Today's Week in Review features essays by Volker, Friedman, and Rich. They are all required reading. What they miss, individually and in toto, is the essence (not of Emeril). The playing field has been tilting regressively worse since Reagan.
C-SPAN has been rerunning an interview with the authors of "The Forty Years War: The Rise and Fall of the Neocons, from Nixon to Obama", Len Colodny and Tom Shachtman. I haven't read the book, but their presentation, along with the Q&A, demonstrates an understanding of the rise of right wing divisiveness to the body politic.
Taken as a whole, the op-eds and the book describe how it is that the playing field has become so tilted toward the top 1%. What none does is offer up a proposal for an answer. Herewith a Modest Proposal.
We need to start with the obvious cause of recessions and depressions, the lack of purchasing power in the hands of the majority. It is not a coincidence that recessions and depressions follow from periods of income concentration. Obama has to find the stones to make this obvious fact obvious to under-educated classes (I saw recently that Obama's highest approval was, in the words of the article, among the "over-educated", as if there really is such a thing).
The root cause of any economic calamity is a twisting of incentives from doing productive work to doing non-productive work (well, then it really isn't work, now is it). As I have mentioned a few times during the course of this endeavor, I first became aware of incentive twisting while building my senior thesis on Uruguay, way back in 1971. The Right Wingnuts have twisted the incentives toward simply "making money"; banking, financial services, and the like. It is no wonder that they now rail against any hint of "inflation", since in a fundamental economy, money has no intrinsic worth; it is merely a conduit for barter of real goods and services. In 2007, 40% of corporate profit was from financial services, not production of physical goods. Put another way, these corporations wouldn't exist in a real economy.
Let's start by *increasing* the capital gains tax. Since capital gains are purely financial, not productive, the incentive to put fiduciary capital into CDOs and other instruments decreases relative to real investment in plant and equipment. Let's go further and raise the tax rate on foreign produced goods sold by corporations in the USofA.
Let's, in general, tilt the playing field away from money manipulations to production of real goods and services. We will, thereby, re-create a middle class which not only takes most of the national income, but also produces and consumes what is produced. Recessions and depressions happen when aggregate demand drops below aggregate production, and that happens when those that work don't earn enough to buy that which is produced. In our time, the situation is worse in that much of what we "produce" has no intrinsic value, only some monetary number. Those that "produce" these services have a strong vested interest in preserving the status quo: the harried cry of "inflation is coming, inflation is coming". Japan has been through, is currently re-visiting just such a deflationary spiral, and for the same reason, the placating of its 1%.
31 January 2010
28 January 2010
The State of the Union: doo dah, doo dah
I didn't bother to watch the Black Face Minstrel last night. Watching Serena waste that Chinese girl was much more fun. Herewith the true State of the Union. And it won't take 70 minutes of babbling.
My fellow 99% of Americans. I speak to you tonight with a heavy heart. I have spent the first year of my presidency hiding behind the rhetoric of bipartisanship, which I have always known was a fantasy. It was a helpful fantasy during the election, in that it allowed me to sound inclusive, as if inclusiveness were important. It is not, and the Republicans have practiced divisiveness since 1968. Yes, 1968, the year that Nixon and his handlers invented the Southern Strategy.
The Southern Strategy exploited reactionary white folks in the South, West, and incrementally, suburbia. The Southern Strategy had its roots in the both civil rights law and voting rights law under Johnson. It turned out that lots of white folks, and not just the Southern ones, weren't all that inclined to play on a level field with Darkies. The Right Wing, using sometimes subtle rhetoric, concluded that it could take over the country (and re-make it in the image of Mississippi) by goading angry white folks with inflammatory sloganeering. And it worked. Starting with Reagan through George Bush the Second, there are 28 years. In that time, 22 years were marked by the Republicans controlling two or three out of three of the branches of government.
When Reagan took office, 1% of Americans took 8% of our national income. As Bush the Second left, that 1% took 24%, and the economy was in cardiac arrest. The economy and our society will not recover until that 1% relinquishes a large measure of its ill gotten gains.
This will be my mission for the remaining three years of this term, and the following four years of my second term. I entered the White House with American society closer to that of a Banana Republic than at any time in our country's history. I will work to reverse this fatal trend. We cannot have an economic recovery if the 99% have no income to buy the goods and services we can produce.
The first step in this job will be to restore the progressive tax structure of President Eisenhower. We will then dis-incentivize American corporations from outsourcing jobs to autocratic countries and nominally democratic countries which deny rights to workers through the tax code.
We will roll back the reactionary Supreme Court decision allowing corporations to buy elections. This will be difficult, but corporations are not individuals, and cannot be permitted to have the luxury of protection as individuals, all the while escaping the responsibilities. The tea bag movement claims to be grass roots. Grass roots means fighting corporate power. The Republicans made law, and repealed law, to enable further corporate control of our country. Government protection of corporations against the people is fascism. This country has been creeping toward fascism since Nixon, and it stops here and now.
My fellow 99% of Americans. I speak to you tonight with a heavy heart. I have spent the first year of my presidency hiding behind the rhetoric of bipartisanship, which I have always known was a fantasy. It was a helpful fantasy during the election, in that it allowed me to sound inclusive, as if inclusiveness were important. It is not, and the Republicans have practiced divisiveness since 1968. Yes, 1968, the year that Nixon and his handlers invented the Southern Strategy.
The Southern Strategy exploited reactionary white folks in the South, West, and incrementally, suburbia. The Southern Strategy had its roots in the both civil rights law and voting rights law under Johnson. It turned out that lots of white folks, and not just the Southern ones, weren't all that inclined to play on a level field with Darkies. The Right Wing, using sometimes subtle rhetoric, concluded that it could take over the country (and re-make it in the image of Mississippi) by goading angry white folks with inflammatory sloganeering. And it worked. Starting with Reagan through George Bush the Second, there are 28 years. In that time, 22 years were marked by the Republicans controlling two or three out of three of the branches of government.
When Reagan took office, 1% of Americans took 8% of our national income. As Bush the Second left, that 1% took 24%, and the economy was in cardiac arrest. The economy and our society will not recover until that 1% relinquishes a large measure of its ill gotten gains.
This will be my mission for the remaining three years of this term, and the following four years of my second term. I entered the White House with American society closer to that of a Banana Republic than at any time in our country's history. I will work to reverse this fatal trend. We cannot have an economic recovery if the 99% have no income to buy the goods and services we can produce.
The first step in this job will be to restore the progressive tax structure of President Eisenhower. We will then dis-incentivize American corporations from outsourcing jobs to autocratic countries and nominally democratic countries which deny rights to workers through the tax code.
We will roll back the reactionary Supreme Court decision allowing corporations to buy elections. This will be difficult, but corporations are not individuals, and cannot be permitted to have the luxury of protection as individuals, all the while escaping the responsibilities. The tea bag movement claims to be grass roots. Grass roots means fighting corporate power. The Republicans made law, and repealed law, to enable further corporate control of our country. Government protection of corporations against the people is fascism. This country has been creeping toward fascism since Nixon, and it stops here and now.
26 January 2010
Sandy, Just Say Arf!
I wrote, not here, a few days ago that Sandra Day O'Connor's leaving the Supreme Court was about the most evil act in decades. So, today I here her decrying on NPR the Court's decision to allow corporations to flood the political process with their cash. What the hell did she think they would do? Turn toward the center with her gone? The most selfish, stupid act by a public servant in decades. She handed the USofA to Robo Cop. I doubt she has the self-awareness to be ashamed.
25 January 2010
I Told You So, Again
I was driving back from getting my dead trees version of the NY Times, when NPR had its hourly news update. There, much to the shock of my tender ears, was Obama. The quote (close enough, I didn't record it): "In the last decade median income has fallen".
I'm expecting to hear from the White House, offering me the position of advisor that I have previously, on more than one occasion, volunteered for; after all, I was the one who pounded that fact into their pointy little heads. Well, may be not. But, it is a Good Thing to hear that he Finally Gets It. Now, spend the next months up to election day pounding the living crap out of the Bushies. They did this, not that good looking Negro boy.
I'm expecting to hear from the White House, offering me the position of advisor that I have previously, on more than one occasion, volunteered for; after all, I was the one who pounded that fact into their pointy little heads. Well, may be not. But, it is a Good Thing to hear that he Finally Gets It. Now, spend the next months up to election day pounding the living crap out of the Bushies. They did this, not that good looking Negro boy.
20 January 2010
Killing Peter to Pay Pandit
There has been a good deal of ink spread in the last few weeks discussing and dissecting all things Big Bank. Today's Times has an article about Citigroup's continuing problems. What isn't discussed is how these Too Big To Fail idiots are attempting to regain the profits they got during the run up to the Crash.
Some of the punditry refer to the yield curve approach, where banks take nearly free money from the Fed and then lend it out at market rates. But there's not so much lending going on. No, the main mechanism that the banksters are using to extract monopoly profits are through the consumer divisions. That's why all those new fees and stealth interest rate hikes are imposed.
If ever there were a reason to reimplement Glass-Steagall, this is it. Banksters who want to gamble with their own money, or that of investors should be free to. But neither their retail customers who don't benefit from the casino, nor the taxpayers who continue to foot the bill for bailing them out, should be forced to make the dice rollers whole. The counter argument is often made that without the insane profits (when life is easy, of course) of the casino, the retail customers would have to pay these prices. But the Chinese wall of Glass-Steagall was put in place precisely to prohibit the co-mingling of such disparate enterprises.
I am among those who feel betrayed by Obama. He's either very smart, but has his head so far up his butt that he just doesn't see that his actions reflect a disinterest in Main Street; or we've been well and truly had, McCain won.
Some of the punditry refer to the yield curve approach, where banks take nearly free money from the Fed and then lend it out at market rates. But there's not so much lending going on. No, the main mechanism that the banksters are using to extract monopoly profits are through the consumer divisions. That's why all those new fees and stealth interest rate hikes are imposed.
If ever there were a reason to reimplement Glass-Steagall, this is it. Banksters who want to gamble with their own money, or that of investors should be free to. But neither their retail customers who don't benefit from the casino, nor the taxpayers who continue to foot the bill for bailing them out, should be forced to make the dice rollers whole. The counter argument is often made that without the insane profits (when life is easy, of course) of the casino, the retail customers would have to pay these prices. But the Chinese wall of Glass-Steagall was put in place precisely to prohibit the co-mingling of such disparate enterprises.
I am among those who feel betrayed by Obama. He's either very smart, but has his head so far up his butt that he just doesn't see that his actions reflect a disinterest in Main Street; or we've been well and truly had, McCain won.
16 January 2010
Port-au-Prince, an elegy
It was December of 1983, and it was decided by The Wife that our few remaining sheckels would be spent on a trip to Haiti. She'd had a friend whose husband had a penchant for round Haitian women (and The Wife, while prep schooled and colleged in New England, is too; that led to a bit of a problem at customs) which planted the need to see the country. Baby Doc hadn't yet gotten thrown out, my nascent career change to photo-journalism had died whimpering, so what the Hell. I packed up the M4's, lots of Kodachrome, and made my first and only trip outside the USofA.
What I got from it were hundreds of slides, and a piece in a Connecticut newspaper (not yet, or likely ever, on-line so I can't share it) which got me an internship with Jack Anderson, which in turn got me a two day piece in the column about gun running in Ghana. And the occasional flicker of recognition whenever some bit of national newsworthy calamity occurred there. Until now.
Which brings us to Rush and Pat Robertson, who are evil incarnate. Repeat that ten times. People such as they are the reason Obama must stop this bi-partisan nonsense. Evil cannot be accommodated. Rush and Robertson prove that.
Robertson knows nothing of Haiti, its people or its history. I learned some of those in the week I was there. We stayed at the Hotel Montana, now destroyed. We hung out at the Hotel Oloffson, according to Twitter reports some damage yet still open. I roamed around Port-au-Prince and Petionville; the Montana was conveniently midway between both. (As I write, NPR is telling a story about rescues at the Montana. Weird to hear about a place one slept and ate in, destroyed in a few seconds. The owner, a Haitian and not some fat cat foreigner, is trying to find his wife's body. Truly eery.)
From memory, the Montana was a large whitewashed building, with a pool and covered veranda. The location was ideal for its purpose of housing tourists. The usual description of Haiti's geography is that it occupies the western half of the island of Hispaniola, with the Dominican Republic in the east. That's not quite true. Haiti has about a third of the island's footprint, and most of that is mountain. Port-au-Prince is the harbor city, and sits in a small plain at the foot of the mountains. Current reporting talks about the difficulty aid organizations are having getting into the country. The airport's sole runway runs from nearly water's edge to the mountain side. When we landed, it was much like going down that first hill on a rollercoaster, only for minutes, not seconds. Prevailing winds are from the west, so the aircraft have to find the eastern end of the runway, which means dropping out of the sky in front of that mountain. And it's not a long runway.
Petionville is the wealthy suburb, relatively speaking. The truly wealthy don't live near the city, but out in estates. Winding up the mountain from Port-au-Prince to Petionville is Avenue John Brown. Once out of the plain of the city, the road runs along a ridge; to the left are houses and hotels for the better-to-do, and to the right is a ravine with small dwellings. Some are constructed of cinderblock, others wood, and still others scraps; lots of corrugated steel roofing. This is the ravine the reporters talk about when they say that buildings fell down the mountain side. About the name of the road. Many roads, and all major ones as I recall, are named for persons prominent in the history of opposing slavery or Haiti's independence. And it is pronounced "Jean Braun" (as in Werner von).
The view from the veranda of the Montana was spectacular. Since it sits on the ridge, the view to the west looks out over the "good" neighborhoods nearby, then the harbor; a mosaic of colored roofs and walls blending with the sky and water. It looks almost Idyllic. I guess that's why the better off live up the mountain. About the walls. When I set off on my first walk back to the city, down the mountain, Leicas in hand, I wandered among houses on the side streets. They all were walled in, and those walls had a dense coating of broken glass in the concrete which layered the top. I had never seen that before, and the point was well taken.
So, for five or six days, whatever it was, I wandered around Port-au-Prince and Petionville taking pictures. Getting around was often walking, but if I wanted to get someplace in a hurry, there was public transportation, well sort of. Tap-taps and camionettes is what the vehicles were called. Twenty five cents to ride. Peugeot station wagons are camionettes and the rest were tap-taps; some were pickup trucks with benches and a top, while others were conventional mini-buses. People just managed to squeeze in. I was never accosted or even pestered. Just another passenger. Oh, yes; all brightly painted.
I didn't venture into Cite Soleil. I didn't want to get overly angry at the situation. I wasn't there as an aid worker, or even investigative journalist. What I wrote on return was angry enough; the shard topped walls set my mind. We did go to a "voodoo" service. Now, I know, it was mostly pasty white tourists in the audience. On the other hand, to get there, at night of course, one got in a tap-tap and drove out into the countryside, and arrived at a smallish hut where the service was held, lit only by candles. As Jack Paar used to say, "I kid you not". Recall, Baby Doc was still in power, so carving up tourists for sport was heavily discouraged. I wouldn't have gone to the country in the aftermath of his ouster, nor later when Aristide was deposed. The Right Wingnuts get ever so agitated when democracy doesn't do what they want. Another real world example of Lord of the Flies.
What to do today? Send money to either Oxfam or the Salvation Army. Don't do the humanitarian thing and fly down to "help". You'll just get in the way, and consume an order of magnitude more resources than a Haitian. What's left and being sent should be for them, not fly-ins.
What I got from it were hundreds of slides, and a piece in a Connecticut newspaper (not yet, or likely ever, on-line so I can't share it) which got me an internship with Jack Anderson, which in turn got me a two day piece in the column about gun running in Ghana. And the occasional flicker of recognition whenever some bit of national newsworthy calamity occurred there. Until now.
Which brings us to Rush and Pat Robertson, who are evil incarnate. Repeat that ten times. People such as they are the reason Obama must stop this bi-partisan nonsense. Evil cannot be accommodated. Rush and Robertson prove that.
Robertson knows nothing of Haiti, its people or its history. I learned some of those in the week I was there. We stayed at the Hotel Montana, now destroyed. We hung out at the Hotel Oloffson, according to Twitter reports some damage yet still open. I roamed around Port-au-Prince and Petionville; the Montana was conveniently midway between both. (As I write, NPR is telling a story about rescues at the Montana. Weird to hear about a place one slept and ate in, destroyed in a few seconds. The owner, a Haitian and not some fat cat foreigner, is trying to find his wife's body. Truly eery.)
From memory, the Montana was a large whitewashed building, with a pool and covered veranda. The location was ideal for its purpose of housing tourists. The usual description of Haiti's geography is that it occupies the western half of the island of Hispaniola, with the Dominican Republic in the east. That's not quite true. Haiti has about a third of the island's footprint, and most of that is mountain. Port-au-Prince is the harbor city, and sits in a small plain at the foot of the mountains. Current reporting talks about the difficulty aid organizations are having getting into the country. The airport's sole runway runs from nearly water's edge to the mountain side. When we landed, it was much like going down that first hill on a rollercoaster, only for minutes, not seconds. Prevailing winds are from the west, so the aircraft have to find the eastern end of the runway, which means dropping out of the sky in front of that mountain. And it's not a long runway.
Petionville is the wealthy suburb, relatively speaking. The truly wealthy don't live near the city, but out in estates. Winding up the mountain from Port-au-Prince to Petionville is Avenue John Brown. Once out of the plain of the city, the road runs along a ridge; to the left are houses and hotels for the better-to-do, and to the right is a ravine with small dwellings. Some are constructed of cinderblock, others wood, and still others scraps; lots of corrugated steel roofing. This is the ravine the reporters talk about when they say that buildings fell down the mountain side. About the name of the road. Many roads, and all major ones as I recall, are named for persons prominent in the history of opposing slavery or Haiti's independence. And it is pronounced "Jean Braun" (as in Werner von).
The view from the veranda of the Montana was spectacular. Since it sits on the ridge, the view to the west looks out over the "good" neighborhoods nearby, then the harbor; a mosaic of colored roofs and walls blending with the sky and water. It looks almost Idyllic. I guess that's why the better off live up the mountain. About the walls. When I set off on my first walk back to the city, down the mountain, Leicas in hand, I wandered among houses on the side streets. They all were walled in, and those walls had a dense coating of broken glass in the concrete which layered the top. I had never seen that before, and the point was well taken.
So, for five or six days, whatever it was, I wandered around Port-au-Prince and Petionville taking pictures. Getting around was often walking, but if I wanted to get someplace in a hurry, there was public transportation, well sort of. Tap-taps and camionettes is what the vehicles were called. Twenty five cents to ride. Peugeot station wagons are camionettes and the rest were tap-taps; some were pickup trucks with benches and a top, while others were conventional mini-buses. People just managed to squeeze in. I was never accosted or even pestered. Just another passenger. Oh, yes; all brightly painted.
I didn't venture into Cite Soleil. I didn't want to get overly angry at the situation. I wasn't there as an aid worker, or even investigative journalist. What I wrote on return was angry enough; the shard topped walls set my mind. We did go to a "voodoo" service. Now, I know, it was mostly pasty white tourists in the audience. On the other hand, to get there, at night of course, one got in a tap-tap and drove out into the countryside, and arrived at a smallish hut where the service was held, lit only by candles. As Jack Paar used to say, "I kid you not". Recall, Baby Doc was still in power, so carving up tourists for sport was heavily discouraged. I wouldn't have gone to the country in the aftermath of his ouster, nor later when Aristide was deposed. The Right Wingnuts get ever so agitated when democracy doesn't do what they want. Another real world example of Lord of the Flies.
What to do today? Send money to either Oxfam or the Salvation Army. Don't do the humanitarian thing and fly down to "help". You'll just get in the way, and consume an order of magnitude more resources than a Haitian. What's left and being sent should be for them, not fly-ins.
12 January 2010
Joe, It's So Good to Know Ya
"The China Daily" published a bit of Stiglitz on New Year's Eve, and I've just now come across it. As the name of this endeavor says, distribution matters. In the piece, he lists the major screw ups of the last year, and this time around, I'm going to quote a bit more than usual. Here we go.
... markets are not self-correcting. Indeed, without adequate regulation, they are prone to excess. In 2009, we again saw why Adam Smith's invisible hand often appeared invisible: it is not there. The bankers' pursuit of self-interest (greed) did not lead to the well-being of society...
This is his first point, and with good reason; the free market of Adam Smith was a fantasy even then, and he knew it. Smith was proposing a better way to structure an economy and society, but felt that contemporary governments were too autocratic. He posited that an economy made up of small actors would function smoothly, and fairly. But the key assumption, and it was just an assumption, is that there can be an economy of small actors. That's never been true, and now that the too big to fail banks are fewer and bigger, preposterously less so. Bush/Gramm/Paulson simply made it worse, absent stringent controls on their behaviour.
Another point, given that I'm a Keynesian:
... Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster. Other countries succumbed to the old orthodoxy pushed by the financial wizards who got us into this mess in the first place.
Those who condemn Roosevelt as not having ended the Great Depression with his fiscal policies (modulo the 1937 screw up), conveniently ignore the fact the World War II, which they do credit with ending the Depression, was just Keynesian with lots more dead bodies. Hypocrites, as usual.
Last quote:
... while the benefits of many of the financial-engineering innovations of recent years are hard to prove, let alone quantify, the costs associated with them - both economic and social - are apparent and enormous.
Many, humble self included, have been calling for a restructuring of finance to Yenta status; just match making between savers and borrowers. The "innovations" have done nothing but transfer wealth from the many to the few. In recent years 40% of corporate profits have been due to financial manipulation, not production of goods. This is just Bad. It should be against the law to do Bad Things.
... markets are not self-correcting. Indeed, without adequate regulation, they are prone to excess. In 2009, we again saw why Adam Smith's invisible hand often appeared invisible: it is not there. The bankers' pursuit of self-interest (greed) did not lead to the well-being of society...
This is his first point, and with good reason; the free market of Adam Smith was a fantasy even then, and he knew it. Smith was proposing a better way to structure an economy and society, but felt that contemporary governments were too autocratic. He posited that an economy made up of small actors would function smoothly, and fairly. But the key assumption, and it was just an assumption, is that there can be an economy of small actors. That's never been true, and now that the too big to fail banks are fewer and bigger, preposterously less so. Bush/Gramm/Paulson simply made it worse, absent stringent controls on their behaviour.
Another point, given that I'm a Keynesian:
... Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster. Other countries succumbed to the old orthodoxy pushed by the financial wizards who got us into this mess in the first place.
Those who condemn Roosevelt as not having ended the Great Depression with his fiscal policies (modulo the 1937 screw up), conveniently ignore the fact the World War II, which they do credit with ending the Depression, was just Keynesian with lots more dead bodies. Hypocrites, as usual.
Last quote:
... while the benefits of many of the financial-engineering innovations of recent years are hard to prove, let alone quantify, the costs associated with them - both economic and social - are apparent and enormous.
Many, humble self included, have been calling for a restructuring of finance to Yenta status; just match making between savers and borrowers. The "innovations" have done nothing but transfer wealth from the many to the few. In recent years 40% of corporate profits have been due to financial manipulation, not production of goods. This is just Bad. It should be against the law to do Bad Things.
04 January 2010
Old King Cole; Not a Merry Soul
Since I am an obscure blogger, not yet on the D list (with Ms. Griffin), much of what I've deduced or discovered often gets mainline exposure with those on the A list (occasionally B or C). Juan Cole is an A lister (may be B, by some lights). I found this today, and commend it to you.
I would add an 11th "worst thing" to his list: the takeover of the American military by the Christian Right. This is not something I discovered on my own, since I'm not a reporter with access to the military. But it was something I deduced quite a while back, and when I read the first report, my reaction was, "of course; how else can they pull off a volunteer military that invades countries just for the hell of it?". Onward Christian soldiers.
A number of his worst things I have chronicled in this endeavor, others I hadn't gotten around to yet. While the reading will likely raise your blood pressure, it is worth it.
I would add an 11th "worst thing" to his list: the takeover of the American military by the Christian Right. This is not something I discovered on my own, since I'm not a reporter with access to the military. But it was something I deduced quite a while back, and when I read the first report, my reaction was, "of course; how else can they pull off a volunteer military that invades countries just for the hell of it?". Onward Christian soldiers.
A number of his worst things I have chronicled in this endeavor, others I hadn't gotten around to yet. While the reading will likely raise your blood pressure, it is worth it.
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