as deposits when
they make loans is that it will seriously reduce the availability of credit in an already sluggish
economy. One solution is to make the banks, or some of them, public institutions. They would still
be creating money when they made loans, but it would be as agents of the government; and the profits
would be available for public use, on the model of the US Bank of North Dakota and the German
Sparkassen (public savings banks).
In Ireland, three political parties – Sinn Fein, the Green Party and Renua Ireland (a new party)
- are now supporting initiatives for a network of local publicly-owned banks on the Sparkassen
model. In the UK, the New Economy Foundation (NEF) is proposing that the failed Royal Bank of
Scotland be transformed into a network of public interest banks on that model. And in Iceland,
public banking is part of the platform of a new political party called the Dawn Party.
December 11, 2015
Reinventing Banking: From Russia to Iceland to Ecuador
"Banks would continue to manage accounts and payments and would serve as intermediaries between
savers and lenders."
OK but that means they issue bank accounts which of course we call deposits.
So is this just semantics? People want checking accounts. People want savings accounts. Otherwise
they would not exist. Iceland plans to do what to stop the private sector from getting what it
wants?
I like the idea of public banks. Let's nationalize JPMorganChase so we don't have to listen
to Jamie Dimon anymore!
sanjait -> pgl...
I don't know for sure (not bothering to search and read the referenced proposals), but I assumed
the described proposal was for an end to fractional reserve banking. Banks would have to have
full reserves to make loans. Or something. I could be wrong about that.
Syaloch said...
Sorry, but Your Favorite Company Can't Be Your Friend
To think that an artificial person, whether corporeal or corporate, can ever be your friend
requires a remarkable level of self-delusion.
A commenter on the Times site aptly quotes Marx in response:
"The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal,
idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to
his "natural superiors", and has left remaining no other nexus between man and man than naked
self-interest, than callous "cash payment". It has drowned the most heavenly ecstasies of religious
fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical
calculation. It has resolved personal worth into exchange value, and in place of the numberless
indefeasible chartered freedoms, has set up that single, unconscionable freedom - Free Trade.
In one word, for exploitation, veiled by religious and political illusions, it has substituted
naked, shameless, direct, brutal exploitation.
"The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked
up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet,
the man of science, into its paid wage labourers."
This is an almost perfect illustration of the credibility trap.
One cannot allow the illusion to falter, even a little, to the bitter end.
And as the fraud fades, the force intensifies, becoming almost rabid in its deflection.
Because that illusion has become the center of a hollowed people's being, their
raison d'être, a mythological justification for their existence.
I came across a nice, compact interview with Chris Hedges which illuminates
his thesis of the decline of the American Empire
and the illusions and the end of rational thinking that accompanies it.
Empires seem to give off quite a bit of flash in their latter stages, rather
like the last gasp of a dying star.
The interviewer, Allan Gregg, does a particularly nice job of drawing Hedges
out.
I would like to add an observation I came to in thinking further about the
Sophie Scholl piece which I put up earlier today. Perhaps there is something
about gardening that focuses the mind.
The almost frenetic preoccupation and adherence to the Nazi ideology in the
latter stages of the war, when it was obvious to any rational observer that
they could not win, is remarkable. I had been particularly
struck in my reading some time ago with the 'wolf packs' of Nazis who had raged
through Berlin, rounding up old men and even boys who had not joined the Volkssturm,
and hanging them, even while the Russians were shelling the Reichstag.
It never made sense to me until today.
"The radio announced that Hitler had come out of his safe bomb-proof bunker
to talk with the fourteen to sixteen year old boys who had 'volunteered'
for the 'honor' to be accepted into the SS and to die for their Fuhrer in
the defense of Berlin. What a cruel lie! These boys did not volunteer,
but had no choice, because boys who were found hiding were hanged as traitors
by the SS as a warning that, 'he who was not brave enough to fight had to
die.'
When trees were not available, people were strung up on lamp posts. They
were hanging everywhere, military and civilian, men and women, ordinary
citizens who had been executed by a small group of fanatics. It appeared
that the Nazis did not want the people to survive because a lost war, by
their rationale, was obviously the fault of all of us. We had not sacrificed
enough and therefore, we had forfeited our right to live, as only the
government was without guilt."
Dorothea von Schwanenfluegel, Eyewitness account, Fall
of Berlin 1945
I was reminded of this phenomenon by the trial of Sophie Scholl, and her words
to the judge Roland Freisler, as he ranted his virulent condemnations at them.
'Soon you will be in our place,' she said to him. He did escape the hangman's
noose at Nuremburg, but only by virtue of an Allied bomb in 1945. When his body
was brought to hospital an orderly remarked, 'It was God's verdict.' He was
buried in an unmarked grave, without ceremony and unmourned. Much like his beloved
Fuhrer.
This is an almost perfect illustration
of the credibility trap. One cannot allow the illusion to falter, even a little,
to the bitter end. And as the fraud fades, the force intensifies, becoming almost
rabid in its deflection. Because that illusion has become the center of a hollowed
people's being, their raison d'être, a mythological justification for their
existence.
If the ideology had been a lie, then they are not heroes and gods on earth,
but monsters and criminals, and their life has been self-serving and meaningless,
without significance and honor. And that is the credibility trap.
A credibility trap is a situation in which the regulatory, political and/or
the informational functions of a society have been thoroughly taken in by a corrupting
influence and a fraud, so that one cannot address the situation
without implicating, at least incidentally, a broad swath of the power structure
and the status quo who at least tolerated it, if not profited directly from it,
and most likely continue to do so.
The failure of Obama's Justice Department to engage in any systemic investigations
and indictments of a thoroughly rotten and corrupt financial system that has
laid waste to the real economy is an almost perfect example of the credibility
trap.
A credibility trap is a situation in which the
regulatory, political and/or the informational functions of a society have
been thoroughly taken in by a corrupting influence and a fraud,
so that one cannot address the situation without implicating, at least incidentally,
a broad swath of the power structure and the status quo who at least tolerated
it, if not profited directly from it, and most likely continue to do so.
They become susceptible to various forms of blackmail. And so a failed policy
can become almost self-sustaining long after it is seen to have failed,
and even become counterproductive, because admitting failure is not an option
for those holding power.
Another example is the blatant fraud, and principles not of productivity
but of prey, that prevail on the financial asset exchanges and the monetary
system, the stealing of customer funds, and the manipulation of commodity markets
such as silver. And it expresses itself in the frivilous coarseness of spectacle,
and careless brutality of decline.
"Happy Hunger Games. And may the odds be ever in your favor."
Normally a two party system or a balance of powers
would correct such a situation, but if the fraud is pervasive and enduring enough,
those remedies can lose their effectiveness since the fraud binds even seemingly
diverse elements in its grasp. And therein lies the trap.
There
is a general loss of honor, a disparagement of moral principles, the common
welfare, and a sense of 'service.' People in power are creatures of the system,
'getting their ticket punched' in Washington, as resume builder on their way
to an even more lucrative position back in the corrupt system where they can
leverage their connections and knowledge of the system to further undermine
the rule of law. Their guiding principles are self-referential greed and power.
After one of the most outrageous periods of widespread fraud in a major developed
country, prosecutions for fraud are at twenty year lows. Who expected this outcome
from an election in which the theme was change and reform?
Here is a recent article,
Why Can't Obama Bring Wall St to Justice, asking the broader question inferred
by this video interview. Why? And the answer is not to be found in making excuses
and allowing him to hide behind the incompetency or disengagement defense so
popular in American management circles.
And if you think that voting for the other guy in this case, the emotinally
engaging but fatally flawed red v. blue paradigm, is going to provide
a cure you are sadly mistaken. The other guy in this case is the poster child
for most of the problems that face a nation under siege by a financial elite
engaged in an economic, ideological, and political coup d'etat.
As Glenn Greenwald recently put it:
"You can often, and I would say more often than
not, in leading opinion-making elite circles, find an expressed renouncement
or repudiation of that principle [of the rule of law]...All
of these acts entail very aggressive and explicit arguments that the most
powerful political and financial elites in our society should not be, and
are not, subject to the rule of law because it is too disruptive, it is
too divisive, it is more important that we should look forward, that we
find ways to avoid repeating the problem...the rule of law is not that important
of a value any longer...
The law is no respecter of persons, but the law
is also a respecter of reality, meaning if it is too disruptive or divisive
that it is actually in our common good, not the elite criminals, but in
our common good, to exempt the most powerful from the consequences of their
criminal acts, and that has become the template used in each of these instances."
And thanks to the apathy of the people and the gullibility of the badly used,
self-proclaimed 'patriots' they are winning.
"The disposition to admire, and almost to worship, the rich and the powerful,
and to despise, or, at least to neglect, persons of poor and mean condition
is the great and most universal cause of the corruption of our moral sentiments."
Adam Smith
Such unsustainable social arrangements are backed by force and fraud. And as
the fraud loses its power over time, force must increase, until there is an
end in genuine reform, or evenutal self-destruction.
It's no secret that America is suffering a crisis of confidence. The breadth
and depth of that crisis, however, is overwhelming. Attention has been focused
on Congress's low ratings, but Gallup reported this week that Americans were
expressing "historic negativity" toward the U.S. government overall.
Eighty-one percent are dissatisfied with the way
the country is being governed, nine points higher than the previous record during
the Bush administration. From the mid-1980s through the spurt
of post-9/11 unity, fewer than 40 percent were dissatisfied with our overall
government. Now it's more than twice that.
In the aggregate, Americans repose little confidence in the officials who
populate our government. Through the 1970s, two-thirds expressed trust and confidence
in those who held public office. That number too has receded to a record low,
45 percent.
Lack of confidence is hardly confined to government and public officials. In
the '70s, about a third of Americans had confidence in big business - now it's
just 19 percent. In 1979, 60 percent expressed confidence in banks. Now it's
just 23 percent.
The media, too, have suffered in the public mind. Pew reports that in 1985,
55 percent thought news organizations got their facts straight - a number that
has been cut by more than half. Over the same period, the number perceiving
political bias in the media rose almost 20 points.
Yet declining confidence is hardly new. Already 35 years ago, the Trilateral
Commission was so worried about the consequences of this affliction that it
commissioned a special report titled "The Crisis of Democracy," which concluded
that the "lack of confidence in the functioning of the institutions of democratic
government have thus now become widespread." A few years later, President Carter
made declining confidence the centerpiece of his now-famous "Malaise" speech.
In "Midnight in Paris," Woody Allen lampooned romantic notions of earlier,
golden ages - but there was a golden age of confidence. A former professor of
mine, the late Robert Lane, wrote a pair of papers in the mid 1960s tracing
rising confidence in institutions from the beginning of polling in the '30s
through the '60s. Those years proved the high-water mark, though, as confidence
eroded though the '70s. As bad as things were in the '70s, though, they are
demonstrably worse today.
Any number of theories have been advanced purporting to explain the crisis
of confidence, and most have proved wanting.
Performance is likely the most important factor. When things are going well,
Americans have confidence in their institutions. When politicians prove good
stewards of the economy and employ wise modes of decisionmaking, confidence
is greater. When the economy is in a shambles, when the far right regularly
brings the federal government to the brink of closure, even default, and all
the way to downgrade, it is difficult for citizens to blithely express confidence
in their leaders or institutions. When banks cause financial meltdown, it's
hard to repose confidence in banks. When media outlets blatantly pursue a partisan
agenda and ally themselves with movements and parties, it is reasonable for
people to conclude they are biased.
Reality counts. A lot. In my view, however, while objective indicia of performance
are central, they are not the whole story. Though evidence is admittedly sparse,
I can't help but believe that the anti-government narratives of both left and
right contribute to the crisis. Republicans are by nature anti-government, so
their vision of government as picking your pocket and wasting your money furthers
their ideological goals.
By contrast, those on the left who raise money and issues by repeatedly bewailing
the capture of government by special interests undermine confidence in government
and do themselves no long-term favors.
Restoring confidence will require better outcomes, but also a commitment
from leaders across the spectrum that they are willing to forgo short-term gain
to rebuild the nation's spirit.
Mellman is president of The Mellman Group and has worked for Democratic
candidates and causes since 1982. Current clients include the Senate Majority
Leader Harry Reid (D-Nev.) and House Minority Whip Steny Hoyer (D-Md.).
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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For the part 40 years or so, neoliberalism has reigned supreme over much of the western capitalist
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The Myths of Neoliberal Economists. Friday, April ... to their home markets as carrots to induce the
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It's time to expose the myths of the neoliberal economic model ... Liberal party Global economy
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Neo-Liberal Genetics: The Myths and Moral Tales of Evolutionary Psychology by Susan McKinnon
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Neoliberalism (neo-liberalism) refers primarily to the 20th-century resurgence of 19th-century ideas
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Translated articles on the state, the market and neoliberal myths, Embedding the economy in society,
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Neo-Liberal Genetics:The Myths and Moral Tales of Evolutionary Psychology. Science; Prickly Paradigm
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As for the other myths and lies about capitalism, the most important in my view is the myth that
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Its a generational thing. Right after WW2, many of the elite had just that epiphany that unless they have the common people behind them, they are toast. But now they are dead or dying, and their grandkids are basically once more thinking that they can go it alone. This because they have not had the required experiences that help develop the wisdom.
What Marx saw long ago, we can see today, and without relegating ourselves to his analysis, come to our own conclusions. Contradictions, summed up well by Lincoln as a house divided against itself cannot stand is just as true today. Millions of guns to protect the citizenry from tyranny have only resulted in a 1/4 million murders and 5 times as many shootings since Jan 1, 2000, some placing people in wheel chairs and other crippling gunshot afflictions, and more and more institutionalized state oppression, economic exploitation and miserable lives propped up in an alcoholic haze until the liver or brain gives out. We have more food than we know what to do with so we throw away almost as much as we eat. And we have eaten ourselves into morbid obesity, diabetes and heart disease. The contradictions abound from the kitchen table to the kitchen cabinet of the White House where there seems to be nothing passed so freely as bad advice.
The Welfare State arose from the sacrifices of the population in giving their sweat, blood and tears to defend their nation during war, to be rewarded for their sacrifices, rewards which were demands for power sharing and more in the paycheck, more benefits and more time to enjoy the life spent in a more prosperous world. It seems to me that Obamacare is not simply in death spiral all of its own making, but even more so, because it is the best attempt capitalism can produce in an America that is the most capitalist of societies down to the marrow its bones. Little competition from the Church or the social relations between nobles and subjects set for in the laws that were disestablished to free markets for commodification and money making. Money making enterprises structured the laws from slavery, to the voting franchise with little from the state to cushion any of the hardships of life in America.
Health care is the largest industry we have. It is approaching 20% of the GNP. I remember the great national freak out in the late 1970s when congress realized it was approaching 10%. Nothing seems to be stopping the costs from spiraling upward and onward. No risk of deflation here where nothing is spared to save a life, operate on some poor little afflicted child, or buy a piece of equipment the size of an office building that shoots a proton beam at cancer, one cancer cell at a time.
When Obama Care becomes a clear burden to even the democrats who can point to it now as some sort of accomplishment, and it is an accomplishment for the people who finally get to see a doctor, get into a hospital, get that operation or diagnosis that saves their lives, when even those accomplishments number in the millions, it will be part of a health care industry for which $Trillions of dollars can no longer be justified or even funded. As that financial collapse approaches, it would be better for politicians to declare the defeat of a program better rolled into one universal single payer system currently operating as Medicare, than try to reform, shore up or the old tried and true public lie, get rid of its waste and corruption.
Declare victory with Medicare as the solution and put everyone into it. The only paper work left should be each person's medical history with diagnosis and healing as the happy ending to the story.
There is a fundamental error in perception in the Western world that is so pervasive that people can't even see it. As a most basic component of a healthy society people need to be able to survive at a local community level without outside support. Only after that is taken care of should people concern themselves with luxuries, inter-community and international relations.
Welfare–not to mention other government services–can appear to have positive impacts if one only looks at their effects in isolation, however I think there is a devastating and pernicious impact on people's ability to form community bonds and have local resilience with things like welfare.
Also, let's also not forget that Americans consume far more of the earth's precious resources than any other group in the world. Welfare etc are social services that can only be funded through the world-wide looting operation of the American empire. Do these recipients of empire benefits have a moral right to share in the loot of empire? Perhaps instead of domestic welfare it would be more ethical for the American empire to provide social benefits for the indigenous peoples who are forced from their lands to work like slaves for the empire's benefit. Although admittedly if the American empire used it's loot for the benefit of the foreign peoples whose lives it destroyed then there'd probably be nothing left to spread around to the military, or to pacify and police the domestic population. So I suppose that's not a serious proposal.
Welfare etc are social services that can only be funded through the world-wide looting operation of the American empire
This is obviously not true. Unless every social democratic country in the world is considered as a piece of the American empire. And even then, I would argue that we can easily afford a generous welfare state with a small shift in priorities away from (globally destabilizing) defense spending to social productive spending on human development.
Obvious to who? America lavishes so much money on its military not only because of corruption, but also because it has the world reserve currency and is a guarantor of the safety of international shipping. These facts are inextricably linked to the America's status as the world hegemon. The empire provides order and structure, and enforces the extraction of resources from the periphery to the center. The bread and circuses are inextricably linked to the empire's military activities and trying to tease them apart will only lead to collapse of the entire system sooner than it will otherwise happen.
"Social Democratic"–now that's an interesting phrase. Did you know that Syria is a democracy, and was an extremely prosperous and well-education nation prior to 2011?
Here's a telling paragraph from the Wikipedia article about Syria:
[Dec 27, 2015] The Sneaky Way Austerity Got Sold to the Public Like Snake Oil
Notable quotes:
"... When children don't get good educations, the production of knowledge falls into private control. Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked in. ..."
"... Not only were the politicians worried about votes but also the welfare state was a way to head off a left wing revolution. ..."
"... the change began in 1976 with the election of Rockefeller-funded Jimmy Carter, who immediately launched an austerity program. Support for Keynesian economics was further eroded by the 70's stagflation which we now know was caused by Mid East oil but at the time the "left" were like deer in the headlights, with no clue what to do. ..."
"... The final nail in the coffin was the fall of the Berlin Wall and the collapse of the USSR, discrediting communism. After that, "there was no alternative" to corporate capitalism. Or more accurately, the left was slow to formulate an alternative and to this day is still struggling with an alternative as we have observed with Syriza. It's not enough to oppose austerity, you have to have a constructive plan to fix things. ..."
[Dec 24, 2015] The Fed Has Created A Monster And Just Made A Dangerous Mistake, Stephen Roach Warns
[Dec 24, 2015] Obama's foreign policy goals get a boost from plunging oil prices
Notable quotes:
"... At a time of tension for U.S. international relations, cheap oil has dovetailed with some of the Obama administration's foreign policy goals: pressuring Russian President Vladimir Putin, undermining the popularity of Venezuelan President Nicolás Maduro and tempering the prospects for Iranian oil revenue. At the same time, it is pouring cash into the hands of consumers, boosting tepid economic recoveries in Europe, Japan and the United States. ..."
[Dec 23, 2015] The Big Short Every American Should See This Movie
Notable quotes:
"... Enjoyed the movie, but in typical Hollywood fashion, the role of the Federal Reserve and government in pushing housing down to those unable to afford it was not even mentioned once. ..."
[Dec 23, 2015] The Neocons - Masters of Chaos
Notable quotes:
"... It's now clear that if Obama had ordered a major bombing campaign against Assad's military in early September 2013, he might have opened the gates of Damascus to a hellish victory by al-Qaeda-affiliated extremists or the even more brutal Islamic State, since these terrorist groups have emerged as the only effective fighters against Assad. ..."
"... By late September 2013, the disappointed neocons were acting out their anger by taking aim at Putin. They recognized that a particular vulnerability for the Russian president was Ukraine and the possibility that it could be pulled out of Russia's sphere of influence and into the West's orbit. ..."
"... But Gershman added that Ukraine was really only an interim step to an even bigger prize, the removal of the strong-willed and independent-minded Putin, who, Gershman added, "may find himself on the losing end not just in the near abroad [i.e. Ukraine] but within Russia itself." In other words, the new neocon hope was for "regime change" in Kiev and Moscow. [See Consortiumnews.com's " Neocons' Ukraine/Syria/Iran Gambit. "] ..."
"... Putin also had sidetracked that possible war with Iran by helping to forge an interim agreement constraining but not eliminating Iran's nuclear program. So, he became the latest target of neocon demonization, a process in which the New York Times and the Washington Post eagerly took the lead. ..."
"... As the political violence in Kiev escalated – with the uprising's muscle supplied by neo-Nazi militias from western Ukraine – neocons within the Obama administration discussed how to "midwife" a coup against Yanukovych. Central to this planning was Victoria Nuland, who had been promoted to assistant secretary of state for European affairs and was urging on the protesters, even passing out cookies to protesters at Kiev's Maidan square. ..."
"... When the coup went down on Feb. 22 – spearheaded by neo-Nazi militias who seized government buildings and forced Yanukovych and his officials to flee for their lives – the U.S. State Department quickly deemed the new regime "legitimate" and the mainstream U.S. media dutifully stepped up the demonization of Yanukovych and Putin. ..."
"... Although Putin's position had been in support of Ukraine's status quo – i.e., retaining the elected president and the country's constitutional process – the crisis was pitched to the American people as a case of "Russian aggression" with dire comparisons made between Putin and Hitler, especially after ethnic Russians in the east and south resisted the coup regime in Kiev and Crimea seceded to rejoin Russia. ..."
"... Pressured by the Obama administration, the EU agreed to sanction Russia for its "aggression," touching off a tit-for-tat trade war with Moscow which reduced Europe's sale of farming and manufacturing goods to Russia and threatened to disrupt Russia's natural gas supplies to Europe. ..."
"... While the most serious consequences were to Ukraine's economy which went into freefall because of the civil war, some of Europe's most endangered economies in the south also were hit hard by the lost trade with Russia. Europe began to stagger toward the third dip in a triple-dip recession with European markets experiencing major stock sell-offs. ..."
[Dec 21, 2015] Weak president, neoliberal Obama and housing bubble
Notable quotes:
"... The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculators expected returns. when this dynamic gets out of control, it is a bubble. ..."
"... That is exactly the point. Expected returns in stocks have nothing to do with earnings growth. http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2013/september/asset-price-bubbles-tomorrow-yesterday-never-today/ ..."
"... You think a rise in stock prices created by a fall in the cost of capital is a bubble. ..."
"... keeping the risk free rate at zero for 7 years is not a change in fundamentals. and if it is and it rises leading to a large fall in equity prices, you will be the first one crying uncle. so why put the economy through this? ..."
"... Rising stock prices allow corporations to raise debt, because the stock is put up as collateral. This makes funding easier, but it doesnt favor any particular purpose of the funding. It could be to buy back stock, for example. Said buy back can raise the stock price even more, which in turn can pay off the borrowing. Didnt cost a dime. ..."
"... It always seem to me that right wing economists credit businessmen with superhuman foresight and sophistication, except when it comes to the actions of the Fed and then something addles their brains and they become completely stupid. As I once put, it seems investors cant understand what the Fed is doing, even though they tell you. ..."
"... Thats it exactly. Markets are efficient, unless the government does anything, and then markets lose their minds and its the governments fault. ..."
"... Here is how they evaluate models: Good model; one that reaches the right good conclusions. Bad model; one that ends up saying stuff nobody should believe in. ..."
"... Obama could have at least made the investigations a high priority...but he let Holder, a Wall Street attorney, consign them to the lowest. ..."
"... Democrats filibuster-proof majority consisted of 58 Democrats and two independents who caucused with them. Only an inept President and Senate majority leader could have failed to take advantage of such a majority to implement significant parts of the party platform. ..."
"... Gullible folks like pgl and his coterie believe what these Democrats say and waste our time defending their neoliberal behavior. ..."
[Dec 21, 2015] Monetalism is dead but remains of monetarist thinking are still lingering
Notable quotes:
"... Summers is right that bubbles are usually accompanied by some kind of financial euphoria. ..."
"... There will be massive pushback because so many have wasted many years and resources building mathematically elegant but fatally flawed models that do not make accurate predictions on even represent the fundamentals of any economy. ..."
[Dec 20, 2015] Paul Krugman: The Big Short, Housing Bubbles and Retold Lies
Notable quotes:
"... I get the feeling that if doing a film review of The Force Awakens , most economists would be rooting for the Empire to win - after all the empire will bring free trade within its borders, like the EU. ..."
"... In market fundamentalist world, markets dont fail. They can only be failed. Though its still not clear how they think a little bit of government incentive for loans to low income borrowers caused the entire financial sector to lose its mind wrt CDOs. ..."
"... The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects. ..."
"... ....Supervising regulators need to look carefully at the ratio of credit used for financial trading compared to credit used for what weve called real-economy matters. They should adjust the level of monitoring based on this view while they also inform policy makers including those in the legislature. ..."
"... except that a significant chunk of institutional investors have sticky nominal targets for return thanks to the politics of return expectation setting (true for pension fund and endowments) -- low interest rates do encourage chasing phantoms or looking to extract some rents, for those subject to that kind of pressure ..."
"... The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculators expected returns. when this dynamic gets out of control, it is a bubble. ..."
"... Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made the investigation of mortgage securities fraud DOJs lowest priority. Krugmans Democratic proclivities prevent him from stating the obvious. ..."
"... Fact is, Obama has intentionally been a lame duck ever since he took office. He was even clueless on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which brings us to Trump. Many are so desperate for leadership after Obamas hollow presidency that theyll even support a racist demagogue to avoid another empty White House. ..."
"... Yes you are correct. From 2001 into 2008 when all of the liar and ninja loans were being made, not one government official stepped forward to investigate the possibility of fraud, the predatory lending, the misrepresentation of loans taking place, the loans with teaser rates which later ballooned, the packing of loans with deceptive fees, the illegal kick backs, etc. Not one. To make matters worst, the administration from 2001-2008 aligned itself with the banks along with the maestro hisself Greenspan. ..."
"... When state AGs took on the burden of investigating the flagrant violations, the administration moves to block them saying they had no jurisdiction to do so. It did this through the OCC issuing rules preventing the states from prosecuting the banks. Besides blocking any investigation, the OCC failed in its mission to audit the banks for which it was by law to do. ..."
[Dec 19, 2015] The Enduring Relevance of "Manias, Panics, and Crashes"
Notable quotes:
"... Manias, Panics, and Crashes ..."
"... The New International Money Game ..."
"... Manias, Panics and Crashes ..."
"... Why Minsky Matters ..."
"... Manias, Panics and Crashes ..."
"... Manias, Panics and Crashes ..."
[Dec 19, 2015] The Washington Post's Non-Political Fed Looks a Lot Like Wall Street's Fed
Notable quotes:
"... Any serious discussion of Fed policy would note that the banking industry appears to have a grossly disproportionate say in the country's monetary policy. ..."
[Dec 18, 2015] The Upward Redistribution of Income: Are Rents the Story?
Looks like growth of financial sector represents direct threat to the society
Notable quotes:
"... Perhaps the financialization of the economy and rising inequality leads to a corruption of the political process which leads to monetary, currency and fiscal policy such that labor markets are loose and inflation is low. ..."
"... Growth of the non-financial-sector == growth in productivity ..."
"... In complex subject matters, even the most competent person joining a company has to become familiar with the details of the products, the industry niche, the processes and professional/personal relationships in the company or industry, etc. All these are not really teachable and require between months and years in the job. This represents a significant sunk cost. Sometimes (actually rather often) experience within the niche/industry is in a degree portable between companies, but some company still had to employ enough people to build this experience, and it cannot be readily bought by bringing in however competent freshers. ..."
[Dec 18, 2015] How low can oil prices go? Opec and El Niño take a bite out of crudes cost
Oil is a valuable chemical resource that is now wasted because of low prices... "The obvious follow-up question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion to continue? An exercise for readers."
Notable quotes:
"... Iran wont flood the market in 2016. Right now Iran is losing production. It takes time to reverse decline and make a difference. ..."
"... Those who predict very low prices dont understand the industry (I do). The low price environment reduces capital investment, which has to be there just to keep production flat (the decline is 3 to 5 million barrels of oil per day per year). At this time capacity is dropping everywhere except for a few select countries. The USA is losing capacity, and will never again reach this years peak unless prices double. Other countries are hopeless. From Norway to Indonesia to Colombia to Nigeria and Azerbaijan, peak oil has already taken place. ..."
"... If oil prices remain very low until 2025 itll either be because you are right or because the world went to hell. ..."
"... But Im with Carambaman - prices will go up again. Demand is and will still be there. The excess output will eventually end, and the prices stabilises. And then move up again. ..."
"... Time to examine the real question: how long can the Saudis maintain their current production rates? Theyre currently producing more than 10 Mbarrels/day, but lets take the latter figure as a lower bound. They apparently have (per US consulate via WikiLeaks--time for a followup?) at least 260 Gbarrels (though it seems no one outside Saudi really knows). You do the math: 260 Gbarrels / (10 Mbarrels/day) = 26 kdays ~= 70 years. @ 15 Mbarrels/day - 47.5 years. @ 20 Mbarrels/day - 35 years. ..."
"... The obvious follow-up question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion to continue? An exercise for readers. ..."
"... Saudi Arabia, a US ally, using oil production and pricing to crush US oil shale industry? Did I read that correctly? ..."
"... Yeah, but I suspect it was *written* incorrectly. Im betting the Saudis real target is the Russians. ..."
"... In 1975 dollars, thats $8.31 / bbl (with a cumulative inflation factor of 342% over 40 years), or $.45 / gal for gas (assuming a current price of $2.00 / gal). ..."
"... I spent 30 years in the oil industry and experienced many cycles. When it is up people cannot believe it will go down and when it is down people cannot believe it will go up. It is all a matter of time ..."
[Dec 17, 2015] The Putin-Did-It Conspiracy Theory
Notable quotes:
"... It was German Chancellor Angela Merkel, not Vladimir Putin, who pushed the EU agreement and miscalculated the consequences, as the German newsmagazine Der Spiegel has reported . Putin's only role in that time frame was to offer a more generous $15 billion aid package to Ukraine, not exactly a war-like act. ..."
[Dec 17, 2015] Neocon Influence on Angela Merkel
[Dec 17, 2015] Why Merkel betrays Europe and Germany
Note that the quality of translation from German of this article is low.
Notable quotes:
"... Frankfurter Allgemeine Zeitung ..."
"... Bild and Die Welt ..."
"... In 2003, Chancellor Gerhard Schröder opposed the Anglo-American intervention in Ira q. Angela Merkel then published a courageous article in the Washington Post ..."
"... As Stanley Payne, the famous American historian said about Spain (or any western democracy) that now politicians are not elected but chosen by apparatus, agencies and visible hands of the markets ..."
"... Merkel is publicly supported by Friede Springer , widow of West German press baron, Axel Springer , whos publishing conglomerate, the Springer Group secretly received around $7 million from the CIA in the early 1950s. ..."
"... She is counseled by Jeffrey Gedmin. Gedmin is a regular columnist in Die Welt , a publication of the Springer Group. After becoming administrator of the Council of the Community of Democracies and director of the Aspen Institute in Berlin in 2001, Gedmin devoted himself exclusively to Merkel . Gedmin was too involved in the infamous Project for a New American Century (PNAC) and wrote the chapter on Europe in the neocon programme. He argued that the European Union should remain under NATO authority and that this would only be possible by discouraging European calls for emancipation . ..."
"... In a few years, Merkel has destroyed European solidarity, annihilated the German nuclear power plants (an old American obsession too), impoverished Germans and their once efficient Rheinisch and solitary economy, backed the mad dog American diplomacy and created along with an irresponsible American administration (irresponsible because America will never win this kind of conflict) a dangerous crisis against Russia than can end on a war or a scandalous European partition. ..."
[Dec 13, 2015] Deregulation of exotic financial instruments like derivatives and credit-default swaps and corruption of Congress and government
Notable quotes:
"... Can you list all of the pro- or anti- Wall Street reforms and actions Bill Clinton performed as President including nominating Alan Greenspan as head regulator? Cutting the capital gains tax? Are you aware of Greenspans record? ..."
"... Its actually pro-neoliberalism crowd vs anti-neoliberalism crowd. In no way anti-neoliberalism commenters here view this is a character melodrama, although psychologically Hillary probably does has certain problems as her reaction to the death of Gadhafi attests. The key problem with anti-neoliberalism crowd is the question What is a realistic alternative? Thats where differences and policy debate starts. ..."
"... Events do not occur in isolation. GLBA increased TBTF in AIG and Citi. TBTF forced TARP. GLBA greased the skids for CFMA. Democrats gained majority, but not filibuster proof, caught between Iraq and a hard place following their votes for TARP and a broader understanding of their participation in the unanimous consent passage of the CFMA, over objection by Senators James Inhofe (R-OK) and Paul Wellstone (D-MN). ..."
"... It certainly fits the kind of herd mentality that I always saw in corporate Amerika until I retired. The William Greider article posted by RGC was very consistent in its account by John Reed with the details of one or two books written about AIG back in 2009 or so. I dont have time to hunt them up now. Besides, no one would read them anyway. ..."
"... GS was one of several actions taken by the New Deal. That it wasnt sufficient by itself doesnt equate to it wasnt beneficial. ..."
"... "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," said then-Treasury Secretary Lawrence Summers. "This historic legislation will better enable American companies to compete in the new economy." ..."
"... The repeal of Glass Steagal was a landmark victory in deregulation that greased the skids for the passage of CFMA once Democrats had been further demoralized by the SCOTUS decision on Bush-v-Gore. The first vote on GLBA was split along party lines, but passed because Republicans had majority and Clinton was willing to sign which was clear from the waiver that had been granted to illegal Citi merger with Travelers. Both Citi and AIG mergers contributed to too big to fail. The CFMA was the nail in the coffin that probably would have never gotten off the ground if Democrats had held the line on the GLBA. Glass-Steagal was insufficient as a regulatory system to prevent the 2008 mortgage crisis, but it was giant as an icon of New Deal financial system reform. Its loss institutionalized too big to fail ..."
"... Gramm Leach Biley was a mistake. But it was not the only failure of US regulatory policies towards financial institutions nor the most important. ..."
"... It was more symbolic caving in on financial regulation than a specific technical failure except for making too big to fail worse at Citi and AIG. It marked a sea change of thinking about financial regulation. Nothing mattered any more, including the CFMA just a little over one year later. Deregulation of derivatives trading mandated by the CFMA was a colossal failure and it is not bizarre to believe that GLBA precipitated the consensus on financial deregulation enough that after the demoralizing defeat of Democrats in Bush-v-Gore then there was no New Deal spirit of financial regulation left. Social development is not just a series of unconnected events. It is carried on a tide of change. A falling tide grounds all boats. ..."
"... We had a financial dereg craze back in the late 1970s and early 1980s which led to the S L disaster. One would have thought we would have learned from that. But then came the dereg craziness 20 years later. And this disaster was much worse. ..."
"... This brings us to Lawrence Summers, the former Treasury Secretary of the United States and at the time right hand man to then Treasury Security Robert Rubin. Mr. Summers was widely credited with implementation of the aggressive tactics used to remove Ms. Born from her office, tactics that multiple sources describe as showing an old world bias against women piercing the glass ceiling. ..."
"... According to numerous published reports, Mr. Summers was involved in. silencing those who questioned the opaque derivative product's design. ..."
"... The Tax Policy Center estimated that a 0.1 percent tax on stock trades, scaled with lower taxes on other assets, would raise $50 billion a year in tax revenue. The implied reduction in trading revenue was even larger. Senator Sanders has proposed a tax of 0.5 percent on equities (also with a scaled tax on other assets). This would lead to an even larger reduction in revenue for the financial industry. ..."
"... Great to see Bakers acknowledgement that an updated Glass-Steagall is just one component of the progressive wings plan to rein in Wall Street, not the sum total of it. Besides, if Wall Street types dont think restoring Glass-Steagall will have any meaningful effects, why do they expend so much energy to disparage it? Methinks they doth protest too much. ..."
"... Yes thats a good way to look it. Wall Street gave the Democrats and Clinton a lot of campaign cash so that they would dismantle Glass-Steagall. ..."
"... Slippery slope. Ya gotta find me a business of any type that does not protest any kind of regulation on their business. ..."
"... Yeah, but usually because of all the bad things they say will happen because of the regulation. The question is, what do they think of Clintons plan? Ive heard surprisingly little about that, and what I have heard is along these lines: http://money.cnn.com/2015/10/08/investing/hillary-clinton-wall-street-plan/ ..."
"... Hillary Clinton unveiled her big plan to curb the worst of Wall Streets excesses on Thursday. The reaction from the banking community was a shrug, if not relief. ..."
"... Iceland's government is considering a revolutionary monetary proposal – removing the power of commercial banks to create money and handing it to the central bank. The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled "A better monetary system for Iceland". ..."
[Aug 28, 2012] Chris Hedges on 'Empire of Illusion' and a Vignette of The Fall of Berlin 1945
This is an almost perfect illustration of the credibility trap. One cannot allow the illusion to falter, even a little, to the bitter end. And as the fraud fades, the force intensifies, becoming almost rabid in its deflection. Because that illusion has become the center of a hollowed people's being, their raison d'être, a mythological justification for their existence.
[Aug 25, 2012] Matt Taibbi and Eliot Spitzer Discuss Eric Holder's (and Obama's) Failure: Credibility Trap
A credibility trap is a situation in which the regulatory, political and/or the informational functions of a society have been thoroughly taken in by a corrupting influence and a fraud, so that one cannot address the situation without implicating, at least incidentally, a broad swath of the power structure and the status quo who at least tolerated it, if not profited directly from it, and most likely continue to do so.
Crisis of confidence is widespread by Mark S. Mellman
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As McKinnon shows, that myth is shaped by neo-liberal economic values and relies on ethnocentric understandings of sex, gender, kinship, and social relations.pdfsr.com/isbn/9780976147527
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Neo-liberal Genetics: The Myths and Moral Tales of Evolutionary Psychology by Susan Mckinnon, Susan Mac Kinnon Paperback, 184 Pages, Published 2006:gettextbooks.com/isbn/9780976147527/
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