Category Archives: capitalism

Eff The 90’s

Have you been watching President-elect Barack Obama’s appointments to his administration with a sense of confusion? A feeling of anti-nostalgia? Crying out, “Why all the ClintonAdmin re-treads!?”

Steve Fraser is your man. Writing in The Nation, Fraser echoes a familiar complaint by liberals about recent appointments, registers dismay at the nearly uniform “neo-liberal” ideology, and compares the group think to the greater diversity that stocked Franklin Roosevelt’s cabinet during a transition period frought with peril.

Worth reading for historical boning up, I suppose, but I was more interested in Fraser’s call for bolder action:

Under the present dispensation, the bailout state makes the government the handmaiden of the financial sector. Under a new one, the tables might be turned. But who will speak for that option within the limited councils of the Obama team?

A real democratic nationalization of the banks–good value for our money rather than good money to add to their value–should be part of the policy agenda up for discussion in the Obama era. As things now stand, the public supplies the loans and the investment capital, but the key decisions about how they are to be deployed remain in private hands. A democratic version of nationalizing the financial system would transfer these critical decisions to new institutions created by the Congress and designed to pursue public, not private, objectives. How to subject the flow of credit and investment capital to public control ought to be on the drawing boards if we are to look beyond the old New Deal to a new one.

Or, for instance, if we are to bail out the auto industry, which we should–millions of jobs, businesses, communities, and what’s left of once powerful and proud unions are at stake–then why not talk about its nationalization too? Why not create a representative body of workers, consumers, environmentalists, suppliers and other interested parties to supervise the industry’s reorganization and retooling to produce, just as the president-elect says he wants, new green means of transportation–and not just cars?

Why not apply the same model to the rehabilitation of the nation’s infrastructure; indeed, why not to the reindustrialization of the country as a whole? If, as so many commentators are now claiming, what lies ahead is the kind of massive, crippling deflation characteristic of such crises, then why not consider creating democratic mechanisms to impose an incomes policy on wages and prices that works against that deflation?

Why not, in effect, assert greater control by the people over the economic forces that affect them? “Cuz that way lies socialism! Aaagh!” Onoz. Heavens to betsy. And, well, probably not. More like neo-social democracy.

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Whipped Into a Frenzy

I will not be the first nor the last person to observe this: the Black Friday stampede at a Long Island Wal-Mart that killed Jdimytai Damour suggests our culture is sick. It represents just about everything that is wrong with our economy: the big box store, the exploitation of low-paid seasonal hires, hyped-up materialism, desperation and greed for “bargains” and a “tradition” of post-Thanksgiving shopping, disregard for workplace safety standards — as a friend of mine observed before Damour’s identity was known, “the poor guy was probably an undocumented worker.” He wasn’t, but given past practices by Wal-Mart and other global corporations, my friend’s suspicion was not without reason.

That said, I won’t martyrize Damour; he didn’t “die for our sins.” He died because people — the bargain-obsessed shoppers and the big box operators who whipped them into a frenzy — value things over people, “getting ahead” over courtesy. The store owners could not be bothered to provide adequate security; the shoppers could not be bothered to wait another five minutes for opening time or walk casually to make their purchases. Push down the pregnant woman! What do you mean we have to leave? I’ve been waiting since 9 o’clock last night!

In the wake of this awful event, consider the reported response by the Toy Industry Association to a letter-writing campaign launched by parents demanding fewer advertisements aimed at their children:

“If children are not aware of what is new and available, how will they be able to tell their families what their preferences are?” an industry statement said. “While there is certainly greater economic disturbance going on now, families have always faced different levels of economic well-being and have managed to tailor their spending to their means.”

The full AP article deserves reading. It reports a sociologist and a social worker discussing desperate parents straining their budgets to meet the demands of their kids, despite facing unemployment and homelessness.

And while it is all well and good to counsel such parents on the virtues of saying “no” (with practice, I have become pretty good at it; but then, I’m a dick), the working poor have few other outlets for entertainment than television, where the psychological warfare is waged.

Yesterday — to take a random personal example — my four-year-old son vegged out in front of a full day “Sponge Bob Square Pants” marathon on Nickelodeon. How nice of those programmers at Nick to create 12 hours of non-stop Sponge Bob. They must have done it outta the goodness of their hearts, yes? Uh, no. Sponge Bob sells toys.

“I want that,” my son would say on seeing a much hyped toy. Then another commercial. “I want that.” And another commercial. “I want that.” And so on. All day. Of course, we employed the usual parent artillery: uncommitted speculation (“We’ll see….”), disbelief (“You don’t even know what THAT is!”), outright rejection (“Not in my house”) and sarcasm (“Of course you want that, honey. You want everything.”)

Not pleasant, but not unendurable. I take it as part of the challenge of raising children in a crazed consumer culture. I won’t shelter my kids from the ugliness of capitalism; I would rather arm them with it. That said, I cannot endorse the trial-by-fire so casually described by a toy industry consultant:

Gottlieb also contends that it’s good for children to encounter toy ads — even in cases where products later turn out to be disappointments.

“It teaches, for very low stakes, how to navigate in our consumer culture,” he said.

“They are going to have to spend the rest of their lives listening to every kind of marketing approach, and childhood is where they will learn to cope with it.”

As for the economic pressure on parents, Gottlieb sounds a fatalistic note.

“Believe me, there are families with much bigger issues on their plates right now then worrying about whether their child will be unhappy because they did not get a particular toy,” Gottlieb wrote in his “Out of the Toy Box” blog. “Delivering disappointment goes with the job of parenting.”

Wow. That’s right. Why change the culture? Why exercise some of that “corporate responsibility” so often given a special bullet point in mission statements? Why look where you’re stepping when rampaging through the store to get that useless crap for 50% off!? 

Why listen to parents (who, um, do the purchasing, hell-o!) when they ask you to target ads to them and not their children? Apparently that is too “nanny state” or “paternalistic” for champions of “free enterprise” like Gottlieb. Better to exploit a child’s natural greed and let him or her nag the parent. Corporations don’t want your input, silly consumer; they want your money. Prepare to get trampled.

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Does Anyone at the Wall Street Journal Know How to Read?

Former Representative Dick Armey (what a name) shakes his fist at “compassionate conservatism” in the WSJ, declaring Bush’s so-called political philosophy a “mistake.” If by that term Armey means “incoherent ruse,” he’s right. But, no, this is the Republican argument that the party, once in power, has lost its way; that its corporate-loving, anti-government ideology is not inherently corrupting. As with Lynndey England and Charles Graner at Abu Ghraib, the fault of abuse lies with a few “bad apples.”

What sticks out to me is this bit of Armey’s dismay that the “truth” (my irony quotes) about Obama’s tax policy proposals has not got out:

A Rasmussen poll of Oct. 30 reported that 31% of likely voters believed that “taxes will go down” under an Obama administration versus just 11% under a McCain administration. Shockingly, 19% of self-described conservatives believed Mr. Obama would cut taxes; only 12% thought Mr. McCain would.

Perhaps this minority of conservatives believed this way because, I dunno — they read nonpartisan reports like this from the Tax Policy Center:

Compared to current law, TPC estimates the Obama plan would cut taxes by $2.9 trillion from 2009-2018. McCain would reduce taxes by nearly $4.2 trillion. Obama would give larger tax cuts to low- and moderate-income households and pay some of the cost by raising taxes on high-income taxpayers. In contrast, McCain would cut taxes across the board and give the biggest cuts to the highest-income households.

That’s just from the abstract. (Emphass-is mine.) The entire report is available in annoying PDF form (seriously, is HTML really that hard?) if you feel up to reading it. I know I may be assuming a lot, but perhaps these shockingly 19% of conservatives take tax policy seriously, really want tax cuts, and really want them for average schmucks like, say, Joe Not-a-Real-Plumber. So what did they do? They took time to find non-partisan reports (after all, the media has a “liberal bias”) and actually read them.

This inability to read has probably affected Armey’s grasp of history.

What will be the fate of free market capitalism in America? Will the 2008 election look more like 1932 — or 1992?

On both occasions, Republican presidents had abandoned their party’s principles for bigger government policies that exacerbated difficult economic times. On both occasions, Democrats took control, largely hijacking the small-government, fiscally responsible rhetoric of their opponents. Of course, FDR’s election ushered in the New Deal, the most dramatic expansion of government power in American history, together with policy changes and economic uncertainty that inhibited investment and growth and locked in massive unemployment for nearly a generation.

Say whatty-what? More of that ole-time revisionism. Oh, wait – to revise a theory based on new information is legitimate. To turn reality upside-down to fit the narrow confines of one’s ideology, what is that called again? Sticking one’s head up one’s ass? Close enough.

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Kevin Phillips on Bill Moyers’ Journal

BILL MOYERS: There’s an argument apparently going on within Obama’s inner circle even as we speak. Some of his advisors say it would be politically and economically disastrous if those billions of taxpayer dollars in the bailout were just to sit in the vaults of the bank. On the other hand, the Wall Street and the corporate types, according to the press this morning, are pushing back. They say leaving the money in the banks would help stabilize them and prevent a further crisis in the credit market. What do you think?

KEVIN PHILLIPS: Well, I think basically that’s the most screaming set of self-interested analyses that I can remember. When this thing was passed, they basically had people on television saying that if this bailout doesn’t go through, you’re not going to be able to get money out of your ATMs, all sorts of dire things were going to happen. And now it turns out that, well, maybe they weren’t expected to spend that money after all. Maybe that was all a great camouflage outfit.

Because what they want to do with the money and seemingly it’s okay by a lot of the people involved is use it for bonuses, for dividends, for sitting around so they feel comfortable, for mergers. It’s mind boggling. They created a panic psychology, which has taken a lot of people’s 401(k)’s and savings accounts and pension opportunities and pointed them right toward the toilet. And now they got their bailout, scaring everybody to death, and what do they want to do with it? Nothing.

Full transcript at pbs.org.

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Language of Fear

Now that a $700 billion (or is it $850 billion?) bailout bill has become law, reversing within only a few days a vote that struck down a less pork-laden version, it might be instructive to look at how this issue was presented to the American public.

My time is tight today, so I apologize if this entry is pretty scant, but this is something I have been listening to for a couple weeks now. Today I will merely enter into evidence this news story from NPR in collaboration with This American Life that I heard on the radio last week. It’s an excellent story, explaining to the uninitiated the workings of money market funds and the commercial paper market, and what all that has to do with the current liquidity crisis. But look at the language used to describe this crisis by both the reporters and their interview sources:

The potential for disaster was horrifying.

…the time when the American economy survived a brush with death.

The nation’s entire financial system slid toward a terrifying abyss….

…very real disaster.

nightmare scenario

“For those of you who’ve experienced an earthquake, some say it’s a soul-wrenching experience, and it’s massively moving everything,” Peterson says. “And that’s last week. There was a monster unleashed.”

“I think we were close to the abyss.”

If a money market fund loses money, that’s called “breaking the buck.” It’s like a tear in the space-time continuum. It’s simply not supposed to happen.

“Breaking the buck is sort of like having a serial killer in a high school — it causes a little bit of panic,” Balika says.

Wow, that is quite a load of metaphors. An earthquake ruptures the space-time continuum, unleashing serial killer monsters who push high schools toward the abyss.

Where’s the smoking gun mushroom cloud?

The Wrong Bailout

As it’s entertaining to see McCain’s panicked behavior make him look more like an ass than ever, we should not forget that Senate Democrats – including the Democratic nominee for President – are letting BushAdmin fear-mongering push them into going along with this bullshit bailout, so matter how many negotiated “principles” a revised bill adheres to.

There are two fantasies at play here: first, that we have $700 billion to spend at all; second, that putting ourselves more in hock to foreign lenders should be done for the sake of salvaging a corrupt and incompetent banking and financial industry. If we’re going to put my children’s grandchildren into debt, why not spend the money on things that will serve them best in the long run? Why not bail out the health care system? The education system? The energy production system? Are there not workers who need retraining? Are there not new technologies that deserve more research and investment to push them along so that we are free from fossil fuels, more secure as a nation, and less destructive environmentally?

The panic-stricken will scream that “doing nothing” will push us into a depression. I’m not saying “do nothing.” I’m saying, do something for the long term social and economic health of the country as a whole (with dividends for the rest of the world if we get our crap together), and let the bankers, the lenders, the investors, and the other money-monkeys go marching off to their own doom. As for the depression – be realistic. This bailout will not forestall the next calamity. Ruben Bolling explains why.

Yay! Another Non-issue!

Props to my friend Leah for noting what a dodge this is. Head full of cold germs, my first thought when I heard CNN breathlessly report this morning (“this just in!”) John McCain’s proposal to delay his debate with Barack Obama and renounce campaigning until a bailout program is developed was, “Ah. Good strategy. Makes him look ‘presidential’ – whatever that means.”

Such is the obvious gambit. But, hey, what a way to get out of answering questions about an economy McCain fails to understand. Sure, the debate is focused on foreign policy, but a global economy facing a widespread crisis as the world’s largest consumer and debtor drowns in its own stupidity might have some bearing on how the next Prez interacts with his peers on the world stage. McCain has found a handy way to deflect criticism for last week’s gaffes and wild demands for firing the SEC chief, while putting Obama on the spot. The Bloomberg article linked above quotes a perfesser:

“The suspension does bring the ‘ready-to-lead’ issue back into focus for McCain,” said Paul Light, a public service professor at New York University. “Obama is damned if he does, damned if he doesn’t.”

Dana Perino helpfully chimes in:

“Bipartisan support from Senators McCain and Obama would be helpful in driving to a conclusion,” press secretary Dana Perino said.

But, hey, no pressure, “Barry”. So far, the AP reports that Obama is not, as Sarah Palin might put it, read to “blink.” If you’re thinking, “Er, isn’t this a non-issue meant to distract us from the sheer stupidity of the Paulson bailout plan,” I would chastise you for your cynicism. Really, just because neither candidate has anything more to offer than vague “principles” and is more interested in hedging their bets against either a full endorsement or a full rejection than, say, calling the Paulson bailout for the utter bullshit it is – that’s no reason assume they’re more comfortable arguing over porcine applications of lipstick. Are not presidential contests supposed to be about debate formats, the relative heights of podiums and microphones, the selection of bland moderators, and the arrangement of deck chairs on the Titanic?

Hey! Guess Who Smelled the Coffee!

Headline: McCain says economy in crisis.

Next: McCain finds ass with both hands.

Okay, snark over. I find it interesting that after so many years opposing regulation of the investment and financial communities, he is now calling for oversight of the bailout program. In fact, I think he makes a good point. But, really, where has he been? How the hell does he think we are going to afford this mess? More foreign debt? Lower taxes? Selling off lousy mortgage assets at pennies on the dollar? We have a $3 trillion war, a $5 trillion government take over of Fannie Mae and Freddie Mac, and now another $700 billion (Paulson calls it a maximum, but I wouldn’t be surprised he is low-balling) to save the asses of the clowns who created the house of cards / shell game / Ponzi scheme / smoke and mirrors clusterfoofaraw we have been blindly calling an economy for the last mmmmmmmm 7 years? How about longer? Our government has been de-regulating everything for nearly 30 years now. Any chance we might finally recognize the folly of letting foxes guard the hen house?

(You can tell I’m upset when I start throwing metaphors around like spittle from a rabid dog. Frothy spittle.)

I am not holding my breath. Should Mr. Changey-Hopey Guy from Illinois actually overcome the white flight of Palinophiles and win this election, I doubt his answers will be much better. There is potential in his plans for an environmental technology overhaul, but how do you get that off the ground under the weight of such massive debt? When do we get the bill?

I say we’re already paying for it in the poor state of manufacturing, health care, and our social infrastructure – you know, the “hidden costs.” Yet the symbiotic relationship between American and Chinese manufacturing and lending has all the tenuousness of the doctrine of Mutually Assured Destruction: so long as no one is kah-razy enough to press the button, that doctrine held, we’re safe. Now we have Mutually Assured Globalization. So long as no one goes broke, we’ll keep buying and the Chinese (and other countries) will keep selling and lending. Which do you have more faith in – our instincts for self-preservation that keeps us from nuking each other; or the American capacity for consumerism? How long before the Chinese and others are forced by their own economic crises to come collecting?

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Fundamentals Dept: American Cities in Financial Crisis

You may have been distracted by the 500+ point Dow Jones drop on Wall Street, or the bankruptcy of Lehman Bros., or Bank of America’s absorption of Merrill Lynch, or Senator John McCain’s insistence that American economic fundamentals are strong. But the National League of Cities issued a report today on the bleak financial situation common to American cities that seems quite at home amidst the general malaise.

The report found that the decline in property tax revenues (3.6 percent from the prior year, in inflation-adjusted terms) is having an impact on the fiscal health of local governments. Unlike the previous economic downturn in 2001, when property tax revenues were able to buffer the effects of declining income and sales tax receipts, the weak housing market is likely to affect city budgets until 2010.

Moreover, the report found that other sources of revenue are headed downward as well, with sales tax receipts declining by 4.2 percent and income tax revenues expected to decline by 3.3 percent in inflation-adjusted dollars in 2008 compared to 2007.

As a result, 64 percent of city finance officers surveyed expect cities to have a harder time meeting fiscal needs in 2008, and 79 percent forecast even bigger problems ahead in 2009.

“Even if economic conditions improved immediately, the nation’s cities are likely to be realizing the effects of the current downturn through 2010,” said Michael A. Pagano, co-author of the report and dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. “The sharp decline in property tax receipts erodes a critical buffer that has helped cities through economic downturns for the last three decades.”

On the spending side, increases of 3.0 percent in 2007 were met with flat or declining revenues, according to the report. Taken together, city finance officers project a budget gap of 2.8 percent in 2008, with revenues declining by 4.3 percent and spending declining by 1.5 percent in inflation-adjusted dollars over 2007.

The areas affecting city budgets most heavily include prices and inflation (including energy prices), which were identified by 98 percent of respondents. Increases in infrastructure (85 percent) and public safety spending (83 percent), and employee-related costs for wages (95 percent), health care (86 percent), and pensions (79 percent) were also cited as budget-busters.

Fear not, people. I am sure we can pray our way outta this mess.

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More on Creative Capitalism

Yesterday’s In Contempt cartoon addressed the “creative capitalism” concept that Bill Gates and the Gates Foundation have been promoting this year. Today I received an interesting response from Peter Quinn, who represents a group of artists laying claim to the “creative capitalism” moniker. At Creativecapitalism.net, Quinn et al. have formed a collective of artists that share ideas and pool resources to self-publish and promote creative endeavors. I’ll let their “about” page elaborate:

Creative Capitalism was formed to produce art and music projects outside orthodox gallery and music industry modes of production and distribution. We are interested in the cross-pollination of disciplines. Artists making music, musicians making art. We started our first project with a 192 page full color perfect bound book/cdrom of contributed art and music called Friends and Friends of Friends. The project was an experiment in social networking as curatorial method. It is filled with imagery and music from contributors from Baltimore, New York, the U.S. at large, as well as artists from international locations….

Our selections, decision-making, editorial is not merely based on aesthetic alignment but rather a belief system. We are interested in propagating art and music throughout and helping artists get their voice heard. We are interested in the social and political effect of artist output.

Creative Capitalism is committed to the creation, production, and dissemination of art and music. Art and music controlled by artists and musicians. We believe that new ideas can not be determined by following stylistic trends or demographics. We are a new capitalism. We are interested in egalitarian enterprises, social networking, invention, and collaboration. What is your function? Long Live Creative Capitalism – Art + Music Action Product!

Naive? Yeah, sure, but c’mon — they’re artists! They’re an interesting bunch, and I support any group of artists who try to do things on their own. It’s not easy, as I can tell you first-hand.

And they’re in a wiki-war with Gates! According to Quinn:

we have contempt for bill gates and his people for trying to take ownership over altruism and philanthropic ideals. although we commend them for their actions, we have nothing but total disgust for someone who promotes their own philanthropy in the form of PR.

we’ve been pushed back into the depths of wikipedia because of gates foundation PR team. In their wiki, they were claiming that he coined the term “creative capitalism” this year in 2008. This is very suspicious to us because we’ve been running an art and music publishing collective for 4 years now called “creative capitalism” and when we brought this to wikipedia’s attention, they buried us deep within the search for “creative capitalism.” They first kept omitting our entry until we complained, and as a result, the gates people took off the claim that he coined the term.

What is infuriating is that WE didn’t even coin the term. it’s an idea that’s been circulating for decades.

And what is even more infuriating is that a “knowledge base” such as wikipedia is letting popularity determine fact. Seems very Orwellian to me, the notion of determined fact or popular knowledge.

Indeed, there is a wikipedia disambiguation page for “creative capitalism” — although that is slated for deletion in five days unless someone creates a wikipedia entry for the collective.