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?