Wednesday, November 26, 2008
Tuesday, November 25, 2008
"It's people. Soylent Green is made out of people. They're making our food out of people."
- "Soylent Green" (Richard Fleischer, 1973)
For as long as there have been bailouts, people have known that bailouts suck. The rich play, we pay. "Privatized profit, socialized risk," it's called. Now, with more bailout requests in the pipeline and the President-Elect promising the mother of all stimuli, critics are girding for battle - and rightly so - but let's not throw the baby out with the bathwater.
The bailouts have many critics on the left - not just the nutcases on the right who still believe in "free enterprise" - but some are seeming more insightful than others. US Sen. Bernie Sanders says if a corporation is "too big to fail," it's "too big to exist." He says the government should break them up. Sanders also says, "let the rich bail out the rich" by paying a surcharge on income over $1 million to cover the costs. Jobs With Justice, ACORN and others in the grassroots left are calling for a "People's Bail-Out." All good ideas. Then there's my personal broken record: a comprehensive Social Monetary Fund to restructure the whole ball of wax.
But some of our friends, in their haste to fund "green infrastructure," sometimes forget who the effort is for.
Reede Stockton of Global Exchange, writes in an article on Common Dreams
To be fair, the public investment in infrastructure
But if the government decided to now turn its back and let an integral part of the economy collapse, millions of people fall into the dustbin of redundancy, buildings and machines tossed in the landfill or left to obstruct new development, that would be recklessly destructive. And it would gain the "new green economy" a generation of enemies that could have been allies. Why throw away the product of a hundred years of public subsidy and entrepreneurial ingenuity (albeit not "free")? The car industry could help, with the proper realistic incentives.
If we can put a man on the moon - if we can put an intelligent, well-spoken man in the White House (a black man no less, whose middle name is Hussein) - we can do this.
Piven's Regulating the Poor is an absolute epiphany. But you can read Poor People's Movements for a broader vision of Piven's and political scientist Richard A Cloward's rare method. Why American's Don't Vote and Why Americans Still Don't Vote are now slightly dated in terms of some of the voting obstacles they discuss, but the history is instructive, and in fact most of what they write about is timely. I was lucky enough to interview Piven a couple years ago:
Her analysis expressed in that conversation is also still instructive.
Sunday, November 23, 2008
WRONG! The "downturn" - economists sometimes call it a "correction" (or a "major correction") - is the best reason that's come along in a long time to increase taxes on the rich. In the immortal words of the esteemed Senator from Vermont: "Let the rich bail out the rich!"
Sanders's 10% on incomes over a million ($500,00 for individuals) won't be enough, but he's on the right track.
It is true, I have to admit, that income tax is not the best way to do it, not even a progressive income tax, which we barely still have. (The Bushies lowered the top bracket from 39% to 35% - a long drop from the 77% I recall from my pre-Reagan youth, as if in a dream.) A wealth tax would be better, according to the really smart people. In other words, we ought to tax what we don't want, not what we do. That is, we want production, not speculation, etc.
But in the short run, income tax is what we've got. Somebody has to pay, not just for the bailouts, but for all this stimulus ... and those of who are losing income, prospects, and so on, should not be the ones, nor should our children.
My point? Obama's apparently feeling a lot of pressure from the Dark Side - let's give him some from our side!
Friday, November 21, 2008
According to NIC Chairman Thomas Finger, this year's Global Trend Report predicts that in 2025 the US will no longer sit atop the world, and "state capitalism of the kind they have in Russia and China will be ascendant." This is like the polar opposite of the report they turned in last time around.
The so-called "Western model," they now say, hasn't worked out so well for most of the world. Imagine that!
Now, after we all say, "I told you so" (1-2-3 ... "I told you so!"), let's all say the next part again: Social Monetary Fund.
Course there's always the prison call center model.
Thursday, November 20, 2008
Maybe it’s the whole economy that was structured by cows. The focus has been Wall Street, and there’s plenty of craziness there to focus on. People buy and sell hogs that aren’t born yet, fer chrissakes! Crops that haven’t grown yet, all kinds of insanity. They take bets – essentially bets – on which loans will go bad, and so on. It’s nuts, and that’s even with regulation. Without regulation it gets downright bestial.
But it’s obviously much more than Wall Street.
There’s been a lot of talk about debt – private debt, public debt – and how it’s been ballooning for 30 years. It was already considered problematic when Reagan, the balance-the-budget president, jacked the federal deficit to record levels. And as we all know, Bush had to pull out all the stops. Jack Rasmus (Z, Nov. 08) has a very thorough rundown of
Credit card and mortgage companies are now pushing new debt with ads that center around the bailouts!
Yesterday the Senate killed the vote on the auto bailout - playing 'chicken' with maybe 2 million jobs, and possible economic depression - but they keep talking about this the wrong way. It isn't clear at all to the American people why these humongous companies are in debt in the first place. It isn't just because sales have been declining. And it isn't really, except just in the immediate, because of the Wall Street crunch. Why would that bother big manufacturers? Don’t they have money? Or if they don’t, why didn’t they realize it before now?
It’s the way they run their businesses, by trading on their status - in a way that small businesses can never do, so really on their size. (Similar, you have to admit, to the way the big financial institutions were running: these are not bad loans, not irresponsible reckless screwball cowboy ventures, we wouldn’t risk our business that way, we’re big and well respected!)
Turns out, really big businesses don’t run the show on the money they take in, or on their savings or cash reserves, or even on loans that they plan for and include in annual or even monthly budgets. It’s more proof, in case we needed it, that capitalism doesn’t actually work, at least not without passing a giant collection plate around the plebes, sometimes (and always at least indirectly) at the point of a gun – serfs, Native Americans, African slaves, taxpayers, somebody has to prop up this façade at all times.
The dirty secret is, the Captains of Industry keep their show on the road by borrowing money, tens of millions, on a near-daily basis, and pay it back almost daily, too, usually. Your typical manufacturing giant or other towering edifice of capitalist potency will have, secreted away in the bowels of the organism, a small office that swings into action at the end of every business day, or at some point near the end. The function of this office is to check the daily balance – take versus layout – and if there’s a shortfall, borrow, say, $10 million or so, over the phone, just to tide the big boss over until tomorrow. Or, on days when there’s a surplus, pay it out.
There was a recent episode of “This American Life” that told the story, and jaws hit the ground in kitchens and living rooms all over
For some like GM the unwinding is happening so fast, they may code by the new year or soon after, taking 2 million or so jobs with them (in addition to the million-plus already down the crapper this year). That’s a lot like a depression, folks.
Talk about a house of cards.
But it’s an inescapable fact, it seems to me, that the kind of free money the carmakers are or were hoping for, sans fundamental restructuring, is just feeding the bad wolf. It wouldn’t even seem to delay the inevitable very long, maybe just long enough for stockholders to pull out but probably not long enough for 10-plus year employees to find another home, especially not nowadays. So the “free” marketeers don’t like it because it enables bad practice. But there’s a good reason for social progressives not to like it either: we could wind up paying them to kick people out of work.
And I know I’ve said it before, but we need to pay them to put people back to work. We need the opposite of an IMF, something like a Social Monetary Fund, and it needs to be one with a vision beyond the WPA or CCC. It needs to encourage investment in what economists might call “externalities”: infrastructure needs; gainful employment, yes, but also alternatives – a kind of social diversification – renewable energy, public transportation, etc.; we need to encourage freight to move by rail, not over public roads; so many things.
Now, GM can’t do that alone, no matter how much we lend them. But that’s where the Fund’s management comes in, a sort of coordinating function – “planning” you might call it. GM, for example, gets a bailout and it required to participate in restructuring, not just internal restructuring but external restructuring, of the whole economic mess.
It doesn’t have to be structured by cows. We are smarter than cows, in theory. The economy can be structured by people. It is anyway, just not by the right people, and not by enough people.
Wednesday, November 19, 2008
NPR is repeating today that the Indian Navy has claimed victory in a reported “sea battle” with Somali pirates and even sank one of the pirates’ “mother ships.” A US Naval College professor interviewed this morning told Robert Siegel that piracy had now become a major threat to the world’s energy resources!
Presumably the professor was referring specifically to sea piracy – he didn’t mention the big corporate land pirates – and in fact the interview never brought up any pirates other than Somali ones. They discussed some Saudi tankers recently seized or threatened by the former Somali fishermen. Again, the context was decidedly not the right of the inhabitants to control or benefit from the resources of their lands – we’re against that, aren’t we? – but the threat to rich (white) people’s profits derived from said resources.
Here’s a more informed take (thanks to my friend Bob Naiman):
Reminds me of a story that Noam Chomsky attributes to
But the Horn of Africa is one of those regions where
Who knows? It’s always hard to predict what new schemes will erupt from the fevered brains in
Government officials can plant or encourage such attention , and so do think tanks and influence hopefuls like the Council on Foreign Policy and the notorious Neocon Richard Perle (before he was in, then out). These guys always have plans, like the ones Bush & Co. reached for in Fall 2001, and they know how to prime the public to accept them – or at least, how to prime the media to understand them. It’s a subtler form of PR, available only to the big boys with enough pull in the press pool.
Stories of German soldiers tossing babies up and catching them on bayonets in the leadup to World War I are classic examples, of course, with precedents dating back centuries. The fake incubator story, in which Kuwaiti babies were supposedly left to die in an Iraqi-occupied hospital (ca. 1991), and of course the infamous “weapons of mass destruction,” are just the recent most familiar. Somewhat more neglected examples include the Taliban destruction of ancient Buddhist statues: disgusting, but would we have cared before they started giving us trouble about the pipeline we wanted to build through their country and a spinoff of our CIA-trained mujahadeen set up shop in their backyard? And what about Kosovo? Hook, line and sinker.
Manuel Noriega got a lot of media attention once, between gigs as CIA ally and US jailbird, just before his former patron state announced that he had declared war on the US (he hadn’t, although the major US media went along with the gag) and illegally invaded and occupied Panama. The Canal Zone, on the eve of returning to Panamanian control about 100 years after the
Noriega had naturally been very little in the news during his days on the CIA payroll. When his predecessor’s plane mysteriously went down in the mountains and Noriega stepped onto the presidential balcony, everything was fine. It was when he got the idea that he might have graduated from
All of sudden, he was a dictator who had come to power under suspicious circumstances. (We had no idea!) And that idiot Carter had agreed to let Our Canal revert to these savages? A crazy “Pineapple Head” like Noriega could interfere with US ‘interests’, like, when we seriously need to cream some foreigners and our ships can’t get through Our Canal (that *we* built, duh!), or when a shipload of Christmas presents needs to get through to the West Coast... Oh, and he’s “involved” in th einternational drug trade, like Castro and everybody else we hate (the Taliban will be, later).
But the straw that broke the camel’s back: Panamanian police had the nerve to pull over a US Army vehicle, just because a few of the soldiers were drinking and firing their weapons into the air around Panama City – and one of the dirty guards Panamanian, obviously a pawn of Noriega and probably “involved” in the international drug trade (our babies!) himself, even forgot his station and *insulted* the wife of an American officer! Bomb them! Smash them! Obliterate them! Raze the place to the ground!
It was really just icing on the cake when Old Pineapple Head, using the specious excuse of
Tuesday, November 18, 2008
I’ve just been reading Harper’s Magazine –which I don’t usually do. But this month there are a number of articles on “How to Save Capitalism” – which I don’t normally advocate, either. But it seemed pertinent, and there are quite a few interesting ideas.
Joseph Stiglitz (“The Three Trillion Dollar War”), who I think some of our friends were praying would be Obama’s Treasury Secretary, has an almost impenetrable article on Wall Street and tulip mania in the 1600s – arguing that the long-neglected purpose of financial institutions is to *manage* risk, not just auction it off for fun and profit. That sounds hard to argue with. He has ideas about fixing this, like requiring the troublemakers to invest their own money with ours, but he doesn’t seem to me to get at the larger picture we’re grappling with at the moment.
(From the revised job loss figures for late summer (even more people kicked out of work even before this fall than they told us, which was already a lot), as if we didn’t already know it, that the recession was locked in well before the Fannie & Freddie extravanganza. Well over a million jobs lost this year – job losses may hit 300,000 a month by the end of December. Merry Christmas!)
Similarly Barry Lynn (“The Rise and Coming Fall of Global Capitalism”), who advocates abolishing stock options or at least reforming them so that corporate managers don’t get quite so much encouragement for short-term profits while if not giving away then selling (low) the proverbial store (e.g. GE CEO proposal to sell off their R&D! That must be right up there with a passenger on the Titanic selling his spot on a lifeboat?) Again, I think he makes a good case for the reform he’s advocating – it just doesn’t seem like enough.
And, Elizabeth Warren and Amelia Warren Tyagi (“The Two-Income Trap”) suggest something like a Consumer Product Safety Commission for financial ‘products’ – a “Financial Product Safety Commission” – to detoxify the financial environment. Probably a great idea, but the most interesting part to me was their story that “each year millions of credit-card offers go out with tiny print detailing ‘double-cycle billing’ and ‘trailing interest,’ terms which have enormous financial implications but are meaningless to most people.” Include me. What the hell?
Then they get more radical.
Michael Hudson (“Super Imperialism”) – after a short history of the rise and untimely demise of the progressive income tax – says tax the land. He says tax breaks on property and capital gains, plus tax deductions for mortgage interest amount to “powerful incentives for buyers to go into debt.” He says we should be taxing the privilege of owning land, not socially useful activities like producing and earning money. Especially, he says, tax “’unproductive’ incomes” like hereditary estates and monopolies – e.g. currently privatized natural resources, public airwaves, etc.
At first I thought, wait a minute! No tax deductions for mortgage interest? What will we struggling homeowners do? Then I remembered: those of us who are struggling don’t actually earn enough to itemize deductions anyway. Not sure how this ‘tax the airwaves’ idea would affect small operations like WEFT and WRFU, etc. but I’m sure there’s a way to tweak it. The solution might be as simple as a kind of standard deduction that effectively exempts small operations. Same could work for the land tax, really, when it comes to lower-middle-income folks trying to buy their first house … not their first *ten*, of course. (Can you really live in ten houses?)
James Galbraith (“The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should, Too”) jut comes right out and says we should “plan.” Dude!
No kidding, Galbraith is pointing out once again that the myth of ‘free enterprise’ is just that. It doesn’t exist. The trick is to acknowledge, I think he means officially, that the government always has and of necessity must and should intervene to manage and shape the direction of the economy. It isn’t clear to me exactly how he thinks we should do this, except that he says his idea “is not coercive” but based on budget priorities and such – to encourage the *kinds* of development we want. Clearly, I think, he’s right.
He seems a little short on what exactly those kinds of development are, too, but he mentions one example: a Federal Department of Energy and Climate, which would be “independent” of lobbyists and other evildoers – even Congress – (how?) and (miraculously) free to evaluate new ideas for renewable energy, etc. Our local experience, which may or may not be a useful guide, I think is that the ‘independence’ part is a humongous ‘if.’ To the extent to which city planners around here have been ‘independent’ of elected officials it seems to me they have been ‘independent’ of social considerations, even more than the elected officials: they just listened to developers and trusted their business school training. To the extent to which the planners have been ‘dependent’, well, it has depended on who was in office and what their (election-dependent) priorities were. I just don’t see it working this way.
Galbraith may have some great ideas, and he’s certainly right on about the faith-based nature of “free enterprise”. But it seems to me he’s trying to take a shortcut around the truly back-breaking work of this thing: the organizing, the building of public or cultural or national will, the social will, the social demand for radical changes like these. Maybe it’s because in the process a lot of good ideas will be shitcanned because the huddled masses don’t get them – in favor of gettig paid now. But that is the uphill battle. The biggest public relations industry in human history is against us, not to mention the monopolies on resources and organized violence currently aligned (maybe a little more loosely since last month) with property interests and so on. Tough question, but we can’t just skip it, IMO.
Finally, Eric Janzen (pres., iTulip Inc.) and Bill McKibben (“The End of Nature”) have I think related but different suggestions all to do with what kinds of development we want to foster. Janzen says we have to “reindustrialize”: and he’s talking innovative startups, publicly encouraged. McKibben says “localize”: farmer’s markets and other smaller, more localized economic developments make more sense (as we run out of oil, he says – not so sure that we are any time soon, but) and are much more deserving of public investment – *social* investment again – that ADM and the oil industry & co.
Janzen presents a more destructive version of a similar notion, in my view, advocating that we allow the financial and insurance sector, and the 4-million-job
I think that’s an even steeper ramp down to economic (and medical) depression, myself. You have to remember why we bother to discuss this at all. It’s not a board game. It’s people’s lives. And we don’t want to destroy this village in order to save it.
But in the long run I think Janzen’s got something there: he says in essence that our economy needs to be based on producing things and not just on insuring things that other people make and lending money to buy things that other people make, and then gambling on who will lose the most money when it all comes crashing down. Hm, you think?
He has a zillion ideas for startup businesses – that’s what he *does* – and the model is “public-private partnerships” (i.e. joint ownership). I’m skeptical of this on the scale and with the suddenness he seems to be proposing, at least in the contemporary capitalist context; seems like a tender box. I see armies of scam artists swarming to make living while the tourists wander the burning cities in a daze. But I think we can begin to reorganize our society along lines that are at least informed by these sorts of ideas.
McKibben, for example, addresses the human cost of some of these proposed changes. We don’t want to “beggar the populace,” he says. He’s a little slim on the specifics, but he says there are all sorts of schemes for rebates and discounts and things to ease the burden of yanking the carpet out from under tens of millions of individuals and families. They’d better be damn good ones, is all I can say. I like a lot of these ideas, but we must keep perspective. The biggest problem with the solutions we keep seeing come out of
We must be the nagging reminders.
Friday, November 14, 2008
Still need to hear more about what "viability" means - the looking out for Number One sense, or the we all exist as members of a society sense - and to get the damn thing passed - without giving away the store!
Thursday, November 13, 2008
True, if even one of the Three go down the ripple effect could be deadly. Overall wages, benefits, and possibly working conditions could be dragged into the sinkhole. But what keeps getting lost in these rushes to bailout the big boys is what the taxpayer (or the folks who are too poor to pay taxes) get out of it.
In the bank bailout, the US decided to buy up stock, in the end, but non-voting stock (not like the UK). And no new regulations in the deal. Not good enough. For the kind of money we are shelling out, we need a say in how these companies decide to blow it all.
Same goes for the car industry. The bailout needs to have a price, a real price,a useful price. At a minimum, the deal needs to be linked to this policy both parties supposedly have called "reducing our dependence on foreign oil," or some such. The Big Three have played a very nasty game in this respect, aided by the Republicans - and "Who Killed the Electric Car" went way too easy on them. If we bail them out this time, we need some signatures on some dotted lines about affordable electric cars, hybrids, something.
But that won't help most people, who can't afford a new car no matter what it runs on. Poor folks in this country need to get to work, or at least to get in to look for work. And the history of car-making companies blocking public transportation could provide a clue to how the Big Three ought to be helping: put it in reverse.
As late as this summer the Three were focussed on luring people away from public transportation, instead of investing in it. This situation is untenable, and backasswards. What the government needs to do, if it has to bail out these big boys, is use it as leverage. Test the urgency. We need to get the Big Three working on our agenda if they are going to be working with our money.