The Bear Market Economics Phenomenon

The Origins and the Mechanics of the Theory of Conceptual-Commodity-Value-Management

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Mon, 31 Oct 2016 14:39:00 +0000

The Origins and the Mechanics of the Theory of Conceptual-Commodity-Value-Management

(Why and How These Theories thrive within Post-Industrial Post-Modern Bourgeois-State-Capitalism)

by Michel Luc Bellemare / October 21st, 2016

The theory of conceptual-commodity-value-management is the theory that prices, values and wages are based on what an individual, an entity and/or an enterprising alliance can get away with. That is, the arbitrary price, value and wage that these controlling individuals, entities and/or enterprising alliances are able to command and realize on the open market through various network exclusionary and collusionary practices. In fact, a market by definition is the product of an enclosure or privatization of a commodity, service and/or profession in the hands of a select few so as to manufacture an artificial demand in order to manufacture a profit; i.e., surplus value. Once a market-enclosure has been established, price, value and wage is increasingly contingent on a theory of conceptual-commodity-value-management; i.e., the arbitrary whims of the enterprising alliance, which has fashioned the specific market-enclosure, and now set its own prices, values and wages, based on its own arbitrary determinations. These enterprising alliances determine the cost for anyone wishing to enter the specific market and they determine the range of prices, values and wages that can be commanded within their specific enclosed markets. It is theories of conceptual-commodity-value-management that manufacture and reside behind the increasing financial inequality within post-industrial post-modern bourgeois-state-capitalism.

Theories of conceptual-commodity-value-management are the methods and theories by which prices, values and wages are established when rational labor theories of value and the modern notion of labor as the foundation for determining price, value and wage have been jettisoned. Theories of conceptual-commodity-value-management are post-modern, post-industrial theories of value, price and wage, in the sense that they are products of the “post-modern…incredulity toward meta-narratives”.¹ These theories come to fruition when a workforce is well-subjugated and pacified, both materially and mentally, through surveillance, discipline, indoctrination and punishment. These theories develop from the premise of a subjugated docile workforce and the notion that there is no such thing as universal truth and/or any meta-narratives of emancipation, other than the meta-narrative of bourgeois-state-capitalism. To put this in Nietzschean terms, these theories are outgrowths of “the destruction of [our] ideals”² and “the belief in absolute… meaninglessness”.³

These types of theories are products of the rampant incredulity toward meta-narratives that permeate contemporary post-modern society in the sense that the delegitimation of grand-narratives, such as Marxism etc., means that everything is now a matter of perspective, including such things as price, value and wage etc. With the delegitimation of universal truth and meta-narratives, which began with the Nietzschean notion of the death of God, everything universally accepted as valid and legitimate was put into question, including rational labor theories of value etc. According to Jean-Francois Lyotard, when all foundational precepts and meta-narratives were subject to “a process of de-legitimation…signs of which have been accumulating since the end of the nineteenth century…an internal erosion of principle[s]…[took place, where]…frontiers…[were now] in constant flux”.⁴

Socio-economically, this delegitimation process meant that wholly new principles and theoretical perspectives could be established across the financial and economic spheres, devoid of rational basis since belief in the emancipatory powers of rationality were increasingly suspect and in doubt, due to the fact that, according to Max Weber, instrumental-rationalism has a tendency to become an “iron cage”.⁵ This meta-narrative incredulity stimulates and stimulated the advent of theories of conceptual-commodity-value-management in the economic sphere, which are grounded in subjectivity and relativism, the belief that if there is no universal truth or ultimate grounding basis for price, value and wages, then everything is based on what an individual, entity and/or enterprising alliance can get away with in the marketplace. Devoid of universally shared principles, everything is subject to whim, self-interest, self-delusion and what can be machinated in the marketplace; hence, one of the primary reasons for increasing financial inequality.

As Nietzsche states:

When there is no…universal…[and] at bottom, man has lost the faith in his own value when no infinitely valuable whole works…Nihilism [presents itself, where]…underneath all…there is no grand unity.[Nonetheless] an escape remains: to pass sentence on this whole world of…deception, and invent a world, a true world…a world…fabricated…solely from psychological needs.⁶

This is exactly what theories of conceptual-commodity-value-management are. They are fictional socio-economic worlds fabricated from the arbitrariness of psychological needs of inflated self-esteems and delusional notions of grandeur, which have been able to be coalesced together in the marketplace, due to the gravitational force of oligarchical enterprising alliances. Theories of conceptual-commodity-value-management express and develop from the inherent nihilism; i.e., the belief according to Nietzsche that “everything is…subjective”⁷, which underpins post-modern post-industrial bourgeois-state-capitalism. These theories and their arbitrary methods of price, value and wage determinations are symptomatic of “the penetrating feeling of nothingness”⁸ that the capitalist mode of production and consumption manufactures within our everyday lives.

Devoid of rational mooring, these arbitrary price, value and wage determinations, derived from the arbitrary whims of the captains of industry and/or enterprising alliances, are only given force, influence and realism via the gravitational force of enterprising alliances or captains of industry, who have been able to corner a specific market or economic branch. Despite lacking any underlying universal verity, these arbitrary prices, values and wages are, nonetheless, accepted and financially legitimate, because these enterprising alliances and/or captains of industry have been able to enclose a specific market and thus control price range, value standards and wage range.

Controlling these specific markets and/or branches of industry, these alliances and captains of industry are able to arbitrarily set prices, values and wages, according to their own self-perceived psychological needs. They are able to command a set price, a set value and a set wage based on their own imaginations, desires and their own personal notions of self-worth, which is almost always over-evaluated and inflated. For example, increasing insurance rates, banking fees, bogus price hikes, sports salaries, CEO salaries etc. are all subject to the influences of theories of conceptual-commodity-value-management. As a result, this inevitably leads to increasing financial inequality, which it has, as over-evaluations outstrip wages and small wage increases, resulting in a greater portion of the capital pie going to a select few stationed at the top of the financial pyramid of corporate-capitalist feudalism.

These arbitrary price, value and wage determinations, which are, in essence, figments of over-inflated egos and the unquenchable thirst for profit, are now given free-rein because, as Nietzsche argues, devoid of “unity, or the concept of truth…existence has no goal or end”⁹ other than what an entity or entities fashion for themselves. And, the logic of capitalism is always a convenient substitute for “the feeling of valuelessness”¹⁰, that the delegitimation of grand-narratives engenders when “the principle of a universal meta-language [i.e. truth] is replaced by the principle of…plurality”.¹¹ The logic of capitalism; i.e., the logic that stipulates “the maximization of profit by any means necessary at the lowest financial cost as soon as possible while only satisfying the minimum logical requirements of…[people]”¹², comes to fill the void that the universal nihilism of post-industrial, post-modern bourgeois-state-capitalism manufactures.

In fact, in many instances, the logic of capitalism becomes the new moral/amoral imperative, that is, the underlying de facto transcendental truth, when nihilism and delegitimation destroys the possibility of universal values and foundational truths.

When the death of God ushered in emptiness and meaninglessness in socio-economic life, the Money-God readily took God’s place, where today, money is the supreme good…Money…is the real mind of all things. Money … is the bond binding me to human life, binding society to me…[Today,] money is the bond of all bonds … Money…[is] the universal power of society…the invisible divinity…[capable of] the transformation of all human and natural properties into their contraries.¹³

What Nietzsche saw as the on-set of nihilism and the death of God with the advent of modernity and modern civilizations, was according to Marx the product of the devastating effects of the capitalist mode of production. For Marx, nihilism, the death of God, the devaluation of grand-narratives etc. are consequences of the capitalist mode of production. The capitalist mode of production overturned and continues to overturn age old beliefs and values, where “all that is solid melts into air, all that is holy is profaned, and [where] man is …[now] compelled to face with sober senses his real conditions of life…[namely] the need of a constantly expanding market”.¹⁴

For Marx, the advent of nihilism and the devaluation of meta-narratives can be seen as the product of the capitalist mode of production, which continues to erode values, truths and communities in the name of profit and financial relationships:

Commodities are the heavy artillery with which [capitalism] batters down all Chinese walls…[and] compels [us]…on pain of extinction, to adopt the bourgeois mode of production… [Values, beliefs and old communities]…so many fetters… had to be burst asunder [and] they were burst asunder…[so] into their place [could] step free competition.¹⁵

It is in this regard, that with the devaluation of universal truth, God and/or meta-narratives, the logic of capitalism comes to be viewed as the meta-narrative itself, as the global engine for the creation of a global bourgeois-state-capitalist utopia; i.e., the global village, capable in due time of satisfying all human needs and wants across the globe through the adoption of the capitalist mode of production and consumption etc.

Notwithstanding, this is not to say that the death of God, the devaluation of religion and the advent of pluralism was not a good thing, as the capitalist mode of production did wash away many conservative provincial narrow-minded notions and bigotry, which existed prior to the revolutionary effect of capitalism. However, capitalism only replaced these many conservative provincial narrow-minded notions and bigotry, with its own, which all revolve around money, the production of surplus value and the devaluation of everything contradictory to capitalism.

The capitalist mode of production and consumption expands the effects and underlying sense of universal nihilism by destroying stable communities and belief systems through its own imperialism, mass surveillance, financial inequality, war, etc. The goal is that within the emptiness and devastation it creates its own God; i.e., money and profit etc. will take root. Where its carnage exists and permeates, belief in the power of money must alleviate. In a certain sense, mass shootings, terrorism etc. are created and fueled by the meaninglessness and emptiness, that is, the universal nihilism, that the capitalist mode of production and consumption manufactures, both globally and locally, in order the establish money and profit as the only universal values acceptable within post-industrial post-modern global society. These tragic events can be viewed as the product of bourgeois-state-capitalist production and consumption itself, as bourgeois-state-capitalism increasing becomes a meta-narrative and exercises itself as a meta-narrative, wherever the capitalist mode of production and consumption dominates, permeates and concentrates.

In consequence, the logic of capitalism readily fills the emptiness of nihilism, an emptiness manufactured by the logic of capitalism itself, through its specific mode of production and consumption. Indeed, the logic of capitalism readily bolsters and exaggerates self-worth, self-esteem, self-image, and self-interest for those individuals that adopt its materialist conception of social status and its materialist imperatives for accumulation. Bound to the logic of capitalism, he or she that accumulates the most material, and he or she that achieves the most bourgeois social status is the most revered, the most honored, the most exemplary of accolades and merit, and the most worthy of emulation within the bias meritocracy of post-industrial post-modern bourgeois-state-capitalism.

Contrary to the logic of capitalism and its manufactured proponents, everything else and everyone else is nonsensical, naïve, empty, false, illogical and lacking any verity. Plurality is the mechanism by which the meta-narrative of bourgeois-state-capitalism fends off all criticisms, critiques and/or challenges to its all-encompassing mode of production and consumption. It accepts plurality in all cultural domains; but hypocritically and fiercely, denies all financial socio-economic pluralities in economics and the economy, where its dominion reigns. Other logics and other modes of production and consumption such as socialism or anarchism, are not allowed to exist or to be tested. Under the meta-narrative of post-industrial post-modern bourgeois-state-capitalism, cultural plurality is championed due to its profitability, and economic plurality is denigrated and vehemently suppressed with totalitarian force. For according to Marx:

The capitalist process of production…[must be] seen as a total, connected process; i.e., a process of reproduction, [which] produces not only commodities, not only surplus value, but also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-laborer.¹⁶

Bourgeois-state-capitalism stands and falls with the capital-relation. The capital-relation is the lynch-pin of bourgeois-state-capitalism. It is this exploitative-relation by which bourgeois-state-capitalism sustains and reproduces its dominion over the population, and over time and space. As a result, socio-economic-plurality; i.e., alternative-socio-economic-formations etc., are antithetic to the fundamental capital-relation at the heart of bourgeois-state-capitalism and thus must be destroyed, denied and/or marginalized by any means necessary and at any cost. Bourgeois-state-capitalism can tolerate plurality in all spheres; i.e., the gender sphere, the racial sphere, the age-sphere, the religious sphere etc., but it cannot tolerate plurality in the socio-economic sphere, where its central logic; i.e., the logic that enshrines the capital-relation and which seeks to expand this relation, functions, operates and resides. In this regard, plurality, which is constantly utilized by neo-liberals everywhere, is, in essence, a means to fend-off and short-circuit all socio-economic alternatives to the totalitarian meta-narrative of bourgeois-state-capitalism.

The proponents of bourgeois-state-capitalism readily acknowledge and propagate the delegitimization of meta-narratives in the name of plurality when it serves their own mercenary goals, yet they continually refuse and suppress plurality across the economy and in the socio-economic sphere because these alternatives are antithetical to the basic logic of bourgeois-state-capitalism, namely profit and surplus value. Furthermore, the proponents of bourgeois-state-capitalism even refuse to acknowledge that bourgeois-state-capitalism is a meta-narrative, a meta-narrative of emancipation, lacking universal and foundational verity in Nietzschean terms, other than the fact that for the logic of capitalism, might always equals right and the just. According to Nietzsche, when universal truth is lacking, the will to power decides as “every specific body strives to become master over all space and to extend its force, its will to power, and to thrust back all that resists its extension”.¹⁷ The logic of capitalism is the current context of the will to power, which attempts through the logic of capitalism to extend its dominion over the whole world through force, coercion, swindle, manipulation, expropriation, dispossession, displacement and war etc. The aim is to transform and subjugate all differences and all pluralities into commodities, surplus value and capital-relations; i.e., the exact logical specifications and necessities of the logic of capitalism. Pluralism is only accepted and tolerated for the extraction and accumulation of surplus value. In the end, the logic of capitalism will stifle and obliterate all pluralities if those pluralities are antithetical to its basic grounding relation, namely the profitable capital-relation.

No longer contingent on grand-narratives except that the grand narrative of bourgeois-state-capitalism, price, value and wage determinations are now based on theories of conceptual-commodity-value-management, in the sense that whatever one can get away with, is acceptable and valid, whatever price, value and wage can be thought of, sustained and solidified in the marketplace is legitimate and valid. In the context of the meta-narrative of post-industrial post-modern bourgeois-state-capitalism, theories of conceptual-commodity-value-management come to be viewed as the necessary methodology for maximizing profit by any means necessary at the lowest financial cost as soon as possible. Due to the fact that these theories, permit an individual to leave behind, according to Nietzsche, “the naiveté of our ideals”¹⁸, ideal notions such as fairness, equality, unity, justice, democracy, reason, rational labor theories of value etc., in favor self-interest and the arbitrary whims of whatever one can get away with.

Theories of conceptual-commodity-value-management permit the extension of the capital-relation without recourse to rationality or rational explanation. These theories give voice, expression and definition to the will to power, by basing price, value and wage on arbitrary whims and the insatiable desires of those who rule in the name of bourgeois-state-capitalism. As Marx states, in the Economic and Philosophic Manuscripts of 1844, under unfettered capitalism, “the life of the worker depends on the whim of the rich and the capitalist”.¹⁹ And this is true in contemporary society more than ever, as the rich and the capitalist embrace the relativism of post-modernity and the arbitrariness of theories of conceptual-commodity-value-management to machinate prices, values and wages in their favor in order to meet the demands of the logic of capitalism and most importantly, their own personal mercenary desires. This explains the increasing financial inequality within post-modern post-industrial bourgeois-state-capitalism as the 1% increasingly extort greater and greater portions of money, capital and private property across the globe at the expense of the 99%.

More importantly, theories of conceptual-commodity-value-management explain the continual rise of prices even as costs of production in general continue to decrease and/or are at an all-time low within contemporary bourgeois-state-capitalism. For example, according to Marx, prices should drop when the cost of production drops, although prices do not drop to the extent that the cost of production drops.

As Marx states:

With competition among capitalists…[a] capitalist can drive the other[s] from the field and carry off his capital only by selling more cheaply. In order to sell more cheaply without ruining himself, he [the capitalist] must produce more cheaply…Moreover he attains the object he is aiming at if he prices his goods only a small percentage lower than his competitors. He drives them off the field, he wrests from them at least a part of their market, by underselling them.²⁰

However, this is not the case within contemporary bourgeois-state-capitalism, even as cost of production decreases, by moving factory production overseas, for example, which should lower prices in general, the inverse is happening with prices as prices continue to rise in general. For example, the automotive-industry, in the last 40 years, has introduced robotic-technology within its production process, which according to Marx, they did in order to lower their cost of production. As he states “the productive power of labor is increased above all by…. the constant improvement of machinery”.²¹

However, according to Marx, this lowering of the cost of production should have resulted in lower car prices in general, but it did not. In fact, the opposite is the case. In fact, the technology utilized to mechanize the assembly-line process which was designed to render a great portion of the manufacturing sector obsolete and out of work in order to lower production-costs and make automotive companies more competitive on the international auto-market etc., instead of creating lower auto-prices as Marx predicted, robotic-technology produced the opposite, higher and higher auto-prices. Contrary to Marx’s prediction that when “competing capitalists introduce the same machines, the same division of labor etc…price is lowered”²², in contrast, within contemporary bourgeois-state-capitalism, prices remain stable and/or continue to rise. Prices remain stable and/or continue to rise, even as cost of production continue to drop, because the automotive industry today functions and operates according to a different theory of value and surplus value, that is, a theory of conceptual-commodity-value-management.

Only theories of conceptual-commodity-value-management stationed at the heart of an industry, which has jettisoned all modern rational labor theories of value and surplus value, are capable of driving cost of production down simultaneously as they are driving profits and prices up. Theories of conceptual-commodity-value-management are post-modern value theories that are solely based on conceptual-perception and the will to power, the will to machinate prices, values and wages, both conceptually through the influence of public perception and practically through various collusionary practices that exclude competition and enable artificial price fixing. According to the theory of conceptual-commodity-value-management, the determining principle of prices, values and wages is based on what an enterprising alliance and/or a captain of industry can get away with. What an enterprising alliance and/or a captain of industry can get away with is legitimate and valid, because it satisfies the requirements of the logic of capitalism, that is, the maximization of profit by any means necessary at the lowest financial cost as soon as possible.

First and foremost, theories of conceptual-commodity-value-management are able to drive cost of production down simultaneously as they drive prices/profits up by short-circuiting competition among capitalists, competition that Marx predicted would drive prices down. These theories once stationed at the heart of an industry promote networking; i.e., collusionary and exclusionary practices within an industry and among capitalists via industry-conferences, government-networking, cartel-like alliances, friendships etc., which result in specific markets being turned into oligopolies, where artificial prices, values and wages are set by enterprising alliances, who stringently control commodity-circulation, price-ranges, wage-ranges etc. within the oligarchized market.

Secondly, theories of conceptual-commodity-value-management are able to drive cost of production down simultaneously as they drive prices/profits up by short-circuiting outdated modern rational labor theories of value and surplus value, in favor of post-industrial post-modern theories of value and surplus value, that is, theories of conceptual-commodity-value-management, where prices, values and wages are, in fact, based on the arbitrary whims of capitalists; i.e., where prices, values and wages are determined by what an oligarchical enterprising alliance can get away with in the marketplace and within society in general. These post-modern theories of value and surplus value, are based on the gravitational force of a network to establish and set prices, value standards and wage-grids, whose rational foundation is subjective, relative and in many instances based on nonsense and fancy, but nonetheless is couched in legitimacy due to the controlling force of the ruling network-formation within a specific industry and market.

As a result, within post-industrial post-modern bourgeois-state-capitalism, prices, values and wages are increasingly the product of social construction; i.e., the machinations of enterprising alliances etc., who measure and set prices, values and wages according to their own agreed upon arbitrary determinations. Whether it is an epi-pen crisis, bogus price hikes, arbitrary price evaluations, reality star salaries, insurance policies, bank fees, mortgage rates etc., it is the strength of the ruling network-formation within a profession, a market, a financial institution etc. that establishes prices, values and wages based not on any legitimate rational ground, but on the whim and conceptual-perceptions of those alliances who possess oligarchical force and can use that force to establish price, value and wages over an extended period of time and space.

Of course, the power of money veils this collusion, since the power of money according to Marx, is its ability to confound and/or overturn anything into its contrary. As Marx states:

Money is the universal confounding and overturning of things…[This is] the divine power of money. That which I am unable to do as a man, and of which therefore all my individual essential powers are incapable, I am able to do by means of money…It converts my wishes from something in the realm of imagination…to life…[It is] the common medium and faculty for turning an image into reality and reality into a mere image…Money transforms…fidelity into infidelity, love into hate, hate into love, virtue into vice, vice into virtue, servant into master, master into servant, idiocy into intelligence and intelligence into idiocy. Money…[is] the world upside-down—the confounding and compounding of all qualities.²³

Money veils, confuses and/or overturns the hidden exclusionary and collusionary practices of enterprising alliances, captains of industry and oligarchical-networks. It transforms their sly whimsical practices into seemingly legitimate fair-minded rational outcomes, derived from level-headed decision-making. Theories of conceptual-commodity-value-management via the circulation of money appear acceptable, legitimate and rational, which are able to produce equitable financial practices that reflect democratically fair market values, prices and wages. In fact, it is the contrary. The power of money, which is derived from its centralized position both as the universal means of exchange and as the universal measurement of value, clouds the dubious financial practices stemming from theories of conceptual-commodity-value-management with an aura of legitimacy and level-headedness. Through the power of money, what is collusion and unfair is now accidental and fair, seemingly the outcome of autonomous market mechanisms which no one can truly predict, influence and/or control, thus no one is responsible or ever single-handedly at fault.

It is in this regard that every financial crisis, from the great depression to the great recession of 2008 appear as giant unplanned accidents and unexpected ill-fated calamities, where everyone, despite possessing the very best intentions and principles, are both simultaneously culpable and blameless. Hence, why the money-aristocracy and the capitalist-state always frame these financial calamities as a series unfortunate events caused by autonomous market mechanisms, whose grave costs, we, as citizens, must bare together as one. No one is truly responsible; therefore, no one should have to single-handedly bare the financial cost. The money-aristocracy and the capitalist-state, enshrined by theories of conceptual-commodity-value-management and the meta-narrative of bourgeois-state-capitalism, who readily preach the global-ethic/amorality of capitalism and the eventual overcoming of all ills and unsatisfied human needs through democratic-state-capitalism, nonetheless, hypocritically call for a suspension of self-interest, money-worship and the return of a brotherhood of men and women after all financial crises. Indeed, during such events, the world is truly turned upside-down, as the money-aristocracy itself, in an ironic twist of fate, invariably shouts, loud and clear, with earnest impatience, in an effort to alleviate their financial losses through government reprieves and bail-outs, “Working Men [and Women] Of All Countries, Unite!”²⁴

Bibliography:²⁵

Jean-Francois Lyotard, The Post-Modern Condition, Trans. Geoff Bennington and Brian Massumi (Minneapolis: University of Minnesota Press, 1984) xxiv. []
Friedrich Nietzsche, The Will To Power, Ed. Walter Kaufmann (New York, New York: Vintage Books, 1967) 331. []
Ibid, 331. []
Jean-Francois Lyotard, The Post-Modern Condition, Trans. Geoff Bennington and Brian Massumi (Minneapolis: University of Minnesota Press, 1984) 39. []
Max Weber, The Protestant Ethic and the Spirit of Capitalism, Trans. Talcott Parson (New York: Routledge, 2001) 123. []
Friedrich Nietzsche, The Will To Power, Ed. Walter Kaufmann (New York, New York: Vintage Books, 1967) 12-13. []
Ibid, 545. []
Ibid, 528. []
Ibid.13. []
Ibid.13 []
Jean-Francois Lyotard, The Post-Modern Condition, Trans. Geoff Bennington and Brian Massumi (Minneapolis: University of Minnesota Press, 1984) 43. []
Michel Luc Bellemare, The Structural-Anarchism Manifesto: (The Logic of Structural-Anarchism Versus The Logic of Capitalism), (Montréal: Blacksatin Publications Inc., 1916) 29. []
Karl Marx, Economic and Philosophic Manuscripts of 1844, Ed. Martin Milligan (Mineola, New York: Dover Publications Inc., 2007) 139. []
Karl Marx, “Manifesto of the Communist Party,” The Marx-Engels Reader, ed. Robert C. Tucker (New York, New York: W.W. Norton & Company, Inc., 1978) 476. []
Ibid. 477-478. []
Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London Eng.: Penguin, 1990) 724. []
Friedrich Nietzsche, The Will To Power, Ed. Walter Kaufmann (New York, New York: Vintage Books, 1967) 340. []
Ibid. 22. []
Karl Marx, Economic and Philosophic Manuscripts of 1844, Ed. Martin Milligan (Mineola, New York: Dover Publications Inc., 2007) 21. []
Karl Marx, Wage Labor and Capital, (New York, New York: International Publishers, 1976) 40-41. []
Ibid. 40-41. []
Ibid. 42. []
Karl Marx, Economic and Philosophic Manuscripts of 1844, Ed. Martin Milligan (Mineola, New York: Dover Publications Inc., 2007) 139-141. []
Karl Marx, “Manifesto of the Communist Party,” The Marx-Engels Reader, ed. Robert C. Tucker (New York, New York: W.W. Norton & Company, Inc., 1978) 500. []
Bellemare, Michel Luc. The Structural-Anarchism Manifesto: (The Logic of Structural-Anarchism Versus The Logic of Capitalism). Montréal, Canada: Blacksatin Publications Inc., 2016.

Marx, Karl. Capital Volume One. Trans. Ben Fowkes. London Eng.: Penguin, 1990.

Marx, Karl. Economic and Philosophic Manuscripts of 1844. Ed. Martin Milligan. Mineola, New York: Dover Publications Inc., 2007.

Marx, Karl. “Manifesto of the Communist Party.” The Marx-Engels Reader, ed. Robert C. Tucker. New York, New York: W.W. Norton & Company, Inc. 1978. 203-217.

Marx, Karl. Wage Labor and Capital. New York, New York: International Publishers, 1976.

Lyotard, Jean-Francois. The Post-Modern Condition: (A Report on Knowledge). Minneapolis, Minnesota: University of Minnesota Press, 1984.

Nietzsche, Friedrich. The Will To Power. Ed. Walter Kaufmann. New York: Vintage Books, Random House, 1967.

Weber, Max. The Protestant Ethic and the Spirit of Capitalism. Trans. Talcott Parson. New York: Routledge, 2001. []

Michel Luc Bellemare is the author of The Structural-Anarchism Manifesto: (The Logic of Structural-Anarchism Versus The Logic of Capitalism) Read other articles by Michel Luc.

This article was posted on Friday, October 21st, 2016 at 6:04pm and is filed under Capitalism, Communism/Marxism/Maoism, Corporate Globalization,Philosophy.

Failure by Design: The Story Behind America’s Broken Economy

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Tue, 11 Oct 2016 14:23:00 +0000

Economic
Policy
Institute

Failure by DesignThe Story Behind America’s Broken Economy

Book • By Josh Bivens •

In Failure by Design, the Economic Policy Institute’s Josh Bivens takes a step back from the acclaimed State of Working America series, building on its wealth of data to relate a compelling narrative of the U.S. economy’s struggle to emerge from the Great Recession of 2008. Bivens explains the causes and impact on working Americans of the most catastrophic economic policy failure since the 1920s.

As outlined clearly here, economic growth since the late 1970s has been slow and inequitably distributed, largely as a result of poor policy choices. These choices only got worse in the 2000s, leading to an anemic economic expansion. What growth we did see in the economy was fueled by staggering increases in private-sector debt and a housing bubble that artificially inflated wealth by trillions of dollars. The bursting of the housing bubble had disastrous consequences for the broader economy, spurring a financial crisis and a rise in joblessness that dwarfed those resulting from any recession since the Great Depression. The fallout from the Great Recession makes it near certain that there will be yet another lost decade of income growth for many families, whose incomes had not been boosted by the previous decade’s sluggish and localized economic

In its broad narrative of how the economy has failed to deliver for most Americans over much of the past three decades, Failure by Design also offers compelling graphical evidence on jobs, incomes, wages, and other measures of economic well-being most relevant to low- and middle-income workers. Bivens tracks these trends carefully, giving a lesson in economic history that is readable yet rigorous in its analysis. Intended as both a stand-alone volume and a companion to the new State of Working America website that presents all of the data underlying this cogent analysis, Failure by Design will become required reading as a road map to the economic problems that confront working Americans.

List of Figures

Foreword

The Great Recession: The damage done and the rot revealed

The Great Recession’s Trigger: Housing bubble leads to jobs crisisFallout: the job-market
Fallout: broader measures of economic security, poverty, health insurance, and net wealth

The Policy Response to the Great Recession: What was done, and did it work?The dynamics of the Great Recession
Recovery Act controversies: what was in it?
Recovery Act controversies: did it work at all?
Recovery Act controversies: why has consumer and not government spending led the recovery?

The Great Recession Ended More Than a Year Ago So, “Mission Accomplished”?Apathy, not overreach
Exchange rate policy
Monetary policy
Fiscal policy
Clear economics, fuzzy politics

The Cracked Foundation Revealed by the Great RecessionFalling minimum wage
Assault on workers’ right to organize
Global integration for America’s workers and insulation for elites
The rise of finance
Abandoning full employment as a target
You get the economy you chooseIncomes in the 30 years before the Great Recession: growing slower and less equal
Is everybody getting richer but the rich are just getting richer faster?
Why have typical families’ incomes and overall economic growth de-linked?
The arithmetic of rising inequality: falling wage growth for most American workers The economics of rising inequalityLower wage growth did not buy greater economic security or sustained progress in closing racial gaps
How did American families cope with lower wage-growth and rising insecurity?

See related work on Economic Growth

Tax Cuts Didn’t Lead to Faster Growth

February 11, 2015 | By Josh Bivens | Economic Snapshot
The Stakes are High at the Fed

November 16, 2014 | By Josh Bivens | Blog
Why America’s Workers Need Faster Wage Growth—And What We Can Do About It

August 27, 2014 | By Elise Gould | Report
How to Raise Wages: Policies That Work and Policies That Don’t

March 19, 2015 | By Lawrence Mishel and Ross Eisenbrey | Report
From free-fall to stagnation: Five years after the start of the Great Recession, extraordinary policy measures are still needed, but are not forthcoming

February 14, 2013 | By Josh Bivens, Heidi Shierholz, and Andrew Fieldhouse | Report

Here’s the Secret Truth About Economic Inequality in America

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Thu, 29 Sep 2016 15:56:00 +0000

TIME

BUSINESS ECONOMY

Here’s the Secret Truth About Economic Inequality in America

Rana Foroohar @RanaForoohar

May 12, 2015

Once you look at the issue this way, it's hard to think of it any other way

We all know that inequality has grown in America over the last several years. But the conventional wisdom among conservatives and even many liberals has always been that inequality was the price of growth–in order to get more of it, we needed to tolerate a bigger wealth gap. Today, Nobel laureate Joseph Stiglitz, the Columbia professor and former economic advisor to Bill Clinton, blew a hole in that truism with a new report for the Roosevelt Institute entitled “Rewriting the Rules,” which is basically a roadmap for what many progressives would like to see happen policy wise over the next four years.

There are a number of provocative insights but the key takeaway–inequality isn’t inevitable, and it’s not just a social issue, but also an economic one, because it’s largely responsible for the fact that every economic “recovery” since the 1990s has been slower and longer than the one before. Inequality isn’t the trade-off for economic growth; rather, it’s both the cause and the symptom of slower growth. It’s a fascinating document, particularly when compared to the less radical Center for American Progress policy report on how to strengthen the middle class, authored by another former Clinton advisor, Larry Summers, which was widely considered to set out what may be Hillary Clinton’s economic policy agenda.

While the two have some overlap, the Stiglitz report is bolder and more in-depth. It’s also a much more damning assessment of some of the policy changes made not only during the Bush years, but also during Bill Clinton’s tenure, in particular the continued deregulation of financial markets, changes in corporate pay structures, and tax shifts of the early 1990s. During a presentation and panel discussion on the topic of inequality and how it relates to growth (I moderated the panel, which included other experts like Nobel laureate Bob Solow, labor economist Heather Bouchley, MIT professor Simon Johnson and Cornell’s Lynn Stout, as well as pollster Stan Greenberg), Stiglitz made the point that both Republican and Democratic administrations have been at fault in crafting not only policies that forward inequality, but also a narrative that tells us that we can’t do anything about it. “Inequality isn’t inevitable,” said Stiglitz. “It’s about the choices we make with the rules we create to structure our economy.”

One of the big economic questions in the 2016 presidential campaign will be, “why does inequality matter?” The answer–because it slows growth and thus affects everyone’s livelihood–is simple. But the reasons behind it are complex and systemic. Senator Elizabeth Warren and New York Mayor Bill de Blasio were on hand to help connect the dots on that front, with de Blasio calling for more social action in order to “move to a society that rewards work over wealth,” and Warren re-iterating a hot button point that she made last week about inequality and the trade agenda; she believes that Fast Track trade authority for President Obama would allow big bank lobbyists on both sides of the Atlantic to further water down financial reform that could combat inequality, which led the President to call her ill-informed (he didn’t elaborate much on why). Warren noted that the trade deal was being crafted in conjunction with 500 non-governmental actors, 85 % of whom are either industry lobbyists or from the big business sector.

Warren’s mantra about how America’s economic game “is rigged,” ties directly into two of the key takeaways from the Stiglitz report; first, that inequality is all about the political economy and Washington policy decisions that favor the rich, and secondly, that it’s not one single decision–Dodd Frank, capital gains tax, healthcare, or labor standards–but all of them taken together that are at the root of the problem. “Our economy is a system,” says Stiglitz, and combatting inequality is going to require a systemic approach across multiple areas–financial reform, corporate governance, CEO pay, tax policy, anti-trust law, monetary policy, education, healthcare, and labor law. It might also involve revamping institutions like the Fed; Stiglitz and Solow both agreed that the Fed needs to start tabulating unemployment in a new way, perhaps focusing not on a particular number target, but on when wages actually start to go up, which Stiglitz said is the best sign of when the country’s employment picture is actually improving.

Thinking in these more holistic terms would be a big shift for lawmakers used to tackling each of these issues alone in their respective silos. But as Stiglitz and the other economists on the panel pointed out, they are often interrelated–consider the way in which pension funds work with shareholder “activists” to goad corporations into over-borrowing to make large payouts to investors even as lowered wages and profits kept in offshore tax havens mean that long-term investments aren’t made into the real economy, slowing growth. Or how continuing to tie worker’s healthcare benefits to companies makes them virtual slaves, decreasing their ability to negotiate higher wages, not to mention start their own businesses.

It’s a huge topic, and the Roosevelt discussion was part of the continuing campaign on the far left to try to make sure that presumptive nominee Hilary Clinton doesn’t continue business as usual if and when she’s in the White House. Progressives are looking for her to do more than talk about minimum wage and redistribution; they want her to make fairly radical shifts in the money culture and political economy of our country. That would mean a decided split from the policies of the past, including many concocted by her husband’s own advisors, ghosts that Hilary Clinton has yet to publically reckon with.

“Bloodiest thing the world has seen”: David Cay Johnston on inequality’s looming disaster

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Sat, 03 Sep 2016 13:59:00 +0000

SALON

“Bloodiest thing the world has seen”: David Cay Johnston on inequality’s looming disaster

Pulitzer Prize winner David Cay Johnston tells Salon how America's economic story could end -- and it isn't pretty

ELIAS ISQUITH

David Cay Johnston (Credit: The New Press/Cheryl Amati Martin)

Long before anyone knew the name Thomas Piketty, Pulitzer Prize-winning journalist David Cay Johnston was plumbing the hidden depths of the American tax code, revealing the myriad ways it privileges the interests of corporations and the wealthy ahead of those of the 99 percent. Indeed, while it may sometimes feel as if economic inequality is the new trend, Johnston’s career reminds us that the great gulf that separates the rich from the rest in the contemporary United States didn’t happen overnight, but over a course of decades.

Despite coming out during the same year as “Capital in the Twenty-First Century,” and “The Divide,” Johnston’s newest release, “Divided: The Perils of Our Growing Inequality,” is a different kind of inequality book. Rather than a sweeping overview of centuries of economic history, or an on-the-ground examination of how our justice system ignores the powerful while brutalizing the rest, Johnston’s book is a collection of essays, speeches and excerpts — a kind of inequality reader. Featuring insights from philosophers, economists, journalists, researchers and even politicians, “Divided” reminds us how inequality is one of those rare problems that truly matters to all of us, no matter what our interests or chosen field.

Earlier this week, Salon reached Johnston via telephone to discuss “Divided,” whether American democracy can survive such great economic disparities, and how returning to a more equal society is literally a matter of life and death. Our conversation follows, and has been slightly edited for clarity and length. In addition, Johnston followed up with further thoughts via email.

What inspired you to create this book?

I had done a trilogy on hidden aspects of the American economy, “Perfectly Legal,” which was about how the rich benefit from taxes, “Free Lunch,” about all the subsidies people didn’t know about that go to rich people and corporations, and “The Fine Print,” which was about restraint of trade and monopolies. And in speaking for the last 10 years around the country, one of the things I learned is that people didn’t understand that this isn’t just a function of numbers and whatnot; they didn’t understand there’s a whole structure that affects families, health, healthcare — which are different things — incarceration, opportunity, exposure to environmental hazards, wage theft and so, there was really a need here to give people a broad understanding of, well, “How did this come about, this incredible inequality that we didn’t have in this country until recent years?”

[After the interview, Johnston emailed to add: “My trilogy on the American economy explained many of the little-known, and often deceptive, laws, regulations and official practices. But inequality involves much more than what I had written about in the trilogy. I wanted to provide people with a broad understanding of the issues, ranging from limited opportunity and obstacles to achieving a modicum of prosperity, to the remarkably cruel and thoughtless policies of the Reagan era.”]

In your introductory essay, you make a point of arguing that inequality is not natural, that it’s something we created and, by extensions, we can undo. But what would you say to those who, say, have read their Piketty and are thinking this kind of inequality is endemic to capitalism?

Well, Piketty — whose work I relied on for years and who substantiates a lot of things that I’ve written with his research — argues that the concentration of wealth will just continue and continue and continue. As Herbert Stein, Richard Nixon’s chief economic adviser, famously said, a trend will only continue as long as it can. We will either, through peaceful, rational means, go back to a system that does not take from the many to give to the few in all these subtle ways, or we will end up like 18th century France. And if we end up in that awful condition, it will be the bloodiest thing the world has even seen. So I think it’s really important to get a handle on this inequality. After all, since the end of the Great Recession, one-third of all income increases in this country went to just 16,000 households, 95 percent of it went to the top 1 percent, and the bottom 90 percent’s incomes fell, and they fell by 15 percent. So we need to recognize that there is a very, very serious problem here that has to get addressed. But it won’t just go on forever because if you follow that to its logical absurdity, one person ends up with 90 percent of the wealth in the world. And that’s not going to happen.

[In the aforementioned email, Johnston also followed up on this point, writing: “While I certainly am worried that we could end up in a violent revolution somewhere in the future, sparked by extreme inequality, I’m [an] indictable optimist and believe that [if] the American people have access to explanations and information they will, over the long run, make smart choices.”]

So when you say it will be very bloody, I know you’re speaking of a wild hypothetical to some degree, but do you really think we’re on track for violent social upheaval?

Oh, yes. I’ve written about people on the far right and the far left since the ’60s. Back in the ’60s, I was in the homes of people who built bombs, both left and right. And we live in a country now where we have members of Congress who have either questioned, or ignored questions about, killing the president of the United States. We are seeing all these laws passed allowing people to carry guns openly. We are coming apart as a society, and inequality is right at the core of that. When the 90 percent are getting worse off and they’re trying to figure out what happened, they’re not people like me who get to spend four or five hours a day studying these things and then writing about them — they’re people who have to make a living and get through life. And they’re going to be swayed by demagogues and filled with fear about the other, rather than bringing us together.

When you mention demagogues, are there people currently on the scene that give you a shiver up your spine in that regard, or are you speaking hypothetically?

I think it would be easy for someone to arrive in the near future and really create forces that would lead to trouble in this country. And you see people who, they’re not the leaders to pull it off, but we have suggestions that the president should be killed, that he’s not an American, that Texas can secede, that states can ignore federal law, and these are things that don’t lack for antecedents in America history but they’re clearly on the rise. In addition to that, we have this large, very well-funded news organization that is premised on misconstruing facts and telling lies, Faux News (formerly Fox News), that is creating, in a large segment of the population — somewhere around one-fifth and one-fourth of it — belief in all sorts of things that are detrimental to our well-being. President Theodore Roosevelt said we shall all rise together or we shall all fall together, and we need to have an appreciation of that.

So, no, I don’t see this happening tomorrow, but I have said for many years that … if we don’t get a handle on this then one of these days our descendants are going to sit down in high-school history class and open a textbook that begins with the words: “The United States of America was …” and then it will dissect how our experiment in self-governance came apart. By the way, the Founders were very worried about this. John Adams said his fear was that instead of having yeoman farmers who owned their own land, and workers who owned their own tools and therefore were independent, that we would become a country in which a business aristocracy would arise, and the mass of people would simply work for wages and the business aristocrats would persuade the wage-earners to support those policies that were actually against their interest and favor the business aristocrats and, when that happened, we would lose our liberties and our democracy.

And he wasn’t exactly the proto-lefty bomb-thrower of the group …

No, but Madison and Monroe and Jefferson — there was a lot of concern about this. They were fearful not just of a hereditary aristocracy but a business aristocracy. And I’ve had my research assistants at Syracuse Law working on this for the last two-and-a-half years and there was an abundance of material written in that era that was concerned about extreme inequality. And that’s what we have in America, is extreme inequality.

To turn from how bad things are getting to how we can make them better, I’d like to ask you what solutions you’d like to see people organize around in terms of reducing inequality?

Number one, we’ve got to change the makeup of Congress. The Democrats got 1.4 million more votes than the Republicans [in 2010] but they have a minority [in Congress] because of gerrymandering. So we need to have state legislatures — and we may need a constitutional amendment to make districts evenly divided between the parties — that will get us more centrist candidates rather than extremists on both left and right.

Secondly, we’ve got to restore unions. If you believe in market economics, you’ve gotta believe in unions. Now, unions aren’t perfect, but neither are corporations, or the government or, for god’s sake, the clergy. Unions allow people as a group to negotiate for reasonable pay, and without unions you have big corporations, and individuals who have no bargaining power, such as a lot of unemployed workers. Our competitors all have unions. The Germans even have unions for executives. So we need to get back to unions if we’re going to improve people’s economics.

We need to get people to vote. If the bottom 90 percent voted at the same rate that the top 1 percent do, you would have a different Congress. That’s why you’re seeing efforts to take away the franchise, because the serious professionals in the Republican Party recognize that the demographic trends are going against them, and to stave that off they’ve got to try and deny the franchise to people, which is an extraordinary move, something we haven’t seen since Jim Crow.

We need to have a big enough government to enforce the law. We have not prosecuted any of the “too big to fail” banks and we have a president who has said, Well, these things look awful, but they may not be crimes. I’m sorry — the banksfalsely certified documents … there are plenty of witnesses who have emails and memos they wrote and can testify that they said that this is illegal and wrong and they were told to shut up or were gotten rid of. We have money transferred through the mail and through the wires. That’s all you need to prosecute fraud. And yet, Bill Black, the guy who got us all those convictions in the savings and loan crisis, no one will speak to him. That’s just one example. I have written about all sorts of lawless behavior that’s going on, involving cheating in the real-estate industry, the failure to pay out benefits in the insurance industry, and when you “deregulate” and cut the staffs whose job is to look out for the public, the most cunning and conniving are the beneficiaries.

And this is also true in tax; the wage-earners will be taxed very effectively because it’s all automated. But those people who have very complicated individual or investment or corporate tax portfolios, Congress has cut away the ability to — and put in place rules that make it really impossible to — enforce the laws. So America today has two income taxes separate and unequal, one for wage earners who are thoroughly and efficiently taxed, and one for investors, business owners and corporations, who the government does not have the capacity to properly tax, and therefore are undertaxed, shifting the burden onto the wage earners.

To that point, it’s died down now that the elections are coming up, but there was previously a lot of talk of “tax reform” —

Well, I’ve said repeatedly, there is no discussion in Washington of tax “reform,” a word journalists should use in quotes. There is a lot of talk of shifting the burden of taxes off of corporations and wealthy Americans. But reform means making the system better, and there’s nothing being proposed that’s reform. When Ronald Reagan’s two big tax policy changes were made, there were giant studies by the Treasury where they tried to figure out everything about the effects of this. There’s no serious intellectual work going on about how do we design a tax system for the 21st century.

Let me give you one of my lines on it: America has a tax system that is well-designed and effective for the middle of the 20th century. We now live in the 21st century. We are not a national industrial wage economy — we are a global services/asset economy. Mostly intangible assets. And the tax system does not recognize this. Therefore, it is damaging the economy rather than strengthening and providing for the commonwealth goods and services that are needed for private wealth creation.

Barack Obama has made a point to be seen as sort of like the president who put inequality on the front burner. And you include his speech from 2011 in Osawatomie, Kansas (where Teddy Roosevelt gave his famous “New Nationalism” address), in the book. But at the same time, as you’ve noted, 95 percent of the gains, post-Great Recession, have gone to the tippy-top of the economic pyramid. How do you judge him on this issue?

President Obama understands the broad nature of the problem and he’s right to say this is the issue of our time. But his policies simply reinforce inequality. His policies show that he very much identifies with Wall Street and with its interests. Remember, he was going to put Lawrence Summers in as head of the Federal Reserve, and a whole bunch of people — and I was among them — [said] that this would be a terrible policy mistake, that Janet Yellen is among the group of people who consistently predicted things correctly and gotten it right (and I would count among them Dean Baker, me, Paul Krugman, Joe Stiglitz and a few dozen other people who deal with these issues in public).

The president has consistently sided with Wall Street, whether it’s not prosecuting the criminality which brought down the economy in 2008, or supporting the Trans-Pacific Partnership — which is not about “free trade,” it’s about protecting existing ownership interests against the future. And so he’s just a really good example of where what he says and what he does don’t align. I don’t know the explanation for that. But having watched him very closely, I think it has to do in part with [that] he wants very much to be … the great uniter. And if you’re going to bring about the kind of change I think we need, there’s going to be a lot of divisiveness about it; and he just doesn’t have a stomach for it, it’s not who he is. He’s the “Can we please get along here together?” guy.

Garry Wills once described his approach as “omnidirectional placation.”

That’s a great line … I mean, he’s like the child from the family where the parents fought and that child was the one who’d get the parents to make peace. And he really does identify very heavily with the folks on Wall Street. Here’s [former Treasury Secretary] Timothy Geithner who flat-out cheated — calculated deliberately — on his taxes and lied to Congress about it. And I can tell you that because I replicated his taxes in TurboTax, which was a hell of a lot of work. And I know somebody who was a deep expert/authority who did the same thing. We could not produce, without overriding the system, what he said. And all he had to do to be honorable about this was pay the penalties as well as the taxes and interest. But look at Geithner, look at everything he’s done. Did Geithner do anything for the homeowners who got taken to the cleaners, here? You didn’t have to take out a mortgage to get taken to the cleaners; property values fell for everybody. People who had nothing to do with taking out these bad mortgages were harmed. Now, every single thing you saw Geithner do was to benefit Wall Street. And Obama spoke well of him right to the moment [Geithner] decided to earn his reward and go to work on Wall Street.

Obama was even, before he moved on to not-better Summers, considering nominating Geithner for the Fed.

Yes. I recognize that Obama has been dealt a terrible hand. Ten days after his inauguration in 2009, top Republicans had a meeting and agreed that making him ineffective was their overriding goal. He’s been dealt a terrible hand, here, and in some ways he’s played it well. But on the fundamental issues of what’s driving our inequality, he has not played this at all well.

He has a very deep knowledge of strategic arms, because that’s what he studied when he was in college; [but] I don’t think he has a deeper understanding of economics than your average college graduate, and your average college graduate doesn’t have a very good understanding of economics. Because we live in a society where there’s a dogma: neoclassical economics, particularly the Chicago set. (By the way, I went to the Chicago school, 40 years ago. I’m not an economist but I did go there for two quarters on a fellowship.) There are lots of other economic theories out there and they get no attention because we have this dogma about economics in America.

Now that we seem to be in a moment when the discussion of inequality has gone mainstream, how optimistic are you that this is a problem we’ll actually start to fix in the near- or medium-term future?

We’re still living in the age of Reaganism; that has not come to an end yet. But we now have 33 years of empirical evidence that what Reagan promised didn’t work. If it did, if what Reagan and George W. Bush promised us worked, we would be swimming in jobs today. And we’re not. So I’m afraid, in the short run, what we’re going to see is an effort to shift the blame for this from failed policies to us. The “it’s the 47 percent who are takers” argument that Romney put forth, rather than looking at the structure and the rules that create and reinforce inequality. But this must come to an end and we have to get some changes and what’s missing are leaders who can articulate a new path. A smarter, growth-oriented path that will make us all better off. So Elizabeth Warren, who I’ve known for 25 years, Elizabeth Warren could be that person, but I don’t think she’s going to do it. She wants to focus on fixing what she knows. But we need someone, multiple people, to arise who understands the structure and nature of the problem and can then put it in terms that ordinary people understand before we get real change.

Elias Isquith is a former Salon staff writer.

The Fiscal Myth That’s Killing The Economy, In 7 Steps

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Sat, 13 Aug 2016 00:47:00 +0000

The Fiscal Myth That’s Killing The Economy, In 7 Steps

AUGUST 12, 2016

Richard Eskow

A new economic working paper reinforces an important reality: We need more government spending to repair the economy for millions of working Americans. Unfortunately, our political debate is being held back by an economic myth – one that has yet to be challenged in political debate, despite an ever-growing body of evidence against it.

The paper, by L. John Bivens of the Economic Policy Institute, is called “Why is recovery taking so long – and who’s to blame?”

The myth is called “austerity,” and it can be roughly defined as “the persistent but false belief that government spending cuts are always a good idea.”

Here are seven things about austerity worth knowing:

1. Our current recovery is too slow, and isn’t reaching everybody it should.

As Bivens points out, employment took longer to reach its pre-recession levels this time around than it did in the previous three recovery periods. Perhaps even more significantly, the rate of job creation remained slower after the recession officially ended.

What’s more, the jobs created after the 2009 crisis were weighted heavily toward lower-income professions. Labor force participation for people of working age remains low, even though it has improved somewhat.

And, as the Center for Economic and Policy Research recently reported, the percentage of people who are involuntarily working part-time rather than full-time is 25 percent higher now than it was before the recession.

As CEPR’s Nick Buffie notes, “Over 6 million people are working part-time involuntarily, and on average they work 23 hours per week. Because full-time workers are typically employed 42–43 hours per week, this is effectively a wage cut of almost 50 percent for the affected workers.”

2. The weak recovery affects a lot of full-time workers.

It is not just the unemployed and underemployed who are affected by the weak recovery. Many full-time workers are earning less than they would be if the economy had rebounded at a faster pace, creating more and better jobs than it has.

The American middle class needs a raise. But millions of people won’t get their raises until the economy is stronger and the demand for workers goes up. And demand will remain low until there are more jobs to fill.

3. We know what to do about it.

Government has two tools at its disposal in situations like this: monetary policy and fiscal policy. Monetary policy was promptly deployed after the latest crisis, both to bail out Wall Street and to improve the overall economy. The Federal Reserve should have been more attentive to the Main Street economy, using some of the creativity it used to rescue the financial sector, but it did cut interest rates and that helped.

Unfortunately, fiscal policy, in the form of job-creating government spending initiatives, was used only sparingly at the federal level. Over the past seven years there have been spending cuts at the federal, state and local levels. That’s the opposite of what’s needed, especially in an economy like this one.

As Bivens points out, it’s necessary to increase demand under conditions like those we see today. A simplistic overview of the process: The government creates jobs, the people who get those jobs spend more, the economy’s “pump” is primed and growth follows.

We aren’t talking about radical, far-left ideas here. This approach has been mainstream economic thinking for many decades, and was successfully applied under Democratic and Republican administrations alike.

4. We relied on the myth of austerity instead.

But recent years have seen the rise of different ideas – ideas that were tended and nurtured by right-wing institutions like the Peterson Foundation, and by conservative economic thinkers too numerous to mention. “Austerity economics” – the belief that governments can cut their way to growth – became conventional thinking in the halls of academe and the halls of power. It is obsessed with deficit spending, to the exclusion of other concerns that are often more pressing.

Austerity-driven cuts have hurt the U.S. economy. Austerity’s done even more damage in Europe. When the global financial crisis of 2008 struck, multilateral decision-makers (including the European Central Bank and the International Monetary Fund, or IMF) imposed a harsh austerity regimen on Greece and other struggling European economies. The result, as we now know, was disastrous.

To its credit, the IMF conducted an internal review of its actions during this period. The report found that IMF officials ignored a number of warning signs and had a “strongly optimistic bias” about the effects of austerity. The report also agreed with an earlier investigation that found “a high degree of groupthink, intellectual capture … and incomplete analytical approaches.”

That’s pretty much what happened here, too.

The crisis of 2008, and the events that followed, disproved austerity economics and other hallmarks of conservative economic thought. But it remains popular in powerful circles – perhaps because, as Upton Sinclair said (in the gendered language of his time): “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

5. It’s mostly a Republican problem …

Despite ample evidence to the contrary, Republicans remain steadfast in their opposition to government spending – even for government jobs like teaching, firefighting, and emergency management.

As Bivens explains:

“We are enduring one of the slowest economic recoveries in recent history, and the pace can be entirely explained by the fiscal austerity, particularly with regard to spending, imposed by Republican policymakers, members of Congress primarily but also legislators and governors at the state level.”

The Republican Congress can even take much of the blame for state-level spending cuts, since transfers from the federal government account for more than 20 percent of state and local spending.

Bad economies aren’t an act of God. They are a result of human action – or inaction.

6. … but a lot of Democrats have bought into the myth, too.

A number of top Democrats echoed the rhetoric of austerity, too. That led to weaker political support for the spending we needed, and probably clouded the judgment of Democratic leaders when it came time to make the case for needed spending increases.

President Obama spent far too much time fighting for a “grand bargain” on spending with congressional Republicans that was rooted in austerity thinking, and too little time challenging that thinking. He also had the habit, especially in his first term, of echoing the false economic tropes of the austerity crowd by saying things like “just like every family in America … the Federal government has to live within its means …”

National budgets don’t work like family budgets at all – that is, unless the family in question issues its own sovereign currency.

There are strong hints of austerity-oriented thinking in Hillary Clinton’s rhetoric, too. That puts her at odds with enthusiastic backer Paul Krugman, who wielded a poison pen on her behalf during the Democratic primaries but is currently making the case for borrowing and spending.

Austerity thinking was highlighted at last month’s Democratic National Convention when Gene Sperling, a senior economic advisor to former presidents Clinton and Obama, was featured in a humor-oriented anti-Trump video produced by “Funny or Die.” Whether or not hilarity ensues must remain a matter of personal opinion, but the video clearly relies on austerity economics – specifically, an exaggerated fear of deficits – to scare viewers.

There has never been a better time for the federal government to borrow money and invest in the economy. It can obtain very low interest rates, the economy would respond very well to job creation, and we urgently need to spend money on repairing and expanding our national infrastructure. (The American Society of Civil Engineers says we need to spend $3.6 trillion by 2020.)

7. We need a national debate about austerity economics.

Hillary Clinton has proposed modest levels of infrastructure investment and other government spending – modest, but better than nothing. President Obama put forward similar spending proposals. But these proposals suffer from a fatal flaw that renders them useless in today’s climate: They’re too large to get past the Republicans in Congress and too small to change the political debate.

Democrats have not directly challenged Republicans on government’s proper role in the economy. Too often, they have tried to co-opt the rhetoric (and sometimes the policies) of austerity instead.

Republicans, on the other hand, offer a clearly articulated and internally coherent (if utterly fallacious) economic perspective. Democrats can also offer a coherent perspective, too – one with the added advantage of having been proven by experience. That perspective can make life better for millions of people.

This is the economic debate this country needs. But we won’t get it until someone challenges austerity economics and the conservative philosophy behind it – directly, unambiguously and fearlessly.

37 Facts About How Cruel This Economy Has Been To Millions Of Desperate American Families

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Thu, 11 Aug 2016 01:05:00 +0000

Global Research

37 Facts About How Cruel This Economy Has Been To Millions Of Desperate American Families

By The Economic Collapse

Global Research, March 20, 2016

The Economic Collapse and Global Research 28 October 2012

Region: USA

Theme: Poverty & Social Inequality

First published in October 2012

Have you ever laid in bed awake at night with a knot in your stomach because you didn’t know how your family was possibly going to make it through the next month financially? Have you ever felt the desperation of not being able to provide the basic necessities for your family even though you tried as hard as you could? All over America tonight, there are millions of desperate families that are being ripped apart by this economy. There aren’t nearly enough jobs, and millions of Americans that actually do have jobs aren’t making enough to even provide the basics for their families.

When you have tried everything that you can think of and nothing works, it can be absolutely soul crushing. Today, one of my regular readers explained that he was not going to be online for a while because his power had been turned off. He has been out of work for quite a while, and eventually the money runs out. Have you ever been there? If you have ever experienced that moment, you know that it stays with you for the rest of your life. If you are single that is bad enough, but when you have to look into the eyes of your children and explain to them why there won’t be any dinner tonight or why they have to move into a homeless shelter it can feel like someone has driven a stake into your heart. In this article you will find a lot of very shocking economic statistics. But please remember that behind each statistic are the tragic stories of millions of desperately hurting American families.

Over the past decade, things have steadily gotten worse for American families no matter what our politicians have tried. Poverty and government dependence continue to rise. The cost of living continues to go up and incomes continue to go down. It is truly frightening to think about what this country is going to look like if current trends continue.

The following are 37 facts that show how cruel this economy has been to millions of desperate American families…

1. One recent survey discovered that 40 percent of all Americans have $500 or less in savings.

2. A different recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.

3. In the United States today, there are close to 10 million households that do not have a single bank account. That number has increased by about a million since 2009.

4. Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.

5. The number of Americans living in poverty has increased by about 6 million over the past four years.

6. Median household income has fallen for four years in a row. Overall, it has declined by more than $4000 over the past four years.

7. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.

8. According to a survey conducted by the Pew Research Center, 85 percent of middle class Americans say that it is more difficult to maintain a middle class standard of living today than it was 10 years ago.

9. In the United States today, 77 percent of all Americans are living to paycheck to paycheck at least some of the time.

10. In the United States today, more than 41 percent of all working age Americans are not working.

11. Since January 2009, the “labor force” in the United States has increased by 827,000, but “those not in the labor force” has increased by 8,208,000. This is how they have gotten the unemployment numbers to “come down”.

12. Sadly, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

13. Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.

14. Right now, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

15. At this point, less than 25 percent of all jobs in the United States are “good jobs”, and that number continues to shrink.

16. There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.

17. According to USA Today, many Americans have actually seen their water bills triple over the past 12 years.

18. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

19. In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.

20. Health insurance premiums rose faster than the overall rate of inflation in 2011 and that is happening once again in 2012. In fact, it has been happening for a very long time.

21. According to one recent survey, approximately 10 percent of all employers in the United States plan to drop health coverage when key provisions of the new health care law kick in less than two years from now.

22. Back in 1983, the bottom 95 percent of all income earners had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.

23. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

24. Total consumer debt in the United States has risen by 1700 percent since 1971.

25. Recently it was announced that total student loan debt in the United States has passed the one trillion dollar mark.

26. According to one recent survey, approximately one-third of all Americans are not paying their bills on time at this point.

27. Right now, approximately 25 million American adults are living at home with their parents.

28. The percentage of Americans that find that they are able to retire when they reach retirement age continues to decline. According to one new survey, 70 percent of middle class Americans plan to work during retirement and 30 percent plan to work until they are at least 80 years old.

29. The U.S. economy lost more than 220,000 small businesses during the recent recession.

30. In 2010, the number of jobs created at new businesses in the United States was less than half of what it was back in the year 2000.

31. Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero. By 2010, that figure had soared to 32.5 percent.

32. Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.

33. In the United States today, somewhere around 100 million Americans are considered to be either “poor” or “near poor”.

34. In October 2008, 30.8 million Americans were on food stamps. Today, 46.7 million Americans are on food stamps.

35. Approximately one-fourth of all children in the United States are enrolled in the food stamp program.

36. Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government. And that does not even count Social Security or Medicare.

37. According to the U.S. Census Bureau, an all-time record 49 percent of all Americans live in a home where at least one person receives financial assistance from the federal government. Back in 1983, that number was less than 30 percent.

What makes all of this even more frightening is that many homeless shelters and food banks around the nation are so overloaded at this point that they are already over capacity. Just consider this example…

When Janice Coe, a homeless advocate in Loudoun County, learned through her prayer group that a young woman was sleeping in the New Carrollton Metro station with a toddler and a 2-month-old, she sprang into action.

Coe contacted the young woman and arranged for her to take the train to Virginia, where she put the little family up in a Comfort Suites hotel. Then Coe began calling shelters to see who could take them.

Despite several phone calls, she came up empty. Coe was shocked to learn that many of the local shelters that cater to families were full, including Good Shepherd Alliance, where Coe was once director of social services.

“I don’t know why nobody will take this girl in,” Coe said. “The baby still had a hospital bracelet on her wrist.”

Keep in mind that Loudoun Country is smack dab in the middle of one of the wealthiest areas of Virginia.

So if things are that bad in the wealthy areas, exactly how bad are things getting in many of the poorer areas?

Unfortunately, things continue to get worse for this economy. DuPont has just announced plans to eliminate 1,500 jobs. There are more major layoff announcements almost every single day. So how bad will things get when our crumbling economic system finally collapses? When kind of chaos will be unleashed all over the nation when millions upon millions of Americans finally lose all hope?

In the introduction to this article, I mentioned that one of my regular readers has had his lights turned off. The following is how he described his situation…

No gas, no water, no electricity at my house. Couldn’t pay the bills. I’m broke. Desperately searching for any means of income, or at least enough cash to get the juice (electricity) restored.

Typing this missive in a dark house using the battery on my laptop. Feels like I’m camping out at home. Hope to get this situation fixed tomorrow… somehow. Needless to say, I *…. hate this.

I was ready for this, but it is still a major league inconvenience. For those of you who DO have power, etc. – and are not ready… oh brother. You need to get ready. Seriously, you do. Because what I’m going through is just an inconvenience. It may someday be a normal occurence. Ugh. (expletives deleted)

Hopefully a way can be found to get his situation turned around, but the truth is that there are tens of millions of other similar stories out there in America today.

What about you? What are things like in your neck of the woods? Please feel free to share your thoughts below…

The original source of this article is The Economic Collapse and Global Research

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The Long Shadow of the Hegemon

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Wed, 10 Aug 2016 15:36:00 +0000

The Long Shadow of the Hegemon

by Denis A. Conroy / August 4th, 2016

There is no place in the world anymore that is immune to the presence of hegemonic forces. Money and technology are the main ingredients that influence our beliefs, our tastes and our perceptions of what social values should mean. In becoming consumers, we are co-opted into cultural norms that validate the dominant ideology. Since being force-fed that praxis of knowledge, better known as neoconservative-ideological-gruel to justify ideological expropriation of wealth, a rancid deceit wrapped in dubious economics has plagued us for decades. We have been sold an economic status quo as something natural and inevitable, perpetual and beneficial for everyone, rather than as an artificial social construct that benefits only the ruling class. Worst of all, the system that now owns us also owns our imagination. Too many of us feel that we are not part of the system anymore… and it’s the issue most central in this election year in America.

In a void, no one could say why a thing once set in motion should stop anywhere; or why ‘here’ or ‘there’ could be of matter, if filling-the-void is the purpose of the game. A thing will either be at rest or move ad infinitum, unless something more powerful gets in its way. What might that more powerful thing be, that could free us from the banality of our mechanical culture? The mechanics of the Punch & Judy show, or the Hillary & Donald show, have been set in motion and have become American ‘slapstick’ writ large, with the puppeteers firmly in control of both candidates. Cue to understanding the Punch & Judy show and how it works is to recognise that it’s the ‘slapstick’ Punch carries, a stick as large as himself, which he freely uses upon most of the other characters in the show to achieve supremacy over them. Sound familiar, does it? It’s American Foreign Policy to a tee and it’s ‘exceptionality’, without a doubt…but how ignoble! Given that it is bullying that best identifies American Foreign Policy, the Punch & Judy fiasco or the Hillary & Donald debacle, show a close affinity with Pennsylvania Avenue & Wall Street designs.

The Punch & Judy Show replicates American Foreign Policy in many ways. The party inflicting violence and punishment on the smaller country with impunity possesses the biggest ‘slapstick’. In order to achieve its place in the world as the dominant hegemon, the bully resorts to extremes of violence and punishment, justifying its actions in classic American crusader shtick as it goes. Rightly speaking, there is really no American Foreign Policy other than the one that uses the ‘slapstick’…or air power and WMD’s as is the case here… enabling American interests to spread like a suffocatingly cancerous sludge across the globe.

What is not addressed by either candidate in this year’s Presidential election is the horror of American Foreign Policy and how it has wrought havoc in the Muslim world. Policies co-authored in Tel Aviv, where ‘slapstick’ sees to it that Israelis can have a state and Palestinians cannot. America, the land of Milk & Money is in the hands of those who know how to…invisibly…manage the puppets that serve the cause of Perpetual War & Zion. For the rest of us, there is alternative media to explain what is happening under OUR watch.

Domiciled in regional Ballarat, Australia, the hegemonic force, in micro terms, happens to be a mega Warehouse where consumers are given every opportunity to fulfill their shopping needs. There is nothing that gets in the way of functionality. While making their purchases, customers are regaled with frills and frippery; a stopover at Fuelers Underground Car Club Show offers full-spectrum cooking-oil aromas to amplify the BBQ experience; you can also attend a ‘How to Install & Replace-A-Lock’ demo if you so choose; Art Class Workshops for kids are a must (for some), or you can simply attend a Project-Advise-Group to avoid a vacuum creeping into your life. But above all, the most prized items marching out the doors of ‘Aladdin’s cave’ are the large-size flat TVs that can monitor the vagaries of the status quo for the average Jane or Joe.

Given the mechanics of the consumerist society, there is little likelihood of anything getting in the way of the status quo as we know it. This conclusion was reached when waiting in a veterinary clinic to have my Silky Terrier ‘Girlie’ examined for a sexually transmitted disease. The eight other people in the waiting room were all women, tending toward vintage, mutely gazing at a very large flat tele-screen projecting the image of Hillary Clinton in white pantsuit at the Democratic Convention. Sounding like an elocution teacher about to accept a trophy on behalf of the entire Western World, Hill was there to thrill the faithful. It was a perfect illustration of television’s global hegemonic reach: television to saturate the entire global population in vanities that eschew substance so as to keep us moving on to nowhere — the American narrative ad infinitum?

Were these women a random sample of how worldwide audiences uncritically consume news bulletins where American accents fill the void with expert opinions on what is wrong with the world we live in and how it should be interpreted by Americans…only? They seemed to respond to the messages coming from the ubiquitous tele-screen as bored accomplices might, exhibiting respectful deference to the hegemon that helps fill the erstwhile time vacuum. What to do with time being the real challenge. As vassals of the American Empire, we Australians need to keep in touch with what is happening under every President’s watch. We have to keep watching because we could have a repeat of the Cuban missile crisis in our own very backyard, if American gung-ho militarism chose to come our way.

The stocky dog next to me had been licking its private-parts in an animated and unpleasantly loud fashion for some considerable time, causing the customers in the waiting room to give exaggerated attention to what was happening on the TV — we were seeing without looking — when without warning 30 kilos of lascivious canine flesh flopped over onto my shoes. The strangely ecstatic sounds emanating from its wet snout caused me to grab Girlie so as to deliver her to the safety of the bench I was sitting on. The woman next to me, noticing my reaction, smilingly offered me some gratuitous information, “He’s my rock; he’s 15” conveyed with an expression of love laced with gratitude for her 15 year old drooling Pit Bull, now obviously suffering some kind of swallowing malfunction. “Don’t know what I’d do without Bill” she said before returning to the big screen once again. Shifting my attention back to Hillary, it became apparent that she had no problem in expressing her gratitude either in accepting the nomination…her throat, lungs and speech-writers obviously up to the task. Verbally she was in full matronly flight now and it appeared that all the women in the waiting room, in spite of the cacophony of doggy sounds in the background, were bonding with the image of the woman in the white pantsuit on the big screen.

Then it struck me, they were locked into the idea of woman as the incarnation of hegemonic power. The woman in the pantsuit symbolised gender politics; she appeared to represent the righting of some long standing grievance they imagined had to do with laundry duties, floor scrubbing and glass ceilings. She was as pure as the driven snow in her white pantsuit. This empowered woman was all things to all women, freed from knitting-needle, potato-peeler and being perceived merely as a sexual object… the woman in the white pantsuit had finally made it to Barbie Heaven. The rude details of her personality had been sanitized, and her rise to hegemonic status was as vivid as the Southern Cross on a clear night in my part of the world. Just before my name was called to pick up my pooch, I observed how Hillary turned to the man sedately dressed in a dark blue suit next to her, to say “Don’t know what I would have done without Bill”.

Driving home with Girlie, relieved that she was free from doggy-aids or something worse, I thought of Donald Trump in the context of his ambition to be God’s hegemonic representative on earth. Somewhere out there, in some parallel veterinary clinic, eight men might be sitting on benches waiting their turn to have their Mastiff, Great Dane, Irish Wolf-hound, Cane Corso, Dogue de Bordeaux etc., checked for colic or bad gas. They might be looking at Donald receiving the Republican Nomination on a very large and flat TV screen. Donald’s message being unambiguously ambiguous would be the way they liked it… He wants America to be Great Again. He is saying that only he can make this happen. He doesn’t say if this entails more or less bombing of other people’s countries and it doesn’t seem to count for much with his audience. The eight men in the waiting room want greatness to happen regardless the means. No one can say why a thing once set in motion should stop anywhere. A thing will either be at rest or move ad infinitum…and they don’t want a bar of inertia…this is about identity politics. These eight men would probably vote for whoever promised more of the same, so long as America remained the top Mastiff, Great Dane, Alsatian or whatever.

So where’s the choice in this election year in America? There’s none, even blind Freddie can see that, as we say down under. American style capitalism — which is really the age-old quest for the secret of perpetual motion and growth — is likely to fall on its own sword. The motion of a hypothetical machine which, once activated, would run forever unless subject to an external force, or to wear, evolved into the machine for constant war that America is now experiencing. The Queen of Chaos in Pantsuit is no stranger to war, wear and wastage, and her taste for more of the same is born of a passion for bloodletting, explicated as Full Spectrum Dominance doctrine. The white Pantsuit doesn’t quite hide the take-all-and-concede-nothing jackal posturing behind the matronly rhetoric.

So do Americans, ordinary Americans need to take to the streets to protest the shenanigans of the corrupt elites? The answer would have to be yes! Everyone can see that the owners of everything have put a price tag on everything except human dignity… and are only there for the take. The fight for human dignity and the health of the planet is only beginning. The hegemon we need is the hegemon that can think socially. The machinery of state doesn’t need fixing; it needs replacing.

Denis is a retired businessman and journalist, and a voracious follower of matters political outside of the mainstream arena. Read other articles by Denis A..

This article was posted on Thursday, August 4th, 2016 at 11:01am and is filed under Corruption, Culture, Imperialism, Opinion.

Wall Street is Not a Market or the Marketplace: Wall Street is a Scam!

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Sun, 07 Aug 2016 13:18:00 +0000

This Is Not a Market

The floor of the New York Stock Exchange (RosieTulips / Flickr)

Many things have been said of the British public since the country’s vote to leave the EU. In the immediate aftermath, pundits were unsparing of the “ignorant” voters who, they insisted, had been conned into opting for Brexit. Yet the sternest response, judging from news reports, has come not from pundits but from the market. Just yesterday, the Bank of England cut interest rates to a record low in response to the sharpest drop in stock indexes since 2008. The headlines tell us that the global market, or the stock market, or the financial market, or the labor market, or perhaps all of these markets together have reacted and will continue to react to Brexit. And we are, or we should be, terrified.

This refrain is familiar, but also puzzling, because those reports never really explain what they mean, exactly, by “the market.” In some sense, we all know what we mean we talk about a market: a market is a place where you go to buy and sell things. They’ve existed for centuries; Fernand Braudel wrote of medieval markets filled with “piles of produce, slabs of butter, heaps of vegetables, pyramids of cheese, fruit, wet fish, game, meat which the butcher cut up on the spot, unsold books whose pages were used to wrap up purchases.” These markets met weekly or yearly, at the center of town, or on the outskirts; sometimes under cover, often not. They still do.

But when we talk about markets today, we mean something more grand and mysterious. The meaning of “market” has expanded to cover many aspects of our lives, and become more abstract in the process. As early as 1928, people started talking about a “marketplace of ideas.” By the 1970s, “the market” meant “the competitive free market; the operation of supply and demand;” in the same decade, historian Daniel Rodgers tells us, market metaphors became detached from history and institutions. The market had become a “metaphor for society as a whole.” In the 1980s, Ronald Reagan praised the “magic of the marketplace,” and by the 1990s, “the market” sounded like a democratic utopia.

Given how ordinary people use the term, it’s not surprising that academic economists are a little vague about it—but you’ll be glad to hear that they know they’re being vague. A generation of economists have criticized their colleagues’ inability to specify what a “market” actually is. George Stigler, back in 1967, thought it “a source of embarrassment that so little attention has been paid to the theory of markets.” Sociologists agree: according to Harrison White, there is no “neoclassical theory of the market—[only] a pure theory of exchange.” And Wayne Baker found that the idea of the market is “typically assumed—not studied” by most economists, who “implicitly characterize ‘market’ as a ‘featureless plane.’”

This is a long way from pyramids of cheese and slabs of butter. When we say “market” now, we mean nothing particularly specific, and, at the same time, everything—the entire economy, of course, but also our lives in general. If you can name it, there’s a market in it: housing, education, the law, dating. Maybe even love is “just an economy based on resource scarcity.”

The use of markets to describe everything is odd, because talking about “markets” doesn’t even help us understand how the economy works—let alone the rest of our lives. Even though nobody seems to know what it means, we use the metaphor freely, even unthinkingly. Let the market decide. The markets are volatile. The markets responded poorly. Obvious facts—that the economy hasn’t rebounded after the recession—are hidden or ignored, because “the market” is booming, and what is the economy other than “the market”? Well, it’s lots of other things. We might see that if we talked about it a bit differently.

For instance, we might choose a different metaphor—like, say, the traffic system. Sounds ridiculous? No more so than the market metaphor. After all, we already talk about one important aspect of economic life in terms of traffic: online activity. We could describe it in market terms (the market demands Trump memes!), but we use a different metaphor, because it’s just intuitively more suitable. That last Trump meme is generating a lot of traffic. Redirect your attention as required.

This is just one instance in which talking about traffic, rather than markets, makes more sense in light of our day–to-day lives. We don’t know much about markets, because we don’t deal with them very often. But most of us know plenty about traffic systems: drivers will know the frustration of trying to turn left onto a major road, of ceaseless, pointless lane-switching on a stalled rush-hour freeway, but also the joys of clear highways. Public transport users will feel the pain of canceled trains and overcrowded buses, but also the pleasure of being able to sit and read and daydream while being transported across the city. Anyone who’s ever flown has wondered why the process has to be so unpleasant, and should also have considered that at least the unpleasantness only lasts for a few hours, and not, as in the oceangoing ages, months.

We know the traffic system because, whether we like it or not, we are always involved in it, from birth: as soon as little Jean Doe leaves the hospital, s/he’ll never leave the transport system. If you step out of your door, you’re no longer just yourself; you’re a pedestrian, or a bicyclist, or on your way to another mode of transportation. And that’s how the economy works, too. Jean’s parents are just about to get a bill for the birthing process, and for the doctor’s appointments that came before it. In a month, they’ll buy formula (not that they advocate that sort of thing), and swaddle cloths, and bedding. As of birth, Jean is in the economy—even if s/he rarely goes to a market. You can’t not be an economic actor; you can’t not be part of the transport system.

Just as you’re always already in the traffic system and the economy, and just as you rely on it being there, you also can’t leave the economy, even if it screws you over. If someone engages in economically stupid behavior—let’s say, lending out huge amounts on mortgages that will never, ever be repaid—and you lose out (even though you borrow responsibly, if at all), you might be able to sue, but in all likelihood you won’t be able to do much of anything, even if you’re the United States government. Similarly, if some twit veers into oncoming traffic and causes a five-car pileup that traps you on the highway, Ms. Doe won’t be able to sue the twit. She has to sit there, in her car, until someone cleans up the mess.

Despite these fairly frequent inconveniences, though, Jean and his/her parents happily rely on the infrastructure that has been built up over generations. They really can’t get around without them. The bus picks Mr. Doe up at the same place every day. Ms. Doe knows that she can turn out of her driveway with confidence, and turn into the street, and that the next street will be there, and then another, and then another. You can have a pop-up market, and a market that only opens on Sundays, or only opens at Christmas—but that’s not the way traffic works. And that’s not the way the economy works, either. It has to be there when we need it, and it’s always there, even if we wish it weren’t.

Consider also the composition of the traffic system and the economy. A market, whatever else it is, is always essentially the same thing: a place where people can come together to buy and sell things. We could set up a market right now, with a few fences and a sign announcing that people could buy and sell. We don’t even really need the fences. A traffic system, however, is far more complex. To begin with, the system includes publicly and privately run elements: most cars are privately owned, as are most airlines. But in many countries there are still publicly owned trains, buses and trams, and those that aren’t publicly run are heavily subsidized. There are publicly owned airlines, too, of course. Bikes are usually private, but some cities provide public bikes. Pedestrians are entirely private. But all of these elements use publicly funded infrastructure: your privately owned car is of no use without roads, which are mostly publicly funded, and private toll-roads wouldn’t go anywhere if they weren’t embedded in the publicly-funded road network. This is a much better map of the economy than a market could ever be. Economic activity relies on private actors, public actors, and publicly funded private actors all working within the institutions and infrastructure that have been developed over the last few centuries.

Those institutions can be international (say, the Trans-Pacific Partnership). They can be national (any given state’s monetary system). They can be sub-national (different states have different laws). They can be local (there are very different ways of buying and selling in, say, Istanbul and Los Angeles). The traffic system is just as globalized as the economy (most obviously in air travel, but also shipping and rail) but it’s also localized and diverse: there are no rickshaws in Venice, no water taxis in Minnesota.

As anyone who’s ever traveled in a foreign city will know, those localized transport systems all rely on very different rules and norms. But at home, we can take for granted the many rules that have to be followed by everyone just so we can get to work: Mr. Doe’s bus driver has to follow the rules of the road, with its signs and signals, its lights and lane markers. A bus might indeed have a slightly different set of rules to follow than that of a private car—buses can and must stop at bus stops; they might have specially designated lanes during rush hour; and there are even special categories of buses. Americans, quaintly, stop traffic in each direction when a big yellow school bus drops the kids home from school.

These rules are an accepted, even valued, part of modern life. And their acceptance makes sense. After all, what would a deregulated transport system look like? Cars without roads, without speed limits, without traffic signals, without social conventions? You’d be free to go wherever you like, provided you could find a vehicle and a regular source of gas, which sounds great, until you imagine millions of people all trying to do it at the same time. That sounds more like the world of Mad Max, and all that autonomy starts to sound like an awful lot of pointless horror.

But we don’t have to think in those terms, because nobody has ever seriously suggested that the regulation of the traffic system undermines American freedom. In fact, the highway system has always been a symbol of American freedom, the space where you can flee your past and express your true self: why else did Kerouac and the Beats, Thelma and Louise, go on the road? They were all fleeing the oppressions of private life, and the freeways helped them do that—despite the fact that the highway system itself only exists thanks to government spending. A well-functioning, centrally planned, well-regulated traffic system isn’t just compatible with an idealization of individual freedom: it is the very foundation for a cherished individual freedom. And that’s why Americans can still get their kicks on Route 66.

If it would be odd—possibly pathological—to insist on absolute autonomy on the roads, it’s just as strange to evaluate traffic systems solely by their growth. When asked if the traffic in LA is improving, no one would cite higher numbers of cars driven or more miles of tarmac laid. We know that expansions of the transport system have consequences: Volkswagen executives try to fudge their emission tests; environmentalists try to offset the emissions of their plane travel. Meanwhile, when we talk in terms of GDP and the Dow, when we track the rise and fall of market indicators, growth is the only standard we know—making it easy to forget that the growth of the economy, with all of its environmental and social consequences, is not necessarily the same thing as the good of the economy.

If we don’t evaluate traffic systems based on their size, or their growth, how do we evaluate them? Mostly, by how well they help people get where they want to go. The market metaphor encourages us to think that all economic activity is motivated by the search for profit, and pursued in the same fashion everywhere. In a market, everyone’s desires are perfectly interchangeable. But, while everybody engages in the transport system, we have no difficulty remembering that we all want to go to different places, in different ways, at different times, at different speeds, for different reasons. You might prefer to drive, because it’s faster; I prefer the train, because it’s more comfortable. That’s a more appropriate way to think about the economy, too. Like the transport system, the economy is the necessary framework for us getting where we want to go—but we all use it in our own ways, for our own purposes.

Of course, not all of these choices and desires can be fulfilled. People travel for many reasons, yes, but they also refrain from traveling sometimes, because the traffic system makes certain types of travel much harder than they need to be. A young woman born in South-Central LA can’t get to grocery stores, schools, and jobs as easily as her (distant) cousin in Beverly Hills. It’s easier to move around most American cities by car than it is to travel by bus, so if you can’t afford a car, your options are limited. These different opportunities for travel have very real consequences. We know that living close to good schools and groceries matters, which is why housing prices are so tied to school districts. We know that if you can’t afford a car, and the public transport system doesn’t work well, you can’t travel to accept job opportunities. And we know that, in most cases, these failures are systematic. Nobody chooses to live with a bad transport system: there just is only one of them.

Thinking about traffic systems in terms of individual choices is, then, deeply problematic. The Does have never been able to demand into existence a new public transport line in a poor part of town—and the same goes for new miles of road to an unconnected exurb. It’s impossible to imagine that highway construction and deteriorating public transit systems are the result of individual choices or “natural” economic processes (we’re looking at you, DC Metro). Deciding how to improve the traffic system, how to expand people’s opportunities, is obviously a question of resource allocation and prioritization on a scale that private individuals—even traders—cannot influence on their own. That’s why government have not historically trusted the “magic of the markets” to produce better opportunities for transport. We intuitively understand that these decisions are made at the level of mass society and public policy. And, whether you like it or not, this is true for decisions about the economy as well.

Thinking of the economy in terms of the market—a featureless plane, with no entry or exit costs, little need for regulation, and equal opportunity for all—obscures this basic insight. And this underlying misconception creates a lot of problems: we’ve fetishized economic growth, we’ve come to distrust government regulation, and we imagine that the inequalities in our country, and our world, are natural or justified. If we imagine the economy otherwise—as a traffic system, for example—we see more clearly how the economy actually works. We see that our economic life looks a lot less like going to “market” for fun and profit than it does sitting in traffic on our morning commute, hoping against hope that we’ll get where we want to go, and on time.

J.D. Evans’s writing can be found in places like The Point, McSweeney’s Online Tendency, and Santa Monica Review.

Sam Lebovic teaches history at George Mason University, and is the author of Free Speech and Unfree News: The Paradox of Press Freedom in America (Harvard, 2016).

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The Committee for Screwing the Middle Classes and the Poor

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Sat, 30 Jul 2016 01:57:00 +0000

#Monetary Sovereignty – Mitchell

The Committee for Screwing the Middle Classes and the Poor

Friday, Jul 29 2016

Uncategorized Committee for a Responsible Federal Budget, crfb, monetarily non-sovereign, monetarily sovereign,monetary sovereignty, Ten Steps to Prosperity Rodger Malcolm Mitchell 4:28 pm

We’ve written before about an organization that calls itself, “The Committee for a Responsible Federal Budget.” (CRFB)

We suggest they change the name to “The Committee for Screwing the Middle Classes and the Poor.” To say that what they publish is rank nonsense, would do a disservice to the words “rank” and “nonsense.”

CRFB is a prime promulgator of the Big Lie, the lie that the federal government somehow can run short of its own sovereign currency, the dollar, with which to pay its bills.

The Big Lie devolves to the Big Screwing, the never-ending effort by the rich, to cut Social Security, cut Medicare, cut Medicaid and cut virtually every other program that benefits the middle classes and the poor.

Here are a couple of CRFB’s luminaries (quoting from their website), nearly all of whom are rich and all of whom are white:

Maya MacGuineas, the President of the CRFB as well as the head of the Campaign to Fix the Debt. (She once was) dubbed “an anti-deficit warrior” by The Wall Street Journal.

Since deficit spending is the method by which the federal government grows the economy, MacGuineas should more properly be dubbed “an anti-economic growth warrior.”

Erskine Bowles was appointed by President Barack Obama to serve as co-chair of the National Commission on Fiscal Responsibility and Reform with fellow CRFB board member Senator Alan Simpson.

Erskine and Bowles authored a report that recommended cuts in the federal spending that was pulling us out of the Great Recession. Remember “sequestration” and the “fiscal cliff”?

Peter Peterson is the founder and chairman of the Peter G. Peterson Foundation is the founding president of The Concord Coalition. Prior to this, he served as chairman and CEO of Lehman Brothers.

Peterson is a very rich man who does everything possible to make sure your Social Security and Medicare are cut. The Concord Coalition is, like the CRFB, an organization devoted to widening the Gap between the rich and the rest.

In true CRFB tradition, our intelligence and our pocketbooks once again are assaulted with an article like this:

Long-Term Budget Outlook Underlines Trouble Ahead for Social Security
JUL 29, 2016

The Congressional Budget Office’s (CBO) 2016 Long-Term Budget Outlook release came with updated projections of the 75-year solvency of Social Security.

CBO now projects that Social Security faces a 75-year shortfall of 4.7 percent of taxable payroll – 0.3 percentage points worse than its projections from December – but maintains an exhaustion date of 2029.

Social Security is an agency of the federal government. Neither the federal government nor any of its agencies can become insolvent unless Congress wants it.

Unlike state and local governments, which can be insolvent, the federal government is Monetarily Sovereign, meaning it has unlimited control over both the supply and the value of the U.S. dollar.

The U.S. government invented the dollar, created it from thin air by the simple device of passing laws, which also were created from thin air. Because the government never can run short of laws, it also never can run short of dollars.

The U.S. government never, never, never can be unable to service any invoice denominated in dollars. Never has, never will. All talk about federal agency insolvency is 100% BS.

The rest of CRFB’s article attempts to put a scientific spin on its woefully false claims by touting such measures as: “actuarial shortfall” and “projections involving life expectancy, fertility, andgrowth in the consumer price index.”

But all the phony math in the world will not cover up the Big Lie, the basic premise, that the federal government can run short of its own sovereign dollars.

And then comes the real pitch to the suckers:

Now is the time to start making reasonable changes to Social Security rather than waiting until the last minute when the necessary changes become much more drastic.

Instead of discussing ways to expand a program whose funds are already strained,policymakers should be considering both spending and revenue changes to ensure the long-term health of this important program for millions of beneficiaries across the country.

To hide the truth from you, these con artists use the innocent-sounding phrase, “reasonable changes,” when they really mean: Cut Social Security benefits and increase the FICA taken from your paycheck.

And then they have the chutzpah to end with, “ensure the long-term health of this important program for millions of beneficiaries across the country.”

Please gimme a break. If these characters cared one whit about the “millions of beneficiaries,” they would demand benefit increases and tax cuts.

The fact of Monetary Sovereignty is this: You, and the rest of salaried Americans, could pay $0 FICA, while Social Security benefits were doubled, and still the federal government would not run short of dollars.

Why do you pay FICA? Why have Social Security benefits begun later and later? Why do organizations like CRFB lie to you again and again about mythical insolvency threats? Why even, was a complex, convoluted program like “Obamacare” necessary?

Because our political leaders are paid to lie by the rich, whose primary objective is to widen the income/wealth/power Gap between the rich and the rest.

The Gap is what makes the rich richer, and the wider that Gap, the richer they are.

So the rich bribe Congress (via campaign contributions); they bribe the media via ownership; they bribe the economists via contributions to universities and think tanks; and the rich pay the salaries of MacGuineas, Simpson, Bowles et al, and finally, the rich even bribe the Supreme Court justices with free vacations and other perks.

Bernie Sanders made a stab at narrowing the Gap, but he wasn’t believed by the very people who would have been helped most: The middle classes and the poor.

So now we are stuck with Hillary Clinton, who if she is like Barack Obama, will do very little to close the Gap, or worse yet, stuck with Donald Trump who with his ignorance and hubris, not only will do nothing to close the Gap, but who will destroy America’s economy.

It doesn’t need to be this way. The federal government easily could provide Social Security and Medicare for every man, woman, and child in America.

The first step is for you and enough other people to understand and believe Monetary Sovereignty, and to demand the same of Congress.

You need only to get up off your butt and make it happen.

The “Rule of Money” and Corruption in America. Predatory Capitalism Feeds on Public Dollars, Forced Debt

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Sat, 23 Jul 2016 15:41:00 +0000

Global Research

The “Rule of Money” and Corruption in America. Predatory Capitalism Feeds on Public Dollars, Forced Debt

McCutcheon should become a rallying cry for a focused campaign to ‘end the rule of money’

By Kevin Zeese and Margaret Flowers

Global Research, April 09, 2014

popularresistance.org/

While some still believe the United States is the greatest democracy on Earth, the US is actually a plutocracy, a government ruled by the wealthiest. The recent Supreme Court decision in McCutcheon will subject us to an even stronger plutocracy that no one will be able to deny. The ‘rule of money’ will become more deeply entrenched at a time of economic and environmental crisis.

In the US today, a small group of people rule over hundreds of millions of us through a government corrupted by money; and controls the economy through mega-businesses that receive special treatment from that government, prevent entrepreneurial competition and control tens of millions of people through low wages and high debt. The plutocrats fund the only two parties allowed to run for office and the people are manipulated by fear to vote against their interests in a mirage democracy of rigged elections.

The legitimacy of the US government is now in question. By illegitimate we mean it is rule by the 1%, not a democracy ‘of, by and for the people.’ The US has become a carefully designed plutocracy that creates laws to favor the few. As Stephen Breyer wrote in his dissenting opinion, American law is now “incapable of dealing with the grave problems of democratic legitimacy.” Or, as former president, Jimmy Carter said on July 16, 2013 “America does not at the moment have a functioning democracy.”

Even members of Congress admit there is a problem. Long before the McCutcheon decision, Senator Dick Durbin (D-IL) described the impact of the big banks on the government saying: “They own the place.” We have moved into an era of a predatory form of capitalism rooted in big finance where profits are more important than people’s needs or protection of the planet.

It is up to us to use McCutcheon to energize the movement against money-corruption of the government and economy. Throughout history, bad court decisions have helped energize movements; people power can make that happen again. Already there is a growing movement against the American plutocracy.

Predatory Capitalism Feeds on Public Dollars, Forced Debt

Where does the strength of the plutocrats come from? Their control of public policies has created a massive welfare state for the wealthy while the rest of us are driven into debt. Understanding this relationship is essential if we are going to end it.

This week Strike Debt, an off-shoot of Occupy Wall Street, published the second edition of The Debt Resisters’ Operations Manual. They open the manual by describing the pervasiveness of debt:

“Everyone is affected by debt, from people taking out payday loans at 400% interest to cover basic living costs, to recent graduates paying hundreds of dollars in interest on their students loans every month, to working families bankrupted by medical bills, to elders living in ‘underwater’ homes, to the teachers and firefighters forced to take pay cuts because their cities are broke, to people in the global South suffering due to their countries being pushed into austerity and poverty by structural adjustment programs. Everyone seems to owe something, and most of us are in so deep it’ll be years before we have any chance of getting out—if we have any chance at all.”

Strike Debt points out that “over three-quarters of us have some type of personal debt. At least 14% of people living in the United States are already being pursued by debt collectors, which is more than double from a decade ago.” Putting people into the debt of big banks is “a profoundly effective form of social control.” When students leave school anchored by massive debt, it limits their choices. When underpaid workers are in debt with credit card bills or mortgages, it makes it impossible for them to fight for fair treatment at work or to quit and risk not being able to find another job.

Why do we have these debts? Because the policies put in place by corporate-dominated political parties have created unjust laws over time that ensure we accumulate massive debt. As Strike Debt summarizes the situation:

“The reason you have tens of thousands of dollars in medical bills is that we don’t provide medical care to everyone. The reason you have tens of thousands of dollars of student loans is because the government, banks, and university administrators have contrived to cut government subsidies that support education while driving college costs through the roof. Unlike fifty years ago, it’s simply impossible for all but the wealthiest to attend college without them. Bubbles drive housing and food prices up, wages are kept artificially low so that they don’t keep up with inflation, and more and more of us rely on proliferating forms of ‘casual,’ ‘flexible,’ and part-time employment.”

The denial of basic services and education puts Americans from the poor through the upper middle class in economic peril. To add insult to injury, our public dollars that could pay for essential services and education are used instead to enable predatory behavior by big corporations. The biggest recipients of welfare are big business interests like Walmart and the big banks.

Walmart is the largest private employer in the US, with annual profits of over $15 billion. The six Walmart heirs have more wealth than the bottom 40% of all Americans combined. How did they get there? Massive government subsidies are central to Walmart’s business plan. These include tax breaks from state and local governments for each of their nearly 5,000 stores in the United States. And government subsidies to their employees for healthcare, food and housing because Walmart pays poverty wages. Of all retail outlets, Walmart is the largest recipient of government assistance in the country.

However, the biggest recipients of government assistance are the banks themselves. Through the private corporation known as the Federal Reserve, the banks have been given trillions of dollars in virtually no-interest loans. The banks then lend the money to the government at an immediate profit or to consumers and businesses for an even bigger profit. And then the banks borrow on those loans and expand their wealth even further, using the money to gamble on derivatives or other risky activities that put the economy at risk.

By giving the banks the governmental power to make money, a handful of Wall Street banks have become the dominant sector of the economy. Retaking the governmental power to create money would be a major step towards transforming the economy.

As if these subsidies aren’t enough, the banks and other large corporations also avoid paying taxes. One of many tax avoidance schemes is to keep money off-shore. A new report from ISI Research finds that U.S. S&P 500 companies now have $1.9 trillion parked outside the country. There have been proposals for a global tax on this income, but in our government owned by banks, these do not move forward.

While there are many predatory practices by the big banks against people in the United States, it is sometimes easier to see them when we look at behavior around the world. As the Debt Resister’s Operations Manual points out, “in 2008, the world’s poorest countries were paying $23 million a day in interest payments to the rich industrial world, for loans where the original principal had often already been paid back several times over.” In the US and around the world, they point out that: “Debt … has become the primary form of extracting and accumulating wealth for the rich.”

As a result of World Bank policies, millions of people are being thrown off their land because large corporations are being given special rights. The World Bank is driving this destructive trend with its Doing Business rankings, which force countries to compete with each other to do away with things like environmental protections, worker’s rights and corporate taxes. “The World Bank is facilitating land grabs and sowing poverty by putting the interests of foreign investors before those of locals,” says Anuradha Mittal, Executive Director of the Oakland Institute.

The other major international bank, the International Monetary Fund (IMF) provides loans to countries that come with policy conditions, called Structural Adjustment Programs (SAPs), that require austerity and privatization of social services and resources. These SAPs undermine the government and economy, increase poverty and suffering and thus, lead to social unrest. Despite this, recent reports indicate the IMF is increasing the number of structural conditions and using its power to dominate highly sensitive, political policy areas (for example the recent $18 billion loan to Ukraine which will require cutting retirement benefits in half from roughly $100 to $50 per month).

All of these policies have had a dramatic and harmful impact. As economist Joseph Stiglitz testified recently “America has achieved the distinction of becoming the country with the highest level of income inequality among the advanced countries.” Strike Debt notes “the United States ranks 138th out of 141 countries in terms of wealth equality.” Stiglitz told the Senate Banking Committee there is “a vicious circle: our high inequality is one of the major contributing factors to our weak economy and our low growth.”

But even more stark than income inequality is wealth inequality, which is worsening. Due to debt, 47% of Americans have zero wealth while the “richest 0.1 percent of Americans have dramatically expanded their share of the country’s overall wealth in the last three decades.” Wealth is important because it represents ownership and control, “a higher concentration of wealth naturally implies that fewer individuals control the decisions made by firms in the economy,” according to Princeton’s Atif Mian and University of Chicago’s Amir Sufi.

The Revolt Against American Plutocracy

People are revolting against plutocracy in a variety of ways in the US and around the world. There are movements to eliminate the corrupting influence of money on politics, against austerity, for living wages, to end extreme energy extraction, to end insurance-based healthcare, to stop privatization of schools, to transform the Federal Reserve, to erase debt and many other issues.

The Debt Resister’s Manual points out that “Movements for debt resistance have a very long history. From ancient times, people have challenged the harsh penalties visited on defaulters, including branding, torture, imprisonment, and even slavery. In ancient Athens, the first known democratic constitution came about largely as a result of an outright rebellion of debtors…” And, they report we see protests growing: “Around the world, popular movements are beginning to rattle the chains, seeing debt for what it is—a form of domination and exploitation—and collectively rising up against it.”

People recognize that much of debt is illegitimate. The corrupt government allows usury interest rates and unfair loan practices. Cuts to social services and education force people into debt. The solutions are obvious, though we are told they are too radical. The Debt Resister’s Manual points out that “there was a kind of jubilee in Iceland after the 2008 economic crisis: instead of bailing out their banks, Iceland canceled a percentage of mortgage debt.”

In addition to resistance, people are building alternatives to corrupt big finance capitalism. The new economy that people are striving to create is defined by our values. Strike Debt summarizes:

“Our values will serve as our North Star: putting people and nature before profits; meeting need and not greed; empowering all and not just a few; becoming less alienated from our work and from each other; and creating more leisure time to spend with our loved ones.”

Jerome Roos of ROAR Magazine outlines the possibilities of a new finance system that was described at the Moneylab Conference in Amsterdam last week. He challenges his readers to think about money differently and to recognize that though our current monetary system is based on debt, it doesn’t have to be that way.

The Freelancer’s Union calls the growing new economy the “Quiet Revolution” and they invite people to map what their community is doing – cooperatives, collectives, local food networks. Another organization, the Democracy Collaborative, publishes a list of projects that we can all learn from on Community-Wealth.org. Next month we are holding a conference in Baltimore to work on creating a new local economy based on economic democracy that includes worker-owned businesses, new ways of structuring finance, affordable housing, clean energy and food security. One new form of urban agriculture that is taking off is the vertical farm.

People are discussing essential ideas that elected officials who represent the plutocrats will not even acknowledge. If we create new models, then they will eventually become the policy of the US and much of the world. For example, when you recognize that wealth comes from the commons – built on infrastructure like roadways and the Internet that we all pay for, or the intellectual and technical knowledge that universities and government research grants have paid for – and that major growth in the economy has always had major government involvement from the railroads to the Internet, then it becomes evident we must all share the wealth that this commons has created.

And because robotics and other technology mean there will be fewer jobs, indeed in the future we will not have enough jobs, we have to figure out new ways to provide income so that all can participate in the economy. One solution that is being discussed by those outside the major political parties is a guaranteed minimum income. This is one example of why we need to be independent of the two parties and not be limited by the agenda of either ‘rule of money’ based party.

Time to Energize the Movement to End the Rule of Money

The ‘arc of justice’ does not bend toward plutocracy. People powered movements that are building today will end plutocratic rule.

Last week we reported on two campaigns that were announced for this spring, the Worldwide Wave of Action and the Global Climate Convergence. After we published that article, two more campaigns were announced. Reset the Net, seeks to restore privacy to the Internet by our own actions rather than waiting for the government. People are taking action now to push Internet providers to provide privacy. Many would go further and make the Internet a public utility whose mission is to serve the public. Second, is a campaign against the abuses of international finance, particularly by the World Bank, Our Land Our Business. The IMF and World Bank have their meeting from October 10 to 12 in Washington, DC and actions are being urged around the world during that time period.

Rather than being despondent about the Supreme Court decision in McCutcheon, we should use it to energize and focus our efforts. Every issue is impacted by the corruption of the ‘rule of money.’ We know we cannot achieve the transformation that is needed so long as this corruption continues. A focal point of the ‘movement of movements’ must be to end the influence of money in US elections so it can be legitimately called a democracy.

The legitimacy of government is at the root of the founding of our nation. Our favorite ‘founder,’ Thomas Paine, put forward ideas that were ignored by those who wrote the Constitution, e.g. abolition of slavery, voting rights for all including woman and African Americans, healthcare for all and equitable sharing of the wealth of the nation. Now, 238 years later we are still fighting for some of his beliefs. In his article “We are Radicals at Heart: A New History Gets America Wrong,” Harvey J. Kaye writes that Paine told us “that history is not over, that prevailing inequalities and oppressions are not inevitable, and that we need to remember who we are and recognize that ‘We have it in our power to begin the world over again.’”

This will not be the first time in history that a corrupt court decision has inspired action. Indeed, the recognition that the British Crown was illegitimate came in part out of a court decision upholding the Great Writs – which allowed British authorities to search colonists at whim.

In 1761 James Otis argued against the Great Writs on behalf of Massachusetts colonists subjected to searches by British troops and Customs officials. He argued in a five hour oration before a packed State House, a speech that was printed in full in 1773 that searches without any oath for their basis allows the Crown’s authorities to “enter our houses when they please.” When the Crown court ruled against Otis in the Great Writs case, a young court reporter, John Adams, recorded the event writing “Then and there the child independence was born.”

Let us turn the corrupt decisions, Citizens United and McCutcheon, into our rallying cry for a government independent of the corrupting influence of money; and to create the kind of economic democracy and participatory government to which the ‘arc of justice’ points us.

This article is produced by PopularResistance.org in conjunction with AlterNet. It is based on PopularResistance.org’s weekly newsletter reviewing the activities of the resistance movement.

Kevin Zeese, JD and Margaret Flowers, MD are participants in PopularResistance.org; they co-direct It’s Our Economy and co-host Clearing the FOG. Their twitters are @KBZeese and MFlowers8.

The original source of this article is popularresistance.org/

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America’s Poverty Problem Hasn’t Changed and Likely Will Not Change in the Future

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Tue, 21 Jun 2016 04:30:00 +0000

The Atlantic

America’s Poverty Problem Hasn’t Changed

The only thing that has is one of the ways the Census Bureau chooses to measure it.

GILLIAN B. WHITE
SEP 16, 2015

When the Census Bureau released its latest data on income and poverty for the country, and despite a falling unemployment rate and a rising GDP—two promising macroeconomic signs—things haven’t improved all that much for American families in the past year.

n 2014, median household income was reported as $53,657—statistically the same as it was in 2013. The same stagnation held when it came to the poverty rate, with about 14.9 percent of Americans, or almost 47 million people, falling below the poverty threshold of about $24,000 for the year.

The news was, of course, worse for minorities and women. The rate of poverty among blacks and Hispanics was well over 20 percent. Women, too, remained more likely to struggle to make ends meet, especially elderly women, whose poverty rate was nearly double that of men in the 75 and older age group. And though more women than ever are participating in the workforce, with 61 percent of women employed full time in 2014, their earnings remained about 79 percent of their male colleagues.

Poverty Rate by Race

None of this is especially revelatory—America’s poverty problem is basically the same. So the biggest news in the data dump was the shifting methodology behind it all. For years, critics have said that the means of measuring poverty in the U.S. is overly simplistic. It includes forms of income such as social security and unemployment, but excludes other things that shape families’ finances, such as food stamps and tax credits. It also ignores that the price of some services, such as health care, have escalated more quickly than inflation has, and that the costs of childcare matters more to families than it did 50 years ago, when fewer women were working.

That’s why for the first time, the bureau released a supplemental poverty measure along with its official figures. According to the supplemental data, the poverty rate in the U.S. was about 15.3 percent—0.4 percentage points higher than the report’s official rate. But the additional measure shows differences in age groups. For instance, those under the age of 18 have a poverty rate of 16.7 percent—quite a bit lower than the 21.5 percent reported in the main findings. For older Americans, the tweaked metrics paint a grimmer picture, with the share of seniors living in poverty reported as nearly 5 percentage points higher than the official measure.

Poverty Rates: Official Versus Supplemental

The more inclusive measures might help monitor the effectiveness of programs meant to increase the well-being of specific populations, such as children or the elderly. Still, the use of an official, blanket income level remains a crude means of identifying families that are having a difficult time putting roofs over their heads or food on the table, especially considering the vast differences in cost of living around the country. To better understand the persistent poverty problem requires greater attention to nuanced and localized data that can better illustrate areas where the cost of essentials are outstripping income and benefits, and where families continue to suffer.

Who is poor in the United States? 14.8% of the Population, for starters...

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Mon, 20 Jun 2016 13:42:00 +0000

The Hamilton Project

Paper | June 17, 2016

Who is poor in the United States?

By: Diane Whitmore Schanzenbach, Lauren Bauer and Ryan Nunn

Understanding the characteristics of the poor is crucial for crafting effective anti-poverty policies. In this Economic Analysis, we document characteristics of the 46.7 million Americans—14.8 percent of the population—who lived in poverty in 2014. Using the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) collected in March 2015, the source of official poverty statistics, we describe who lives in poverty as well as the characteristics of the working-age poor and those working-age poor who were employed less than full-time year-round.

Consider the following sobering statistics, illustrated in the figure above:

More than a third of those who live in poverty are children. More than 15.5 million children lived in poverty in 2014.
About 13 percent of those living in poverty are senior citizens or retired.
A quarter of those who live in poverty are in the labor force—that is, working or seeking employment.
A tenth of those in poverty are disabled.
Eight percent of those living in poverty are caregivers, meaning that they report caring for children or family.
Students, either full- or part-time, make up another seven percent of those living in poverty.
Just three percent of those living in poverty are working-age adults who do not fall into one of these categories—that is, they are not in the labor force, not disabled, and not a student, caregiver, or retired.

Just over half of those who live in poverty are of working-age, defined as between the ages of 18 and 64. Figure 2 categorizes working-age adults living below the poverty line in 2014. Among working-age adults living in poverty, 45% are in the labor force:

13 percent are full-time, year-round workers, meaning that they usually worked 35 hours or more per week for at least 50 weeks during 2014.
Just over one quarter of poor working-age adults work less than full-time year-round, meaning that they worked during the previous year, but not on a full-time, full-year schedule.
5 percent report that they are seeking employment – a classification that means that these adults were in the labor force – throughout the year.

The remaining 55 percent of working-age adults are not in the labor force. Additional data from the CPS ASEC, which asks respondents why they are not in the labor force, allows us to further describe who these non-workers are. As a share of the total working-age adult living in poverty population:

18 percent —a third of the non-workers living in poverty—are disabled.
26 percent—just under half of non-workers—are caregivers or students.
6 percent are retired, though it is important to note that only the working-age population is considered here, so this constitutes early retirement.
5 percent of the total population of working-age adults in poverty are not in the labor force and are neither disabled, a caregiver, a student, nor retired.

Certainly some share of those who are disabled, a caregiver, a student, or retired—as well as the remaining small fraction outside those groups—are people who are capable of employment. As Figure 3 illustrates, a portion of those living in poverty who are disabled, a caregiver, a student, or retired are indeed in the labor force.

Though 13 percent of working-age adults living in poverty are working full-time year-round, about twice as many were employed less than full-time year-round in 2014. Figure 3 further investigates the composition of working-age adults living in poverty that reported usually working part-time and who were working part-time in March 2015.

About 40 percent of those working part-time during the year are involuntarily part-time – meaning that they would like to work full time but cannot due to an economic reason such as inability to find a full-time job, employer reduction of hours, or slack work. Just under half of part-time workers were students, caregivers, or disabled. Only about 1 in 6 of these part-time workers worked fewer than 35 hours a week or less than 50 weeks a year for some other reason.

In order to address poverty, we must first know who is poor. Using the most recently available data on poverty, we describe the population living in poverty as well as the working-age poor. This analysis suggests that most deviations from full-time, full-year employment are readily explicable in terms of factors like disability, education, or caregiving.

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Another Goodbye to Democracy if Transatlantic Partnership is Passed

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Mon, 09 May 2016 15:53:00 +0000

MAY 6, 2016

Another Goodbye to Democracy if Transatlantic Partnership is Passed

by PETE DOLACK

Corporate control on both sides of the Atlantic will be solidified should the Transatlantic Trade and Investment Partnership be passed. Any doubt about that was removed when Greenpeace Netherlands released 13 chapters of the TTIP text, although the secrecy of the text and that only corporate representatives have regular access to negotiators had already made intentions clear.

Health, safety, environmental and food laws will all be at risk, with United States negotiators continuing to seek the elimination of European safeguards against genetically modified organisms. But European Union negotiators, although as yet unable to find sufficient common ground with their U.S. counterparts on some issues, are offering plenty of dubious language at the behest of European multi-national corporations.

The Transatlantic Trade and Investment Partnership is very much similar to the Trans-Pacific Partnership, and although negotiations over it are apparently far from complete it is firmly in the TPP’s anti-democratic spirit. The Transatlantic Partnership, just like other “free trade” agreements, has little to do with trade and much to do with granting the wish lists of corporate executives and financiers, complete with secret tribunals that can overturn legislation without appeal.

As is customary with “free trade” agreements, the devil is in the details. What really lies within the dry, bureaucratic language is text that leaves little, if any, room for democratic control over a wide range of legislative oversight. In part this is because the text uses words like “must” and “shall” for what signatory governments are expected to do on behalf of multi-national corporations but words like “may” and “can” when it comes to the very brief mentions of health, safety, environmental and labor concerns, and in part because of who will be interpret the text, and how.

Under existing “free trade” agreements, the countries with stronger regulations, such as Canada under the North American Free Trade Agreement, are routinely ordered to overturn them as “barriers” to trade. Smaller countries are routinely sued by multi-national corporations for attempting to safeguard sensitive environments or regulate tobacco, such as El Salvador’s attempt to protect its largest remaining water source from a gold mine. These suits are not heard in ordinary courts, but rather in secret tribunals in which corporate lawyers who specialize in representing multi-national capital in international disputes switch hats and sit in judgment of similar cases as judges.

Governments must meet corporate expectations

Such one-sided rules are imbedded in the Transatlantic Trade and Investment Partnership text. The leaked chapter on dispute settlement contains unmistakeable language. Multi-national corporations will be eligible to sueon the basis that “a benefit the Party could reasonably have expected to accrue to under this Agreement is being nullified or impaired.” A series of rulings handed down by the secret tribunals in similar cases have established that an “investor” is eligible to sue for any potential profits it asserts it would have earned had not a regulation it dislikes been in place.

The chapter goes on to set out the necessary qualifications of arbitrators, stating that they must have “expertise” in the field. These “experts” will almost inevitably be corporate lawyers as they fill the rosters of the secret tribunals. The clause that the judges “shall be independent and serve in their individual capacities” is a joke — these are people who have spent decades serving corporate clients and thoroughly absorb their clients’ perspective. That they have “officially” switched hats is meaningless.

That there will be no appeal against judgements handed down is exemplified three pages later. It is EU negotiators who propose these two sentences: “The ruling/report of the panel shall be unconditionally accepted by the Parties” and “The Party complained against shall take any measure necessary to comply promptly and in good faith with the panel ruling.” What these mean is that there can be no appeal against what tribunal panels consisting of three corporate lawyers decree and that laws must be changed immediately based on the secret tribunal’s ruling.

There is much more there. A reading of the chapter on sanitary and phytosanitary measures, which, inter alia, covers regulations on agriculture, can easily be interpreted to overturn bans on genetically modified organisms. Here is the chapter’s Article 11 as proposed by EU negotiators:

“1. Sanitary and phytosanitary procedures shall be established with the objective of minimizing negative trade effects and simplifying and expediting the approval and clearance process while ensuring the fulfillment of the importing Party’s requirements. 2. The Parties shall ensure that all sanitary and phytosanitary procedures affecting trade between the parties are undertaken and completed without undue delay and that they are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party.”

Corporations would get last word on regulation

Despite the European Commission’s attempts to paint itself as heroically standing against U.S. insistence on forcing GMOs on European consumers, this EU language could be interpreted to overturn bans on GMOs. That is especially so in the wake of the already agreed-upon language of Article 5, where we read:

“When issuing or submitting any final administrative decision for an SPS regulation, the Party shall make publicly available on the Internet an explanation of: … any alternative identified through public comments, including by a Party, as significantly less restrictive to trade.”

Under this clause, governments must make the case on behalf of complaining corporations that want to eliminate a protective regulation! There is further language demanding that any new regulation be justified, including a requirement that a government explain why it did not adopt any alternatives that would be “less restrictive to trade.” There is precedent here under the North American Free Trade Agreement, in which a tribunal, in ordering that Canada reverse a ban against PCBs, a carcinogen banned under two Canadian treaties, ruled that, when formulating an environmental rule, a government “is obliged to adopt the alternative that is most consistent with open trade.” So much for democracy!

There is also an agriculture chapter, which contains this sentence: “The Parties shall work together to facilitate the successful conclusion of agriculture negotiations in the WTO that substantially improves market access for agricultural goods.” All the activist work that prevented the conclusion of World Trade Organization talks over the past decade would be undone, and provide an additional opening for GMOs and the elimination of other safety rules.

Thus we should take with mounds of salt this public statement by European Trade Commissioner Cecilia Malmström, issued on May 2:

“Any EU trade deal can only change regulation by making it stronger. … No trade deal will limit our ability to make new rules to protect our citizens or environment in the future. I am simply not in the business of lowering standards.”

Commissioner Malmström further asserts that “no, the EU industry does not have greater access to EU negotiating positions than other stakeholders.” That statement is on par with someone offering to sell you the Brooklyn Bridge and the Eiffel Tower. The public-interest group Corporate Europe Observatory, upon successfully petitioning to receive documents from the European Commission, found that that of 127 closed meetings preparing for the Transatlantic Partnership talks, at least 119 were with large corporationsand their lobbyists. Although it is true that EU negotiators are sometimes at odds with their U.S. counterparts, the EU has offered its share of anti-democratic measures, not inconsistent with the lack of accountability Europeans have come to expect from EU institutions.

Watchdog groups sound multiple alarms

In its latest assessment of the Transatlantic Trade and Investment Partnership, Corporate Europe Observatory said the TTIP will negatively impact laws on both sides of the Atlantic, noting that “the new EU proposal on regulatory cooperation in TTIP does nothing, not even little, to address the upcoming democratic threats.” The Observatory says:

“Regulatory cooperation, on the surface a way to ‘harmonise’ rules across the Atlantic, could in practice weaken rules on protecting us against everything from toxic chemicals and unhealthy food, to wild speculation by banks. The European Commission recently published its new positions on this cooperation. The two chapters they released reveal the Commission is willing to change how it makes laws to favour trade and multinationals over all public interest considerations. Under regulatory cooperation trade officials will continue to negotiate our future and existing laws. This pushes contentious issues farther away from public scrutiny to be brokered over the coming years after TTIP is passed, giving big business lobby groups ample opportunities to influence the result of the decision-making.”

Other watchdog groups sound similar warnings. The Sierra Club, noting the words “climate change” never appear in the TTIP text, points out some of its environmentally destructive measures:

“Under the National Treatment terms of the leaked text, the U.S. Department of Energy would be required to automatically approve the export of liquefied natural gas to the EU. … Both the U.S. and the EU have proposed “regulatory cooperation” rules that would undermine climate and environmental protections if they are deemed harmful to trans-Atlantic trade or investment. The U.S. has proposed that governments on both sides of the Atlantic should be required to review proposed regulations before enactment to pursue compliance with ‘international trade and investment obligations.’ The EU has proposed similar language.”

Compliance with “international trade and investment obligations” would mean conforming to the types of secret-tribunal decisions mentioned above.

Friends of the Earth, in its review of the leaked text, provides this warning:

“Sensible regulatory safeguards, such as those related to food safety and toxic chemicals, among many others, would also be stymied. Industry-friendly, cost-benefit analysis would hamstring new environmental initiatives. For example, insecticide safety standards would be lowered if the undervalued ‘benefit’ of new regulations protecting the bees is outweighed by the ‘cost’ to corporate profits, thus threatening the pollinators necessary for our food system.”

Yep, it’s as bad as we thought it would be

The senior policy analyst for the Institute for Agriculture and Trade Policy, Steve Suppan, in noting that predictions about the TTIP’s impact on agriculture “have been sadly confirmed,” wrote:

“The text shows the U.S. Trade Representative protecting corporate interests by shielding environmental, health and safety data used in TTIP risk assessment as confidential business information, preventing peer scientific review. The end result of the U.S. proposal would be increasing the burden on governments to justify food safety rules while placing no burden on industry to demonstrate that its products—including new kinds of GMOs, food or agri-nanotechnology products—are safe.”

What we have here is the ordinarily and normal course of capitalist logic. There is no real point to seeing something inherently evil in U.S. or EU officials or their having some particular moral failing. These governments reflect the dominant interests within their countries, as is the case in all capitalist countries. Large industrialists and financiers dominate their societies through control of the mass media and a range of other institutions to the point that their preferred policies become, through heavy repetition, the dominant ideas across society and the ideas adopted by political leaders intellectually and financially dependent on them.

Thus the recent revelations of NSA spying in Europe have had no effect on the Transatlantic Partnership negotiations. The talks began, on schedule, with embarrassing discussions of spying relegated to a “parallel” track, separate from what really counts, the main negotiations to dismantle regulations. The TTIP is quite consistent with the project of the EU: European capitalists’ desire to possess the ability to challenge the United States for economic supremacy, but who cannot do so without the combined clout of a united continent.

Working people on both sides of the Atlantic will be the losers if the TTIP passes, and that is underscored by the secrecy surrounding it. Capitalists, despite the competition among them, are united in their drive for complete domination and profits above all other human considerations. We had better be united across borders in the necessary fight to first stop TTIP and other agreements under consideration, and then roll back those already in place.

Join the debate on Facebook

Pete Dolack writes the Systemic Disorder blog and has been an activist with several groups. His book, It’s Not Over: Learning From the Socialist Experiment, is available from Zero Books.

The rich simply can’t lose in our rigged economy

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Tue, 03 May 2016 14:06:00 +0000

Salon

TUESDAY, MAY 3, 2016 04:15 AM EDT

Robert Reich: The rich simply can’t lose in our rigged economy

Yahoo's Marisa Mayer nets $50 million even if she's canned. Why must the stakes be so high for the rest of us?

ROBERT REICH, ROBERTREICH.ORG

TOPICS: BERNIE SANDERS, CAPITALISM, DONALD TRUMP, MARISA MAYER, ROBERTREICH.ORG, YAHOO, BUSINESS NEWS, POLITICS NEWS

This originally appeared on Robert Reich's blog.

Marissa Mayer tells us a lot about why Americans are so angry, and why anti-establishment fury has become the biggest single force in American politics today.

Mayer is CEO of Yahoo. Yahoo’s stock lost about a third of its value last year, as the company went from making $7.5 billion in 2014 to losing $4.4 billion in 2015. Yet Mayer raked in $36 million in compensation.

Even if Yahoo’s board fires her, her contract stipulates she gets $54.9 million in severance. The severance package was disclosed in a regulatory filing last Friday with the Securities and Exchange Commission.

In other words, Mayer can’t lose.

It’s another example of no-lose socialism for the rich – winning big regardless of what you do.

Why do Yahoo’s shareholders put up with it? Mostly because they don’t know about it.

Most of their shares are held by big pension funds, mutual funds, and insurance funds whose managers don’t want to rock the boat because they skim the cream regardless of what happens to Yahoo.

In other words, more no-lose socialism for the rich.

I don’t want to pick on Ms. Mayer or the managers of the funds that invest in Yahoo. They’re typical of the no-lose system in which America’s corporate and financial elite now operate.

But the rest of America works in a different system.

Theirs is cutthroat hyper-capitalism – in which wages are shrinking, median household income continues to drop, workers are fired without warning, two-thirds are living paycheck to paycheck, and employees are being classified as “independent contractors” without any labor protections at all.

Why is there no-lose socialism for the rich and cutthroat hyper-capitalism for everyone else?

Because the rules of the game – including labor laws, pension laws, corporate laws, and tax laws – have been crafted by those at the top, and the lawyers and lobbyists who work for them.

Does that mean we have to await Bernie Sanders’s “political revolution” (or, perish the thought, Donald Trump’s authoritarian populism) before any of this is likely to change?

Before we go to the barricades, you should know about another CEO named Hamdi Ulukaya, who’s developing a third model – neither no-lose socialism for the rich nor hyper-capitalism for everyone else.

Ulukaya is the Turkish-born founder and CEO of Chobani, the upstart Greek yogurt maker recently valued at as much as $5 billion.

Last Tuesday Ulukaya announced he’s giving all his 2,000 full-time workers shares of stock worth up to 10 percent of the privately held company’s value when it’s sold or goes public, based on each employee’s tenure and role at the company.

If the company ends up being valued at $3 billion, for example, the average employee payout could be $150,000. Some long-tenured employees will get more than $1 million.

Ulukaya’s announcement raised eyebrows all over corporate America. Many are viewing it an act of charity (Forbes Magazine calls it one of “the most selfless corporate acts of the year”).

In reality, Mr. Ulukaya’s decision is just good business. Employees who are partners become even more dedicated to increasing a company’s value.

Which is why research shows that employee-owned companies – even those with workers holding only a minority stake – tend to out-perform the competition.

Mr. Ulukaya just increased the odds that Chobani will be valued at more than $5 billion when it’s sold or its shares of stock are available to the public. Which will make him, as well as his employees, far wealthier.

As Ulukaya wrote to his workers, the award isn’t a gift but “a mutual promise to work together with a shared purpose and responsibility.”

A handful of other companies are inching their way in a similar direction.

Apple decided last October it would award shares not just to executives or engineers but to hourly paid workers as well. Twitter CEO Jack Dorsey is giving a third of his Twitter stock (about 1 percent of the company) ”to our employee equity pool to reinvest directly in our people.“

Employee stock ownership plans, which have been around for years, are lately seeing a bit of a comeback.

But the vast majority of American companies are still locked in the old hyper-capitalist model that views workers as costs to be cut rather than as partners to share in success.

That’s largely because Wall Street still looks unfavorably on such collaboration (remember, Chobani is still privately held).

The Street remains obsessed with short-term stock performance, and its analysts don’t believe hourly workers have much to contribute to the bottom line.

But they’re prepared to lavish unprecedented rewards on CEOs who don’t deserve squat.

Let them compare Yahoo with Chobani in a few years, and see which model works best.

If I were a betting man, I’d put my money on Greek yoghurt.

And I’d bet on a model of capitalism that’s neither no-lose socialism for the rich nor cruel hyper-capitalism for the rest, but share-the-gains capitalism for everyone.

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His new movie "Inequality for All" is in Theaters. His widely-read blog can be found atwww.robertreich.org.

Capitalism Makes Us Destroy Our Planet

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Fri, 29 Apr 2016 17:58:00 +0000

The Devil Capitalism Makes Us Destroy Our Planet

by Gary Engler / April 28th, 2016

Okay, here’s the proposition — you can have a good job, decent pay, lots of overtime, but only if you give me your grandchildren or maybe your great-grandchildren.

Would you make this deal with the devil?

This is pretty much the choice currently offered workers by the captains of the carbon extraction, transportation and burning industries.

In fact, in a more general sense, it seems to be the choice being forced upon many governments around the world by the devil, which has taken the form of our current economic system.

Capitalism is asking us to choose between jobs and the future livability of our planet. Capitalism tells us it makes sense to flood some of the best food growing land in B.C. and build a dam to provide electricity for Alberta’s tar sands; capitalism says build more pipelines across B.C. and allow hundreds more oil tankers every year to sail through pristine waters; capitalism doesn’t care that more carbon extraction will guarantee our planet is cooked.

Capitalism, especially the current neoliberal version, says profitability should be the sole criteria by which we decide what gets built, what services are provided and who works. If there’s a profit to be made, let’s invest in it. Don’t do it if there’s no profit to be made. The ‘invisible hand’ of the market will solve all our problems.

Profits bring jobs, the capitalist devil whispers in our ears. Jobs! So you can overcome or avoid the misery of unemployment. Jobs! So you won’t fall behind on your mortgage, your credit card payments or your student loan. Jobs! So you will be able to buy ever more stuff that you don’t really need but somehow those great commercials convince you otherwise.

“Think about the jobs!” the devil/capitalism repeats over and over again. When brave critics ask: “What about the consequences to our environment?” the devil/capitalism answers: “Don’t listen to those Leap-ing people. They’re radicals. They’re tree-hugging, moonbeam-chasing hippies. They’re Original People. They’re anti-development. They’re socialists. They’re from downtown Toronto. Think about the jobs!”

So what do we do? Listen to the devil and build more pipelines, tar sands plants, fracked oil wells, housing that requires ever more carbon-spewing automobiles and tell ourselves that we are not responsible for what happens to our grandchildren?

Or do we cast out the devil? Tell the beast we do not have to choose between jobs and the environment, that, in fact, there will be more jobs in a sustainable energy-based economy. Proclaim loudly that, if forced to choose between capitalism and the environment, we will choose the environment every glorious day on this wondrous planet.

The truth is the devil’s way leads to hell on earth. Building our economy solely on capitalist greed for profit has placed us all, lobster-like, into a pot of hot water that is only a few degrees away from cooking our great-grandchildren. Our most critical task right now is figuring out a way of getting out of the pot and turning down the heat.

The good news is the devil’s way is not the only way, despite the constant media bombardment proclaiming that to be so. Humankind has followed the devil/capitalism path for only a relatively short time. We have tens of thousands of years of history proving that we can organize our lives around values other than greed for profit. Even today, in the midst of the most capitalist-dominated period ever, most of our lives, outside of paid work, is based on love, caring, sharing, solidarity, respect and doing what’s best for our collective future. This is called family and community.

If we can just come to the understanding that an economic and political system can also be based on these ‘community values’ we would have a path to building a viable alternative to the mess we are in.

The devil promotes the idea that we have no alternative to the way things are, but if all the people who care about their grandchildren come together to talk about a better way, we can have jobs, lower the temperature and save our planet for future generations.

Gary Engler is journalist and novelist from Vancouver. Read other articles by Gary.

This article was posted on Thursday, April 28th, 2016 at 3:42pm and is filed under Capitalism, Environment, Neoliberalism.

Thomas Frank on How Democrats Went From Being the ‘Party of the People’ to the Party of Rich Elites

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Wed, 27 Apr 2016 19:36:00 +0000

In These Times

WEB ONLY / FEATURES » APRIL 26, 2016

Thomas Frank on How Democrats Went From Being the ‘Party of the People’ to the Party of Rich Elites

Democrats have gone from the party of the New Deal to a party that is defending mass inequality.

BY TOBITA CHOW

The Democratic Party was once the party of the New Deal and the ally of organized labor. But by the time of Bill Clinton's presidency, it had become the enemy of New Deal programs like welfare and Social Security and the champion of free trade deals. What explains this apparent reversal? Thomas Frank—best known for his analysis of the Republican Party base in What's the Matter with Kansas?—attempts to answer this question in his latest book, Listen Liberal: Or, What Ever Happened to the Party of the People?

According to Frank, popular explanations which blame corporate lobby groups and the growing power of money in politics are insufficient. Frank instead points to a decision by Democratic Party elites in the 1970s to marginalize labor unions and transform from the party of the working class to the party of the professional class. In so doing, the Democratic Party radically changed the way it understood social problems and how to solve them, trading in the principle of solidarity for the principle of competitive individualism and meritocracy. The end result is that the party which created the New Deal and helped create the middle class has now become “the party of mass inequality.” In These Times spoke with Frank recently about the book via telephone.

The book is about how the Democratic Party turned its back on working people and now pursues policies that actually increase inequality. What are the policies or ideological commitments in the Democratic Party that make you think this?

The first piece of evidence is what’s happened since the financial crisis. This is the great story of our time. Inequality has actually gotten worse since then, which is a remarkable thing. This is under a Democratic president who we were assured (or warned) was the most liberal or radical president we would ever see. Yet inequality has gotten worse, and the gains since the financial crisis, since the recovery began, have gone entirely to the top 10 percent of the income distribution.

This is not only because of those evil Republicans, but because Obama played it the way he wanted to. Even when he had a majority in both houses of Congress and could choose whoever he wanted to be in his administration, he consistently made policies that favored the top 10 percent over everybody else. He helped out Wall Street in an enormous way when they were entirely at his mercy.

He could have done anything he wanted with them, in the way that Franklin Roosevelt did in the ‘30s. But he chose not to.

Why is that? This is supposed to be the Democratic Party, the party that’s interested in working people, average Americans. Why would they react to a financial crisis in this way? Once you start digging into this story, it goes very deep. You find that there was a transition in the Democratic Party in the ‘70s, 80’s and ‘90s where they convinced themselves that they needed to abandon working people in order to serve a different constituency: a constituency essentially of white-collar professionals.

That’s the most important group in their coalition. That’s who they won over in the ’70s, ’80s and ’90s. That’s who they serve, and that’s where they draw from. The leaders of the Democratic Party are always from this particular stratum of society.

A lot of progressives that I talk to are pretty familiar with the idea that the Democratic Party is no longer protecting the interests of workers, but it’s pretty common for us to blame it on mainly the power of money in politics. But you start the book in chapter one by arguing there’s actually something much deeper going on. Can you say something about that?

Money in politics is a big part of the story, but social class goes deeper than that. The Democrats have basically made their commitment [to white-collar professionals] already before money and politics became such a big deal. It worked out well for them because of money in politics. So when they chose essentially the top 10 percent of the income distribution as their most important constituents, that is the story of money.

It wasn’t apparent at the time in the ‘70s and ‘80s when they made that choice. But over the years, it has become clear that that was a smart choice in terms of their ability to raise money. Organized labor, of course, is no slouch in terms of money. They have a lot of clout in dollar terms. However, they contribute and contribute to the Democrats and they almost never get their way—they don’t get, say, the Employee Free Choice Act, or Bill Clinton passes NAFTA. They do have a lot of money, but their money doesn’t count.

All of this happened because of the civil war within the Democratic Party. They fought with each other all the time in the ‘70s and the ‘80s. One side hadn’t completely captured the party until Bill Clinton came along in the ‘90s. That was a moment of victory for them.

Bill Clinton’s presidency is what progressives usually cite as the time when things went bad. But there’s a trend that goes back to the ’70s, right?

Historians always cite the ’68 election as the turning point. The party was torn apart by the controversy over the Vietnam war, protesters were in the streets in Chicago and the Democratic candidate Hubert Humphrey went on to lose. Democrats thought this was terrible, and it was. So they set up a commission to reorganize the party, the McGovern Commission.

The McGovern Commission basically set up our modern system of primaries. Before the commission, we didn’t have these long primary contests in state after state after state. Primaries are a good thing, as were most things the McGovern Commission did.

But they also removed organized labor from its structural position of power in the Democratic Party. There was a lot of resentment towards labor during the Vietnam War. A lot of unions took President Johnson’s side on Vietnam. There was also this sense—which I think was correct at the time—that labor was a dinosaur, that it was out of touch and undemocratic and very white.

There were a lot of reasonable objections to organized labor at the time. The problem is, when you get rid of labor in your party, you also get rid of issues that matter to working people. That’s the basic mistake that Democrats made in the ’70s. Of course, labor still is a big part of the Democratic coalition—it gives them their money, it helps out at election time in a huge way. But unions no longer have the presence in party councils that they used to. That disappeared.

One of the most shocking quotes in the book is from Alfred Kahn, an advisor to Jimmy Carter, who said, “I’d love the Teamsters to be worse off. I’d love the automobile workers to be worse off.” He then basically says that unionized workers are exploiting other workers.

Isn’t that amazing? He’s describing a situation in the 1970s. There was all this controversy in the 1970s about labor versus management—this was the last decade where those fights were front and center in our national politics. And he’s coming down squarely on the side of management in those fights.

And remember, Kahn was a very important figure in the Carter administration. The way that he describes unions is incorrect—he’s actually describing professionals. Professionals are a protected class that you can’t do anything about—they’re protected by the laws of every state that dictate who can practice in these fields. It’s funny that he projects that onto organized labor and holds them responsible for the sins of another group.

This is a Democrat in an administration that is actually not very liberal. This is the administration that carried out the first of the big deregulations. This is the administration that had the great big capital gains tax cuts, that carried out the austerity plan that saw the Federal Reserve jack its interest rates sky high. They clubbed the economy to the ground in order to stop “wage inflation,” in which workers, if they have enough power, can keep demanding higher wages. It was incredible.

What’s the content of the ideology of the professional class and how does it hurt working people? What are their guiding principles?

The first commandment of the professional class is the idea of meritocracy, which allows people to think that those on top are there because they deserve to be. With the professional class, it’s always associated with education. They deserve to be there because they worked really hard and went to a good college and to a good graduate school. They’re high achievers. Democrats are really given to credentialism in a way that Republicans aren’t.

If you look at the last few Democratic presidents, Bill Clinton and Obama, and Hillary Clinton as well, their lives are a tale of educational achievement. This is what opened up the doors of the world to them. It’s a party of who people who have gotten where they are by dint of educational accomplishment.

This produces a set of related ideas. When the Democrats, the party of the professionals, look at the economic problems of working-class people, they always see an educational problem, because they look at working class people and say, “Those people didn’t do what I did”: go and get advanced degrees, go to the right college, get the high SAT scores and study STEM or whatever.

There’s another interesting part of this ideology: this endless search for consensus. Washington is a city of professionals with advanced degrees, and Democrats look around them there and say, “We’re all intelligent people. We all went to good schools. We know what the problems are and we know what the answers are, and politics just get in the way.”

This is a very typical way of thinking for the professional class: reaching for consensus, because politics is this ugly thing that you don’t really need. You see this in Obama’s endless efforts to negotiate a grand bargain with Republicans because everybody in Washington knows the answers to the problems—we just have to get together, sit down and make an agreement. The same with Obamacare: He spent so many months trying to get Republicans to sign on, even just one or two, so that he could say it was bipartisan. It was an act of consensus. And the Republicans really played him, because they knew that’s what he’d do.

To go back to your point about education: At one point you quote Arne Duncan, who was Obama’s secretary of education, saying that the only way to end poverty is through education. Why can’t that work?

The big overarching problem of our time is inequality. If you look at historical charts of productivity and wage growth, these two things went hand in hand for decades after World War II, which we think of as a prosperous, middle-class time when even people with a high school degree, blue-collar workers, could lead a middle class life. And then everything went wrong in the 1970s. Productivity continued to go up and wage growth stopped. Wage growth has basically been flat ever since then. But productivity goes up by leaps and bounds all the time. We have all of these wonderful technological advances. Workers are more productive than ever but they haven’t benefited from it. That’s the core problem of inequality.

Now, if the problem was that workers weren’t educated enough, weren’t smart enough, productivity would not be going up. But that productivity line is still going up. So we can see that education is not the issue.

It’s important that people get an education, of course. I spent 25 years of my life getting an education. It’s basic to me. It’s a fundamental human right that people should have the right to pursue whatever they want to the maximum extent of their individual potential. But the idea that this is what is holding them back is simply incorrect as a matter of fact. What’s holding them back is that they don’t have the power to demand higher wages.

If we talk about the problem as one of education rather than power, then the blame goes back to these workers. They just didn’t go out and work hard and do their homework and get a gold star from their teacher. If you take the education explanation for inequality, ultimately you’re blaming the victims themselves.

Unfortunately, that is the Democratic view. That’s why Democrats have essentially become the party of mass inequality. They don’t really have a problem with it.

So really, the solution would have to be solidarity and organized power.

That was an essential point that I try to make in Listen Liberal: that there is no solidarity in a meritocracy. A meritocracy really is every man for himself.

Don’t get me wrong. People at the top of the meritocracy, professionals, obviously have enormous respect for one another. That is the nature of professional meritocracy. They have enormous respect for the people at the top, but they feel very little solidarity for people beneath them who don’t rise in the meritocracy.

Look at the white-collar workplace. If some professional gets fired, the other professionals don’t rally around and go on strike or protest or something like that. They just don’t do that. They feel no solidarity because everything goes back to you and whether or not you’ve made the grade. If somebody gets fired, they must’ve deserved it somehow.

I have my own personal experience. Look at academia over the last 20 years. They’re cranking out these Ph.D.s in the humanities who can’t get jobs on tenure track and instead have to work as adjuncts for very low pay, no benefits. One of the fascinating parts about this is that, with a few exceptions, the people who do have tenure-track jobs and are at the top of their fields, do very little about what’s happened to their colleagues who work as adjuncts. Essentially this is the Uberizing of higher education. The professionals who are in a position of authority have done almost nothing about it. There are academics here and there who feel bad about what’s happened to adjuncts and do say things about it, but by and large, overall, there is no solidarity in that meritocracy. They just don’t care.

Do you think there’s a connection between the fact that the Democratic Party has turned against workers and the rise of Donald Trump?

Yes. Because if you look at the polling, Trump is winning the votes of a lot of people who used to be Democrats. These white, working-class people are his main base of support. As a group, these people were once Democrats all over the country. These are Franklin Roosevelt’s people. These are the people that the Democrats essentially decided to turn their backs on back in the 1970s. They call them the legatees of the New Deal. They were done with these guys, and now look what’s happened—they’ve gone with Donald Trump. That’s frightening and horrifying.

But Trump talks about their issues in a way that they find compelling, especially the trade issue. When he talks about trade, they believe him. Ironically, he’s saying the same things that Hillary Clinton and Bernie Sanders are saying about trade, but for whatever reason people find him more believable on this subject than they do Hillary Clinton.

Do you think that the rise of the Bernie campaign could herald a new era in the history of the Democratic Party?

I hope so. Both Trump and Bernie are turning their respective parties upside down. What Bernie is doing is very impressive. I interviewed him a few years ago and have always admired him. I think he’s a great man. To think that he could beat a Clinton in a Democratic primary anywhere in this country, let alone many primaries, was unthinkable a short time ago. And he’s done it without any Wall Street or big-business backing. That is extraordinary. It shows the kind of desperation that’s out there.

He has shown the way, and whether he gets the nomination or not (he probably won’t), there’ll be another Bernie four years from now. And there’ll also be another Trump. The Republican Party is being turned on its head much more violently than the Democrats. Hillary will probably get the nomination. I live in Washington, D.C., and I spend time around Hillary-style Democrats. They really think that they’ve got this thing in the bag. And I don’t just mean her versus Bernie. I mean the Democratic Party winning the presidency for the rest of our lives. From here to eternity. They can choose whoever they want. They could nominate anybody and they would win. They think they’re in charge.

One of your villains from the ’70s is Frederick Dutton, who wrote a book about how the Democratic Party needed to realign itself. You have a quote from him saying, “Every major realignment in U.S. political history has been accompanied by the coming of a large new group into the electorate.” You’re very critical of how he uses that idea in the ‘70s. But if you look at the newer voters attached to the Bernie campaign, it looks like the Democratic Party is experiencing something like that now.

Yes, in both cases you’re talking about a generational shift. That’s what he meant in 1971. He was talking about the counterculture and the “Now Generation” and the idea that they would come into the electorate and demand a different kind of politics—specifically his kind of politics.

Everybody always sees this new group that’s coming in as supporting what they want. That’s what he thought. I have a certain amount of contempt for that. Many years ago I wrote a book about the counterculture and how it was used for this purpose—specifically by the advertising industry. But Bernie’s doing the same thing. He’s using it for his own purposes.

Millenials’ take on the world is fascinating. Just a few years ago, people thought of them as very different. But now they’re coming out of college with enormous student debt, and they’re discovering that the job market is casualized and Uberized. The work that they do is completely casual. The idea of having a middle-class lifestyle in that situation is completely off the table for them.

Every time I think about these people, it burns me up. It makes me so angry what we’ve done to them as a society. It really gives the lie to Democratic Party platitudes about the world an education will open up for you. That path just doesn’t work anymore. Millenials can see that in their own lives very plainly.

So I’m very excited that they’re pro-Bernie. They really are the future.

TOBITA CHOW

Tobita Chow is chair of The People’s Lobby, an independent political organization based in Chicago, and co-author of "The Movement We Need," a pamphlet on analysis and strategy for the progressive movement. He has been involved in faith-based community organizing on the South Side of Chicago since 2009, and is a leader in the “Moral Mondays Illinois” campaign against state budget cuts. He is an MDiv student at the Lutheran School of Theology at Chicago.

Bill and Hillary Clinton gutted welfare and criminalized the poor, all while funneling more money into the carceral [prison] state.

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Wed, 27 Apr 2016 01:35:00 +0000

JACOBIN

Reason in Revolt

How a Democrat Killed Welfare

Bill Clinton gutted welfare and criminalized the poor, all while funneling more money into the carceral state.

by Premilla Nadasen

Illustration by Luca Yety Battaglia

Bill Clinton’s 1992 election was meant to be a turning point in American politics. Liberals breathed a sigh of relief, believing him to be a much-needed break from the Reagan-Bush era of “small government” and social welfare cuts.

But the optimism surrounding Clinton’s election — and favorable assessments of his time in office since — ignore the destruction his administration brought to poor and working people, especially African Americans, and mask not only the continuation but intensification of anti-poor policies. Rather than offering a reprieve from punitive austerity, Clinton took the Reagan-Bush agenda a step further. If his administration was a turning point, it turned us in the wrong direction.

In 1994, Clinton signed the Violent Crime Control and Law Enforcement Act, the largest crime bill in history, which allocated $10 billion for prison construction, expanded the death penalty, and eliminated federal funding for inmate education. The act intensified police surveillance and racial profiling, and locked up millions for nonviolent offenses such as drug possession. It helped usher in the era of mass incarceration that devastated communities of color (for whichClinton himself has recently apologized).

Clinton’s simultaneous expansion of federal law enforcement and shrinking of the federal workforce to its lowest level in thirty years reallocated taxpayer dollars from employing people in social service jobs to putting more cops on the streets.

The starkest example of the many racist and anti-poor measures directed at African Americans and passed during his administration was the 1996 welfare reform bill, which transformed welfare from an exclusive and unequal cash assistance system that stigmatized its recipients into one that actually criminalized them.

The Personal Responsibility and Work Opportunity Reconciliation Act ended traditional welfare by turning a federal entitlement, Aid to Families with Dependent Children (AFDC), into block grants, or Temporary Assistance to Needy Families (TANF). TANF established tougher mandates on poor single mothers and gave states more flexibility in how they spent welfare dollars (opening the door for increased discrimination against minorities).

It prohibits anyone from receiving assistance for more than two consecutive years or for more than five years over the course of their life. The act also requires aid recipients to be employed, in most cases, at least thirty hours a week to get their welfare checks, amounting to an hourly wage well below the legal minimum.

Once recipients reach their program time limit, TANF forces them even further into the labor market with little consideration of how they could ensure their children are properly cared for or whether paid employment will earn them an adequate wage. Many more are not even able to find work. A 2012 report by the Urban Instituteconcluded that for recipients with barriers to employment, TANF did little to help them find jobs.

Sweeping in scope, TANF contains clauses to bolster marriage, mandate job training, and offer parenting classes. The “flexibility” that was a hallmark of the welfare reform bill enabled states to shift welfare funds away from direct cash assistance toward child care programs or subsidies for companies hiring welfare recipients, meaning that a greater portion of public welfare dollars went to the private sector.

States were pressured to reduce welfare rolls — now the singular quantitative measure of success for the program — and used multiple strategies to deter the needy from applying for aid. They implemented complicated and demeaning application procedures and relied on fingerprinting and drug testing to weed out the “criminal element” — even though there was little evidence of widespread criminal activity among recipients.

The net result was that all recipients and applicants were assumed to be potential criminals. Surveillance of low-income women punished black women in disproportionate numbers, resulting in more black children in foster care and black women in prison. Today, welfare and law enforcement work together to closely monitor the parenting of poor mothers.

These punitive policies were not new, but rather an extension of a long, racialized attack on welfare. AFDC was not controversial when it was instituted in the 1930s. Many people subscribed to traditional ideas about gender roles, believing that poor single mothers without a male breadwinner should be supported by the state in order to enable them to stay home and care for their children.

The overwhelming majority of recipients at the time, however, were white women. Women of color were considered less deserving of assistance. State and local social administrators of AFDC, especially in the South, systematically excluded African Americans and Mexican Americans from welfare receipt through “suitable home clauses” and “employable mother laws,” which denied assistance to mothers who didn’t keep “proper” homes or who it was believed could get a job and become self-supporting.

As black migration to the North intensified, more women of color applied for assistance, resulting in opposition to the welfare program. Journalists wrote about welfare fraud and the “problem” of black migration, and there were growing calls to get people off the rolls. In 1967, the Johnson administration instituted a Work Incentive Program (WIN), the first-ever mandatory federal employment rule for AFDC, requiring states to direct a portion of their welfare population to employment programs.

This landmark legislation shifted the role of welfare away from support for single mothers toward one of requiring those mothers to take paid employment outside the home. Although symbolically important because it signaled a new direction in federal policy, WIN was never adequately funded nor effectively enforced. The welfare rights movement in the 1960s and 1970s opposed the mandatory work rules and fought for higher monthly benefits, tempering some of these regressive policies. But only temporarily.

The punitive approach to addressing poverty was a result of the way race and poverty had become intertwined in the national debate. In the 1960s, urban social disorder, black demands for economic equality, and federal anti-poverty initiatives drew the nation’s attention to the persistent problem of black poverty. But the dominant liberal approach explained poverty as a product of black culture, reinforcing the notion that certain poor people were responsible for their own poverty.

Most notoriously articulated by Daniel Patrick Moynihan in “The Negro Family: The Case for National Action,” the culture of poverty argument suggested that a dysfunctional family structure — in particular single-parent families — was a primary reason for persistent African-American inequality.

The solution became one of attempting to instill proper values of work and marriage in black men and women. Poor black women were demonized as “welfare queens,” a trope popularized by Reagan in the 1970s and 1980s, which implied that black women chose welfare over work and milked the system for all it was worth. This rhetoric was used to justify sweeping cuts in welfare spending.

Likewise, Clinton’s welfare reform bill was rooted in a culture of poverty argument, evidenced by his racially coded language of dependency and people taking advantage of the system. Stereotypes about women were the foundation of the 1996 welfare reform debate.

Clinton alluded to the fear of black street crime, drug use, crack babies, the breakdown of the family, and the drain on public dollars. His primary goal in dismantling AFDC, as he put it, was to end the “cycle of dependence” and “achieve a national welfare reform bill that will make work and responsibility the law of the land.”

Clinton did not offer a departure from either earlier liberal policies that blamed the poor for their poverty or neoliberal economics. Instead, he turned what had been a few piecemeal reforms into a systematic overhaul of federal policy that led to the criminalization of the welfare poor. He redirected state resources away from financial support for the needy and toward surveillance and criminalization.

In an era of market worship, those who couldn’t demonstrate self-reliance or independence were identified not only as unworthy of assistance, but as a potential threat to the core institutions of American society.

Clinton’s dismantling of welfare, couched in a language of personal responsibility and public policy correction, was the culmination of a trend among both Democrats and Republicans to deter and discourage poor women of color from applying for assistance. In this regard, there was little new about the “New Democrat.”

Neoliberalism: the ideology at the root of all our problems

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Fri, 22 Apr 2016 01:39:00 +0000

The Guardian

US edition

Economics

Neoliberalism: the ideology at the root of all our problems

Financial meltdown, environmental disaster and even the rise of Donald Trump - neoliberalism has played a part in them all. Why has the left failed to come up with an alternative?

George Monbiot

@GeorgeMonbiot

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?

So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.

Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it’s unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.

***

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes inMasters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.

Something else happened during this transition: the movement lost its name. In 1951, Friedman was happy to describe himself as a neoliberal. But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.

At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was almost universal: John Maynard Keynes’s economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarrassment, developing new public services and safety nets.

But in the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change ... there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, “it is hard to think of another utopia to have been as fully realised.”

***

It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”. But, as Hayek remarkedon a visit to Pinochet’s Chile – one of the first nations in which the programme was comprehensively applied – “my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism”. The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

Naomi Klein documented that neoliberals advocated the use of crises to impose unpopular policies while people were distracted. Photograph: Anya Chibis for the Guardian

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, the Iraq war and Hurricane Katrina, which Friedman described as “an opportunity to radically reform the educational system” in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.

The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel.

In Mexico, Carlos Slim was granted control of almost all phone services and soon became the world’s richest man. Photograph: Henry Romero/Reuters

Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich, has had a similar impact. “Like rent,” he argues, “interest is ... unearned income that accrues without any effort”. As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.

Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.

Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.

Slogans, symbols and sensation … Donald Trump. Photograph: Aaron Josefczyk/Reuters

Chris Hedges remarks that “fascist movements build their base not from the politically active but the politically inactive, the ‘losers’ who feel, often correctly, they have no voice or role to play in the political establishment”. When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Trump, for example, facts and arguments appear irrelevant.

Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power. The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to “cajoling, threatening and ultimately coercing people to obey them”.

***

Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.

The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch, two of the richest men in the world, founded the institute that set up the Tea Party movement. We find that Charles Koch, in establishing one of his thinktanks, noted that “in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised”.

The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations. What “the market wants” tends to mean what corporations and their bosses want. “Investment”, as Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation.

A century ago, the nouveau riche were disparaged by those who had inherited their money. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the relationship has been reversed: the rentiers and inheritors style themselves entre preneurs. They claim to have earned their unearned income.

These anonymities and confusions mesh with the namelessness and placelessness of modern capitalism: the franchise model which ensures that workers do not know for whom they toil; the companies registered through a network of offshore secrecy regimes so complex that even the police cannot discover the beneficial owners; the tax arrangements that bamboozle governments; the financial products no one understands.

The anonymity of neoliberalism is fiercely guarded. Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively. But they offer us no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s classic work, Capitalism and Freedom.

***

For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.

Neoliberalism’s triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was ... nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.

Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.

What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.

• George Monbiot’s How Did We Get into This Mess? is published this month by Verso.

Why Is One of Sanders' Most Important Proposals Being Ignored?

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Wed, 20 Apr 2016 13:29:00 +0000

ECONOMY

Robert Reich: Why Is One of Sanders' Most Important Proposals Being Ignored?

Bernie's idea to tax financial speculation is right on the money, and not even radical. What gives?

By Robert Reich / RobertReich.org

April 19, 2016

Photo Credit: via YouTube

Why is there so little discussion about one of Bernie Sanders’s most important proposals – to tax financial speculation?

Buying and selling stocks and bonds in order to beat others who are buying and selling stocks and bonds is a giant zero-sum game that wastes countless resources, uses up the talents of some of the nation’s best and brightest, and subjects financial market to unnecessary risk.

High-speed traders who employ advanced technologies in order to get information a millisecond before other traders get it don’t make financial markets more efficient. They make them more vulnerable to debacles like the “Flash Crash” of May 2010.

Wall Street Insiders who trade on confidential information unavailable to small investors don’t improve the productivity of financial markets. They just rig the game for themselves.

Bankers who trade in ever more complex derivatives – making bets on bets – don’t add real value. They only make the system more vulnerable to big losses, as occurred in the financial crisis of 2008.

All of which makes Bernie Sanders’s proposal for a speculation tax right on the mark.

He wants to tax stock trades at a rate of 0.5 percent (a trade of $1,000 would cost of $5), and bond trades at 0.1 percent.

The tax would reduce incentives for high-speed trading, insider deal-making, and short-term financial betting. (Hillary Clinton also favors a financial transactions tax but only on high-speed trading.)

Another big plus: Given the gargantuan size of the financial market and the huge volume of trading occurring within it every day, this tiny tax would generate lots of revenue.

Even a 0.01 percent transaction tax (a basis point is one-hundredth of a percentage point, or 0.01 percent) would raise $185 billion over 10 years, according to the nonpartisan Tax Policy Center.

Sanders’s 0.5 percent tax could thereby finance public investments that enlarge the economic pie rather than merely rearrange its slices – like tuition-free public education.

After all, Americans pay sales taxes on all sorts of goods and services yet Wall Street traders pay no sales taxes on the stocks and bonds they buy.

Which helps explain why the financial industry generates about 30 percent of America’s corporate profits but pays only about 18 percent of corporate taxes.

Naysayers led by the financial industry’s lobbyists (the Financial Services Roundtable and Financial Markets Association) warn that even a small tax on financial transactions would drive trading overseas, since financial trades can easily be done anywhere.

Baloney. The U.K. has had a tax on stock trades for decades yet remains one of the world’s financial powerhouses. Incidentally, that tax raises about 3 billion pounds yearly (the equivalent of $30 billion in an economy the size of the U.S.), which is pure gravy for Britain’s budget.

At least 28 other countries also have such a tax, and the European Union is well on the way to implementing one.

Industry lobbyists also claim the costs of the tax will burden small investors such as retirees, business owners, and average savers.

Wrong again. The tax wouldn’t be a burden if it reduces the volume and frequency of trading – which is the whole point.

In fact, the tax is highly progressive. The Tax Policy Center estimates that 75 percent of it would be paid by the richest fifth of taxpayers, and 40 percent by the top 1 percent.

It’s hardly a radical idea.

Between 1914 and 1966, the United States itself taxed financial transactions. During the Great Depression, John Maynard Keynes urged wider use of such a tax to reduce excessive speculation by financial traders. After the Wall Street crash of October 1987, even the first President George Bush endorsed the idea.

Americans are fed up with Wall Street’s financial games. Excessive speculation contributed to the near meltdown of 2008 – which cost millions of people their jobs, savings, and homes.

So why is it only Bernie Sanders who’s calling for a financial transactions tax? Why aren’t politicians of all stripes supporting it? And why isn’t it a major issue in the 2016 election?

Because a financial transactions tax directly threatens a major source of Wall Street’s revenue. And, if you hadn’t noticed, the Street uses a portion of its vast revenues to gain political clout.

So even though it’s an excellent idea championed by a major candidate, a financial transactions tax isn’t being discussed this election year because Wall Street won’t abide it.

Which maybe one of the best reasons for enacting it.

Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. His latest book is "Saving Capitalism: For the Many, Not the Few." His website is www.robertreich.org.

Panama Papers: Mossack Fonseca leak reveals elite's tax havens

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Tue, 05 Apr 2016 01:58:00 +0000

Panama Papers: Mossack Fonseca leak reveals elite's tax havens

By Richard BiltonBBC Panorama

A huge leak of confidential documents has revealed how the rich and powerful use tax havens to hide their wealth.

Eleven million documents were leaked from one of the world's most secretive companies, Panamanian law firm Mossack Fonseca.

They show how Mossack Fonseca has helped clients launder money, dodge sanctions and avoid tax.

The company says it has operated beyond reproach for 40 years and has never been charged with criminal wrong-doing.

Q&A: All you need to know about the leaked documents

Panama Papers reaction - latest

French President Francois Hollande hailed the "good revelations" which would "increase tax revenues from those who commit fraud".

The documents show 12 current or former heads of state and at least 60 people linked to current or former world leaders in the data.

They include the Icelandic Prime Minister, Sigmundur David Gunnlaugson, who had an undeclared interest linked to his wife's wealth. He has said he will not resign.

The files also reveal a suspected billion-dollar money laundering ring involving close associates of Russian President Vladimir Putin.

Gerard Ryle, director of the International Consortium of Investigative Journalists (ICIJ), said the documents covered day-to-day business at Mossack Fonseca over the past 40 years.

"I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents," he added.

Panama Papers - tax havens of the rich and powerful exposed

Eleven million documents held by the Panama-based law firm Mossack Fonseca have been passed to German newspaper Sueddeutsche Zeitung, which then shared them with the International Consortium of Investigative Journalists. BBC Panorama is among 107 media organisations - including UK newspaper the Guardian - in 76 countries which have been analysing the documents. The BBC doesn't know the identity of the source
They show how the company has helped clients launder money, dodge sanctions and evade tax
Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing
Tricks of the trade: How assets are hidden and taxes evaded
Panama Papers: Full coverage; follow reaction on Twitter using #PanamaPapers; in the BBC News app, follow the tag "Panama Papers"
Watch Panoramaon the BBC iPlayer (UK viewers only)

The documents also shed light on how Mossack Fonseca offered financial services designed to help business clients hide their wealth.

One wealthy client, US millionaire and life coach Marianna Olszewski, was offered fake ownership records to hide money from the authorities. This is in direct breach of international regulations designed to stop money-laundering and tax evasion.

An email from a Mossack executive to Ms Olszewski in January 2009 explains how she could deceive the bank: "We may use a natural person who will act as the beneficial owner… and therefore his name will be disclosed to the bank. Since this is a very sensitive matter, fees are quite high."

Ms Olszewski did not respond to the BBC's questions.

In a statement, Mossack Fonseca said: "Your allegations that we provide structures supposedly designed to hide the identity of the real owners, are completely unsupported and false.

"We do not provide beneficiary services to deceive banks. It is difficult, not to say impossible, not to provide banks with the identity of final beneficiaries and the origin of funds."

The data also contain secret offshore companies linked to the families and associates of Egypt's former President, Hosni Mubarak, former Libyan leader Muammar Gaddafi and Syria's President Bashar al-Assad.

Russian connection

Also revealed is a suspected billion-dollar money-laundering ring that was run by a Russian bank and involved close associates of President Putin.

The operation was run by Bank Rossiya, which is subject to US and EU sanctionsfollowing Russia's annexation of Crimea.

The documents reveal for the first time how the bank operates.

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Media captionA huge leak of confidential documents has revealed how the rich and powerful use tax havens to hide their wealth.

Money has been channelled through offshore companies, two of which were officially owned by one of the Russian president's closest friends.

Concert cellist Sergei Roldugin has known Vladimir Putin since they were teenagers and is godfather to the president's daughter Maria.

On paper, Mr Roldugin has personally made hundreds of millions of dollars in profits from suspicious deals.

But documents from Mr Roldugin's companies state that: "The company is a corporate screen established principally to protect the identity and confidentiality of the ultimate beneficial owner of the company."

The Kremlin spokesman said it was clear the main target of the reports was Mr Putin, as well as Russia's political stability ahead of parliamentary elections.

Dmitry Peskov dismissed the investigation as insinuation and speculation, and suggested many of the team of journalists behind it were actually former US state department and CIA officials.

Read more: Putin associates linked to 'money laundering'

Iceland connection

Mossack Fonseca data also show how Icelandic Prime Minister Sigmundur David Gunnlaugsson had an undeclared interest in his country's failed banks.

Leaked documents show that Mr Gunnlaugsson and his wife bought offshore company Wintris in 2007.

He did not declare an interest in the company when entering parliament in 2009. He sold his 50% of Wintris to his wife for $1 (70p), eight months later.

The offshore company was used to invest millions of dollars of inherited money, according to a document signed by Mr Gunnlaugsson's wife, Anna Sigurlaug Palsdottir, in 2015.

Mr Gunnlaugsson is facing calls for his resignation, but said on Monday that this was not something he was considering.

Image copyrightIceland Monitor/Eva Björk

Image captionSigmundur David Gunnlaugsson and his wife Anna Sigurlaug Palsdottir

He apologised for his poor performance in an earlier interview, when he walked out after a question about Wintris.

The prime minister stressed that his wife had always paid taxes in Iceland.

He says he has not broken any rules and his wife did not benefit financially from his decisions.

Read more: Iceland PM's investments questioned

Mossack Fonseca says offshore companies are available worldwide and are used for a variety of legitimate purposes.

"If we detect suspicious activity or misconduct, we are quick to report it to the authorities," it said. "Similarly, when authorities approach us with evidence of possible misconduct, we always co-operate fully with them."

Jennie Granger, a spokeswoman for the UK's tax authority, HM Revenue and Customs (HMRC), said the organisation had received "a great deal of information on offshore companies, including in Panama, from a wide range of sources, which is currently the subject of intensive investigation".

She said the ICIJ had been asked to share all its data with HMRC.

As riches grow, empathy for others seems to decline

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Wed, 23 Mar 2016 02:46:00 +0000

Scientific American

As riches grow, empathy for others seems to decline

By Daisy Grewal on April 10, 2012

iStock / pagadesign

Who is more likely to lie, cheat, and steal—the poor person or the rich one? It’s temping to think that the wealthier you are, the more likely you are to act fairly. After all, if you already have enough for yourself, it’s easier to think about what others may need. But research suggests the opposite is true: as people climb the social ladder, their compassionate feelings towards other people decline.

.Berkeley psychologists Paul Piff and Dacher Keltner ran several studies looking at whether social class (as measured by wealth, occupational prestige, and education) influences how much we care about the feelings of others. In one study, Piff and his colleagues discreetly observed the behavior of drivers at a busy four-way intersection. They found that luxury car drivers were more likely to cut off other motorists instead of waiting for their turn at the intersection. This was true for both men and women upper-class drivers, regardless of the time of day or the amount of traffic at the intersection. In a different study they found that luxury car drivers were also more likely to speed past a pedestrian trying to use a crosswalk, even after making eye contact with the pedestrian.

In order to figure out whether selfishness leads to wealth (rather than vice versa), Piff and his colleagues ran a study where they manipulated people’s class feelings. The researchers asked participants to spend a few minutes comparing themselves either to people better off or worse off than themselves financially. Afterwards, participants were shown a jar of candy and told that they could take home as much as they wanted. They were also told that the leftover candy would be given to children in a nearby laboratory. Those participants who had spent time thinking about how much better off they were compared to others ended up taking significantly more candy for themselves--leaving less behind for the children.

A related set of studies published by Keltner and his colleagues last year looked at how social class influences feelings of compassion towards people who are suffering. In one study, they found that less affluent individuals are more likely to report feeling compassion towards others on a regular basis. For example, they are more likely to agree with statements such as, “I often notice people who need help,” and “It’s important to take care of people who are vulnerable.” This was true even after controlling for other factors that we know affect compassionate feelings, such as gender, ethnicity, and spiritual beliefs.

In a second study, participants were asked to watch two videos while having their heart rate monitored. One video showed somebody explaining how to build a patio. The other showed children who were suffering from cancer. After watching the videos, participants indicated how much compassion they felt while watching either video. Social class was measured by asking participants questions about their family’s level of income and education. The results of the study showed that participants on the lower end of the spectrum, with less income and education, were more likely to report feeling compassion while watching the video of the cancer patients. In addition, their heart rates slowed down while watching the cancer video—a response that is associated with paying greater attention to the feelings and motivations of others.

These findings build upon previous research showing how upper class individuals are worse at recognizing the emotions of others and less likely to pay attention to people they are interacting with (e.g. by checking their cell phones or doodling).

But why would wealth and status decrease our feelings of compassion for others? After all, it seems more likely that having few resources would lead to selfishness. Piff and his colleagues suspect that the answer may have something to do with how wealth and abundance give us a sense of freedom and independence from others. The less we have to rely on others, the less we may care about their feelings. This leads us towards being more self-focused. Another reason has to do with our attitudes towards greed. Like Gordon Gekko, upper-class people may be more likely to endorse the idea that “greed is good.” Piff and his colleagues found that wealthier people are more likely to agree with statements that greed is justified, beneficial, and morally defensible. These attitudes ended up predicting participants’ likelihood of engaging in unethical behavior.

Given the growing income inequality in the United States, the relationship between wealth and compassion has important implications. Those who hold most of the power in this country, political and otherwise, tend to come from privileged backgrounds. If social class influences how much we care about others, then the most powerful among us may be the least likely to make decisions that help the needy and the poor. They may also be the most likely to engage in unethical behavior. Keltner and Piff recently speculated in the New York Times about how their research helps explain why Goldman Sachs and other high-powered financial corporations are breeding grounds for greedy behavior. Although greed is a universal human emotion, it may have the strongest pull over those of who already have the most.

Taxation Without Appropriate Representation: America is an Oligarchy

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Mon, 07 Mar 2016 03:15:00 +0000

Published on

Monday, April 06, 2015

Common Dreams

How America Became an Oligarchy

Ellen Brown

'Control of the media and financial leverage over elected officials then enabled those other curbs on democracy we know today, including high barriers to ballot placement for third parties and their elimination from presidential debates, vote suppression, registration restrictions, identification laws, voter roll purges, gerrymandering, computer voting, and secrecy in government.' (Image: Public domain)

"The politicians are put there to give you the idea that you have freedom of choice. You don’t. . . . You have owners." —George Carlin, The American Dream

According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America’s political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites.

“Making the world safe for democracy” was President Woodrow Wilson’s rationale for World War I, and it has been used to justify American military intervention ever since. Can we justify sending troops into other countries to spread a political system we cannot maintain at home?

The Magna Carta, considered the first Bill of Rights in the Western world, established the rights of nobles as against the king. But the doctrine that “all men are created equal” – that all people have “certain inalienable rights,” including “life, liberty and the pursuit of happiness” – is an American original. And those rights, supposedly insured by the Bill of Rights, have the right to vote at their core. We have the right to vote but the voters’ collective will no longer prevails.

In Greece, the left-wing populist Syriza Party came out of nowhere to take the presidential election by storm; and in Spain, the populist Podemos Party appears poised to do the same. But for over a century, no third-party candidate has had any chance of winning a US presidential election. We have a two-party winner-take-all system, in which our choice is between two candidates, both of whom necessarily cater to big money. It takes big money just to put on the mass media campaigns required to win an election involving 240 million people of voting age.

In state and local elections, third party candidates have sometimes won. In a modest-sized city, candidates can actually influence the vote by going door to door, passing out flyers and bumper stickers, giving local presentations, and getting on local radio and TV. But in a national election, those efforts are easily trumped by the mass media. And local governments too are beholden to big money.

When governments of any size need to borrow money, the megabanks in a position to supply it can generally dictate the terms. Even in Greece, where the populist Syriza Party managed to prevail in January, the anti-austerity platform of the new government is being throttled by the moneylenders who have the government in a chokehold.

How did we lose our democracy? Were the Founding Fathers remiss in leaving something out of the Constitution? Or have we simply gotten too big to be governed by majority vote?

Democracy’s Rise and Fall

The stages of the capture of democracy by big money are traced in a paper called “The Collapse of Democratic Nation States” by theologian and environmentalist Dr. John Cobb. Going back several centuries, he points to the rise of private banking, which usurped the power to create money from governments:

The influence of money was greatly enhanced by the emergence of private banking. The banks are able to create money and so to lend amounts far in excess of their actual wealth. This control of money-creation . . . has given banks overwhelming control over human affairs. In the United States, Wall Street makes most of the truly important decisions that are directly attributed to Washington.

Today the vast majority of the money supply in Western countries is created by private bankers. That tradition goes back to the 17th century, when the privately-owned Bank of England, the mother of all central banks, negotiated the right to print England’s money after Parliament stripped that power from the Crown. When King William needed money to fight a war, he had to borrow. The government as borrower then became servant of the lender.

In America, however, the colonists defied the Bank of England and issued their own paper scrip; and they thrived. When King George forbade that practice, the colonists rebelled.

They won the Revolution but lost the power to create their own money supply, when they opted for gold rather than paper money as their official means of exchange. Gold was in limited supply and was controlled by the bankers, who surreptitiously expanded the money supply by issuing multiple banknotes against a limited supply of gold.

This was the system euphemistically called “fractional reserve” banking, meaning only a fraction of the gold necessary to back the banks’ privately-issued notes was actually held in their vaults. These notes were lent at interest, putting citizens and the government in debt to bankers who created the notes with a printing press. It was something the government could have done itself debt-free, and the American colonies had done with great success until England went to war to stop them.

President Abraham Lincoln revived the colonists’ paper money system when he issued the Treasury notes called “Greenbacks” that helped the Union win the Civil War. But Lincoln was assassinated, and the Greenback issues were discontinued.

In every presidential election between 1872 and 1896, there was a third national party running on a platform of financial reform. Typically organized under the auspices of labor or farmer organizations, these were parties of the people rather than the banks. They included the Populist Party, the Greenback and Greenback Labor Parties, the Labor Reform Party, the Antimonopolist Party, and the Union Labor Party. They advocated expanding the national currency to meet the needs of trade, reform of the banking system, and democratic control of the financial system.

The Populist movement of the 1890s represented the last serious challenge to the bankers’ monopoly over the right to create the nation’s money. According to monetary historian Murray Rothbard, politics after the turn of the century became a struggle between two competing banking giants, the Morgans and the Rockefellers. The parties sometimes changed hands, but the puppeteers pulling the strings were always one of these two big-money players.

In All the Presidents’ Bankers, Nomi Prins names six banking giants and associated banking families that have dominated politics for over a century. No popular third party candidates have a real chance of prevailing, because they have to compete with two entrenched parties funded by these massively powerful Wall Street banks.

Democracy Succumbs to Globalization

In an earlier era, notes Dr. Cobb, wealthy landowners were able to control democracies by restricting government participation to the propertied class. When those restrictions were removed, big money controlled elections by other means:

First, running for office became expensive, so that those who seek office require wealthy sponsors to whom they are then beholden. Second, the great majority of voters have little independent knowledge of those for whom they vote or of the issues to be dealt with. Their judgments are, accordingly, dependent on what they learn from the mass media. These media, in turn, are controlled by moneyed interests.

Control of the media and financial leverage over elected officials then enabled those other curbs on democracy we know today, including high barriers to ballot placement for third parties and their elimination from presidential debates, vote suppression, registration restrictions, identification laws, voter roll purges, gerrymandering, computer voting, and secrecy in government.

The final blow to democracy, says Dr. Cobb, was “globalization” – an expanding global market that overrides national interests:

[T]oday’s global economy is fully transnational. The money power is not much interested in boundaries between states and generally works to reduce their influence on markets and investments. . . . Thus transnational corporations inherently work to undermine nation states, whether they are democratic or not.

The most glaring example today is the secret twelve-country trade agreement called theTrans-Pacific Partnership. If it goes through, the TPP will dramatically expand the power of multinational corporations to use closed-door tribunals to challenge and supersede domestic laws, including environmental, labor, health and other protections.

Looking at Alternatives

Some critics ask whether our system of making decisions by a mass popular vote easily manipulated by the paid-for media is the most effective way of governing on behalf of the people. In an interesting Ted Talk, political scientist Eric Li makes a compelling case for the system of “meritocracy” that has been quite successful in China.

In America Beyond Capitalism, Prof. Gar Alperovitz argues that the US is simply too big to operate as a democracy at the national level. Excluding Canada and Australia, which have large empty landmasses, the United States is larger geographically than all the other advanced industrial countries of the OECD (Organization for Economic Cooperation and Development) combined. He proposes what he calls “The Pluralist Commonwealth”: a system anchored in the reconstruction of communities and the democratization of wealth. It involves plural forms of cooperative and common ownership beginning with decentralization and moving to higher levels of regional and national coordination when necessary. He is co-chair along with James Gustav Speth of an initiative called The Next System Project, which seeks to help open a far-ranging discussion of how to move beyond the failing traditional political-economic systems of both left and Right..

Dr. Alperovitz quotes Prof. Donald Livingston, who asked in 2002:

What value is there in continuing to prop up a union of this monstrous size? . . . [T]here are ample resources in the American federal tradition to justify states’ and local communities’ recalling, out of their own sovereignty, powers they have allowed the central government to usurp.

Taking Back Our Power

If governments are recalling their sovereign powers, they might start with the power to create money, which was usurped by private interests while the people were asleep at the wheel. State and local governments are not allowed to print their own currencies; but they can own banks, and all depository banks create money when they make loans, as the Bank of England recently acknowledged.

The federal government could take back the power to create the national money supply by issuing its own Treasury notes as Abraham Lincoln did. Alternatively, it could issue some very large denomination coins as authorized in the Constitution; or it could nationalize the central bank and use quantitative easing to fund infrastructure, education, job creation, and social services, responding to the needs of the people rather than the banks.

The freedom to vote carries little weight without economic freedom – the freedom to work and to have food, shelter, education, medical care and a decent retirement. President Franklin Roosevelt maintained that we need an Economic Bill of Rights. If our elected representatives were not beholden to the moneylenders, they might be able both to pass such a bill and to come up with the money to fund it.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

Ellen Brown is an attorney and founder of the Public Banking Institute. She is the author of twelve books, including the best-selling Web of Debt, and her latest book, The Public Bank Solution, which explores successful public banking models historically and globally.

Amazon: Too Big a Predator

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Mon, 22 Feb 2016 14:23:00 +0000

NEW REPUBLIC

Amazon Must Be Stopped

It's too big. It's cannibalizing the economy. It's time for a radical plan.

BY FRANKLIN FOER

October 9, 2014

Before we speak ill of Amazon, let us kneel down before it. Twenty years ago, the company began with the stated goal of creating a bookstore as comprehensive as the great Library of Alexandria, and then quickly managed to make even that grandiloquent ambition look puny. Amazon could soon conjure the full text of almost any volume onto a phone in less time than a yawn. Its warehouses are filled with an unabridged catalogue of items that comes damn close to serving every human need, both basic and esoteric—a mere click away, speedily delivered, and as cheap as capitalism permits.

Rather than pocketing the profits from this creation, Amazon has plowed revenue into bettering itself—into the construction of well-placed fulfillment centers that further hasten the arrival of its packages, into technologies that attempt to read our acquisitive minds and aptly suggest our next purchase. Shopping on Amazon has so ingrained itself in modern American life that it has become something close to our unthinking habit, and the company has achieved a level of dominance that merits the application of a very old label: monopoly.

That term doesn’t get tossed around much these days, but it should. Amazon is theshining representative of a new golden age of monopoly that also includes Google and Walmart. Unlike U.S. Steel, the new behemoths don’t use their barely challenged power to hike up prices. They are, in fact, self-styled servants of the consumer and have ushered in an era of low prices for everything from flat-screen TVs to paper napkins to smart phones.

In other words, we’re all enjoying the benefits of these corporations far too much to think hard about distant dangers. Besides, the ideology of Silicon Valley suggests that we have nothing much to fear: If these firms no longer engineer breathtaking technologies, they will be creatively destroyed. That’s why Peter Thiel, the creator of PayPal, has argued that the term “monopoly” should be stripped of its negative connotation. A monopoly, he argues, is really nothing more than a synonym for a highly successful company. Insulation from the brutish spirit of competition even makes them superior organizations—more beneficent employers, better able to both daydream and think clearly. In Thiel’s phrasing: “Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better.”

Thiel makes an important point: The Internet-age monopolies are a different species; they flummox our conventional ways of thinking about corporate concentration and have proved especially elusive to those who ponder questions of antitrust, the discipline of law that aims to curb threats to the competitive marketplace. Part of the issue is the laws themselves, which were conceived to manage an industrial economy—and have, over time, evolved to focus on a specific set of narrow questions that have little to do with the core problem at hand.

Whether Amazon, which does $75 billion in annual revenue, has technically violated antitrust laws is an important matter, of course. But descending into the weeds of predatory pricing statutes also obscures the very real threat. In its pursuit of bigness, Amazon has left a trail of destruction—competitors undercut, suppliers squeezed—some of it necessary, and some of it highly worrisome. And in its confrontation with the publisher Hachette, it has entered a phase of heightened aggression unseen even when it tried to crush Zappos by offering a $5 rebate on all its shoes or when it gave employees phony business cards to avoid paying sales taxes in various states.

In effect, we’ve been thrust back 100 years to a time when the law was not up to the task of protecting the threats to democracy posed by monopoly; a time when the new nature of the corporation demanded a significant revision of government.

The progressive era’s most venomous screeds against monopoly came from the pen of one of its stodgiest characters, Louis Brandeis. In the early 1900s, before he became a Supreme Court justice, he took on a series of clients whose cases exposed him to the Gilded Age’s worst excesses. It radicalized his thinking. “If the Lord had intended things to be big, he would have made man bigger— in brains and character,” he wrote his daughter. He believed that the new corporations had only managed to thrive by dint of their dirty tactics: secret contracts, price fixing, and the purchase of potential competitors. On a level playing field, he lectured a Senate Committee in 1911, “these monsters would fall to the ground.”

Brandeis often wrote on behalf of exploited American consumers, but they were hardly his primary objects of concern. In the great Jeffersonian tradition, his heart truly bled for the small producers and sellers squashed by the monopolists. To protect these businessmen, Brandeis launched a crusade for “fair trade,” which revolved around a doctrine called Resale Price Maintenance. The idea was that manufacturers should legally control the retail value of their wares, rather than hand the power of pricing over to large chains and department stores, whose size gave them the unstoppable advantage of offering deep discounts. If this campaign forced consumers to pay slightly higher prices, Brandeis didn’t mind one bit. In an essay he wrote for Harper’s Weekly in 1913, he excoriated the consumer who cared only about short-term prices: “Thoughtless or weak, he yields to the temptation of trifling immediate gain, and, selling his birthright for a mess of pottage, becomes himself an instrument of monopoly.” And in the generation that followed Brandeis, Midwestern liberals, Southern populists, and assorted other politicians continued to inveigh against the debasement of small businessmen.

By the postwar period, however, the producer was edged out of liberal thinking and replaced by a figure better suited to the affluence of the times. In the 1960s, Ralph Nader portrayed the consumer as the true victim of corporate greed. (Michael Sandel elegantly narrates this transformation of liberal thought in his book, Democracy’s Discontent.) To the Naderites, antitrust laws remained as necessary as ever, but only for the sake of driving down the very prices that Brandeis had once hoped to maintain. Mark Green, a leading disciple of Nader’s, wrote that the “primary focus of antitrust enforcement” should be “efficient production and distribution—not the local farmer, local druggist, or local grocer.”

Conservatives, it turned out, were only too happy to hear such talk. After years of defending monopoly as perfectly justifiable, they began publishing books and articles conceding that consumer welfare was a legitimate purpose of antitrust, perhaps the only one. Robert Bork denounced all of Brandeis’s attempts to protect small producers as a “jumble of half-digested notions and mythologies.” A cottage industry of like-minded critiques emanated from the University of Chicago’s Law School and then traveled straight to Republicans in Washington. In the hands of Ronald Reagan’s Justice Department, not to mention the judges he appointed to the federal bench, efficiency and low prices provided the justification for dismantling much of the old antitrust infrastructure. No subsequent administration, either Democratic or Republican, has meaningfully tried to revive it.

And Amazon is the price we’re paying for that bipartisan turn in thinking. As he built the company, Jeff Bezos carefully studied the example of Walmart, America’s largest retailer. He borrowed his personal style from the parsimonious Sam Walton and also poached from his C-suite. Walmart’s executives aren’t extravagantly compensated; neither are Amazon’s. For a time, they didn’t even receive reimbursements for office parking. Meanwhile, both companies have studiously avoided unionization and treat their workers miserably. In one famous incident, Amazon hired paramedics to revive heat-sick employees at a Pennsylvania warehouse rather than buy an air-conditioning unit.

Still, the biggest lesson that Bezos drew from the Waltons was in how to handle suppliers. Both Amazon and Walmart promise its customers the same feat—undercutting their competition on price. But frugality and innovation can only go so far in keeping prices headed southward, especially in the face of the stock market’s impatience. Growing profit margins depend, therefore, on continually getting a better deal from suppliers. At Walmart, this tactic is enshrined in policy. The company has insisted that suppliers of basic consumer goods annually reduce their prices by about 5 percent, according to Charles Fishman’s book, The Walmart Effect.

It’s hard to overstate how badly these price demands injure the possibility for robust competition. But when Amazon engages in the same behavior, it acquires a darker tint. Where Walmart is essentially a large-scale, cut-rate version of the old department store and grocer, Amazon doesn’t confine its ambitions to any existing template. Without the constraints of brick and mortar, it considers nothing too remote from its core business, so it has grown to sell server space to the CIA, produce original televisions shows about bumbling congressmen, and engineer its own line of mobile phones.

And as it amasses economic power, it also acquires greater influence in the cultural and intellectual life of the nation. Consider Amazon’s relationship to the publishing industry. A recent survey conducted by the Codex Group, released in March, found that Amazon commands a 67 percent share of the e-books market (not at all surprising given that it invented a wildly popular device for consuming digital tomes). And when it comes to the sale of all new books—hard, soft, and electronic—Amazon accounts for 41 percent.

Even though the five major publishing houses have political connections and economic power of their own, they just can’t compete. When Amazon first set the price for e-books at $9.99, it did so unilaterally and didn’t inform publishers in advance of its live-streamed announcement. The company continually finds new schemes for exacting tribute from the houses. Amazon requires a contribution to a “marketing development fund”—which hits publishers for an additional 5 to 7 percent of their gross sales. All the wondrous tools on the Amazon site are open to publishers, but only if they write appropriately sized checks: Pre-order buttons, appearance in search results, and personalized recommendations are hardly enlightened services provided by your friendly bookseller. Sure, Barnes and Noble and other chains have long charged fees for shelf placement, but Amazon has invented a steroidal version of that old practice. There seems to be no limit to Amazon’s demands—and its current negotiations with Hachette prove the point. The New York Times has reported that Amazon apparently wants to increase its cut of each e-book it sells, from 30 percent to 50.1

To justify this approach with publishers, Amazon portrays them as deserving of rough treatment. One ex-Amazon employee told The New Yorker’s George Packer that the company views publishers as “antediluvian losers with rotary phones and inventory systems designed in 1968 and a warehouse full of crap.” In the mid-2000s, the company famously launched an initiative called the Gazelle Project to extract better terms from small publishers. Its moniker was derived from a Bezos suggestion that his team pursue its prey as a cheetah tracks a “sickly gazelle.” (Lawyers a bit more sensitive to antitrust laws renamed it the “Small Publisher Negotiation Program.”) Or as one executive charged with dealing with the book industry confessed to the reporter Brad Stone, “I did everything I could to screw with their performance.”

In their desperation, publishers have tried various gambits to alter this dynamic. They have attempted to fight size with size—a misbegotten notion that led them to collude with Apple in blatant violation of price-fixing laws. And in the same spirit, they have accelerated the old tendency to seek safety in mergers. Just last year, Random House joined Penguin to form a mega-house, which controls 25 percent of the book business, in the dim hope that this new brawn would insulate them from Amazon’s harshest demands. But even a giant corporation ultimately has to bend to the will of their big buyer. That’s been the iron law of Walmart, which imposes its terms on the largest corporations in the world. As the New America Foundation’s Barry Lynn has described, “Walmart ... has told Coca-Cola what artificial sweetener to use in a diet soda, it has told Disney what scenes to cut from a DVD, it has told Levi’s what grade of cotton to use in its jeans, and it has told lawn mower makers what grade of steel to buy.”

So, no matter how large they grow, publishers will continue to strip away costs to satisfy Amazon. And more attention will fall on a strange inefficiency at the heart of the business: the advances that publishing houses pay their writers. This upfront money is the economic pillar on which quality books rest, the great bulwark against dilettantism. Advances make it financially viable for a writer to commit years of work to a project.

But no bank or investor in its right mind would extend that kind of credit to an author, save perhaps Stephen King. Which means that it won’t take much for this anomalous ecosystem to collapse. Amazon might decide that it can only generate enough revenue by further transforming the e-book market—and it might try to drive sales by deflating Salman Rushdie and Jennifer Egan novels to the price of a Diet Coke. Or it can continue to prod the publishing houses to change their models, until they submit. Either way, the culture will suffer the inevitable consequences of monopoly—less variety of products and lower quality of the remaining ones. This is depressing enough to ponder when it comes to the fate of lawn mower blades.

In confronting what to do about Amazon, first we have to realize our own complicity. We’ve all been seduced by the deep discounts, the monthly automatic diaper delivery, the free Prime movies, the gift wrapping, the free two-day shipping, the ability to buy shoes or books or pinto beans or a toilet all from the same place. But it has gone beyond seduction, really. We expect these kinds of conveniences now, as if they were birthrights. They’ve become baked into our ideas about how consumers should be treated.

These expectations help fuel our collective denial about Amazon. We seem to believe that the Web is far too fluid to fall capture to monopoly. If a site starts to develop the lameness of an AltaVista or Myspace, consumers will unhesitatingly abandon it. But while that meritocratic theory might be true enough for a search engine or social media site, Amazon is different. It has a record of shredding young businesses, like Zappos and Diapers.com, just as they begin to pose a competitive challenge. It uses its riches to undercut opponents on price—Amazon was prepared to lose $100 million in three months in its quest to harm Diapers.com—then once it has exhausted the resources of its foes, it buys them and walks away even stronger.

This big-footing necessitates a government response. It is often said that the state is too lead-footed to keep pace with tech companies; that by the time it decides to take action against a firm, the digital economy will have galloped off into the distance. But there’s a long history that suggests the opposite.

It starts with AT&T’s Bell Labs in the late ’40s. Even though scientists there developed a slew of great inventions—automatic dialing, new switchboards—executives atop the monopoly essentially shoved the new gizmos into a filing cabinet, where they languished. (Unchallenged monopolists have little incentive to disrupt industries they already control.) Under pressure from the government, AT&T began licensing its technology to other firms, including a device called the electronic transistor—which, in the hands of Texas Instruments, became the basis for the computer.

Or take IBM, a company that constantly flirted with breaking the law. The Justice Department hounded Big Blue in the ’50s and ’60s. And though IBM complained about the intrusions, it would always settle with the government and promise to reform its ways. In truth, it should have thanked the trustbusters. With the government at its elbow, IBM turned away from the business of tabulating machines to enter computing, a field it would revolutionize. Then there’s IBM’s successor, Microsoft. The company was known for using its dominance to squash small rivals who made superior products. But the government’s prosecution caused it to back away from that tactic, which, in turn, allowed nascent companies like Google and Skype to grow. “Antitrust gets some credit for restoring uncontested American technological preeminence,” says Tim Wu, author of The Master Switch. “It made sure the web would stay open.”

These stories sound impressive now, but it took decades of experimentation, mostly unsuccessful, before a serviceable approach for curbing monopolies finally emerged. In the earliest days of the Progressive Era, the country was quick to discover the danger of huge corporations and acted with alacrity to legislate it into oblivion, passing the Sherman Antitrust Act in 1890. But wishing the problem away is very different from solving it. Progressives never could agree on how to think about monopolies—would they permit them to exist, carefully regulated by the state, or smash them into bits? The creation of the Federal Trade Commission in 1914 was meant to be the culmination of that long struggle, yet it came to embody all the conceptual fuzziness of the debate. Even Brandeis considered it a “stupid administration.”

It took a Great Depression to provide the clarity that progressives never did manage. When all of Roosevelt’s efforts to revive the economy sputtered, he waged all-out war on monopoly. In 1940 alone, his Justice Department brought 92 new cases and filed 3,412 complaints; it went after big-time players like Alcoa, General Motors, and the American Medical Association. Monopoly no longer stirred emotions, as it had in Brandeis’s time, but Roosevelt’s triumphs set precedents that ensured future victories. He implanted antitrust more securely in government, a technocratic tool for managing the health of the economy.

Perhaps the debate over Amazon won’t take as many fits and starts. There are already a few ideas percolating—one would strip Amazon of the power to set prices; another would deprive it of the ability to use its site to punish recalcitrant suppliers. Those ideas feel like tentative jabs at the problem, rather than coherent solutions to it. Still, if we don’t engage the new reality of monopoly with the spirit of argumentation and experimentation that carried Brandeis, we’ll drift toward an unsustainable future, where one company holds intolerable economic and cultural sway. Unfortunately, a robust regulatory state is one item that can’t be delivered overnight.

Amazon has subsequently attempted to claw back ground in public opinion by casually injecting an altogether different proposal: “We believe 35% should go to the author, 35% to the publisher and 30% to Amazon."

Unlikely Critic Says Banks Still Too Big To Fail, Pose 'Nuclear' Risk to US Economy

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Wed, 17 Feb 2016 15:54:00 +0000

Published on

Tuesday, February 16, 2016

Common Dreams

Unlikely Critic Says Banks Still Too Big To Fail, Pose 'Nuclear' Risk to US Economy

Federal Reserve official Neel Kashkari warns "we won't see the next crisis coming, and it won’t look like what we might be expecting."

Deirdre Fulton, staff writer

"The financial sector has lobbied hard to preserve its current structure and thrown up endless objections to fundamental change," said Neel Kashkari, who is a former executive at Goldman Sachs, in a speech Tuesday. (Photo: ProPublica/flickr/cc)

A former Goldman Sachs executive—one credited as an architect of the 2008 banking bailout—said Tuesday that the country's largest financial institutions are "still too big to fail and continue to pose a significant, ongoing risk to our economy."

In his first speech delivered as the newly appointed president of the Minneapolis Federal Reserve, Neel Kashkari "came out swinging," Business Insider reported.

He likened the risk posed by big banks to that of a nuclear reactor, noting: "The cost to society of letting a reactor melt down is astronomical."

"Enough time has passed that we better understand the causes of the crisis, and yet it is still fresh in our memories," Kashkari said at the Brookings Institution think tank in Washington, D.C. "Now is the right time for Congress to consider going further than Dodd-Frank with bold, transformational solutions to solve this problem once and for all."

To that end, Kashkari continued, "the Federal Reserve Bank of Minneapolis is launching a major initiative to develop an actionable plan to end [too-big-to-fail, or TBTF], and we will deliver our plan to the public by the end of the year. Ultimately Congress must decide whether such a transformational restructuring of our financial system is justified in order to mitigate the ongoing risks posed by large banks."

Among the solutions he floated: "breaking up large banks into smaller, less connected, less important entities" and "turning large banks into public utilities by forcing them to hold so much capital that they virtually can't fail (with regulation akin to that of a nuclear power plant)."

While Kashkari acknowledged that the 2010 Dodd-Frank financial reform law has made "significant progress" in strengthening the financial system, he said it "did not go far enough" and warned that "we won’t see the next crisis coming, and it won’t look like what we might be expecting."

Kashkari, who was the 2014 Republican nominee for California governor, also expressed skepticism about whether regulatory tools created in the wake of the bailout "will be useful to policymakers in the...scenario of a stressed economic environment." He said:

Given the massive externalities on Main Street of large bank failures in terms of lost jobs, lost income and lost wealth, no rational policymaker would risk restructuring large firms and forcing losses on creditors and counterparties using the new tools in a risky environment, let alone in a crisis environment like we experienced in 2008. They will be forced to bail out failing institutions—as we were. We were even forced to support large bank mergers, which helped stabilize the immediate crisis, but that we knew would make TBTF worse in the long term. The risks to the U.S. economy and the American people were simply too great not to do whatever we could to prevent a financial collapse.

As the Guardian notes, Kashkari's comments "come as presidential candidates battle over whom has the best solution to prevent another banking crisis, and prevent a repeat of the economic collapse."

"There are lines in your speech that I can imagine Bernie Sanders or Elizabeth Warren saying," David Wessel, director of Brookings' Hutchins Center on Fiscal and Monetary Policy, told Kashkari during a panel discussion after the speech.

"If I'm not willing to stand up and share my concerns, then I wouldn’t be doing my job," Kashkari responded.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

For Clinton and Krugman, 'Hardheaded Realism' Amounts to Protecting the Interests of the Richest People in America

noreply@blogger.com (NOTES FROM THE WILDSIDE) — Sun, 31 Jan 2016 02:40:00 +0000

Election 2016

For Clinton and Krugman, 'Hardheaded Realism' Amounts to Protecting the Interests of the Richest People in America

The demeaning attacks on Bernie Sanders speak volumes about Hillary Clinton's worldview.

By Les Leopold / AlterNet

January 27, 2016

Photo Credit: Collage by Adam Johnson

Here are three telling quotes about this year's election:

"In theory, there are a lot of things to like about [Sanders'] ideas. But in theory isn't enough. A president has to deal in reality. I am not interested in ideas that sound good on paper but will never make it in real life." —Hillary Clinton, Jan. 21, 2016

"The point is that while idealism is fine and essential -- you have to dream of a better world -- it's not a virtue unless it goes along with hardheaded realism about the means that might achieve your ends. ... Sorry, but there's nothing noble about seeing your values defeated because you preferred happy dreams to hard thinking about means and ends. Don't let idealism veer into destructive self-indulgence. —Paul Krugman, NYT, Jan. 22, 2016

"In the United States, our findings indicate, the majority does not rule—at least not in the causal sense of actually determining policy outcomes..... [We] believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America's claims to being a democratic society are seriously threatened." —Gilens and Page

Team Hillary (which includes economist/columnist Paul Krugman) is worried about major defeats in Iowa and New Hampshire. Their counter-attack is clear—Bernie is all pie in the sky, he isn't facing up to the realities of Washington. And as Krugman puts it, Sanders and his supporters are letting "idealism veer into destructive self-indulgence."

But these demeaning attacks say much more about Clinton than they do about Sanders. In effect Clinton is admitting (as is Krugman) that we have to accept American plutocracy as a given that, at best, can be modified around the edges. Neither Clinton nor Krugman believe a progressive populist uprising (that Sanders is calling for and counting on) could possibly modify our elite-driven system. After all, if such a movement is possible, Hillary is likely to lose. Therefore it must be declared impossible, off the table, unrealistic and so on.

Clearly Clinton and Krugman accept that elite rule not only shapes our current sense of reality, it is our permanent reality.

Krugman should know that what remains of our democracy needs to be pressured from below. His Princeton colleague, Martin Gilens, along with Benjamin Page of Northwestern University, have co-authored a study that shows that the average American currently has no independent impact on public policy. They reviewed 1,779 congressional bills over the last decade and found that, "When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy."

Therefore, unless you already are an economic elite, you have no ("near zero") influence over government policy, which is the textbook definition of a plutocracy.

How do we influence such a system?

By banging away from the outside; by forming mass movements with mass demonstrations and insurgency campaigns like the one Sanders is running. He is absolutely correct to assert that we need a "political revolution" to modify and end rule by the "billionaire class."

In fact, there is no other way. All the careful policy crafting and intellectual arguments are no match for dominance of the super-rich over politics. The ties that bind Washington, Wall Street and corporate elites will not break, let alone bend, unless faced with a severe popular uprising. Occupy Wall Street did more to put runaway inequality on the political map than did either Clinton or Obama.

Hillary, however, is betting that she can win over voters by claiming she's the practical one, not the ineffectual dreamer—that she can get things done. But she, along with the median voter, has no chance of influencing policy unless we are mobilized to pressure the political system from the outside as well. She's been an insider for so long she would rather talk quietly with her many elite contacts than threaten them with a mass mobilization. And let's face it: she is one of them. Yes, more liberal, t still a part of those elite structures.

For example, it's nearly impossible to imagine Hillary calling for a million people to march on Washington or Wall Street to demand the breakup of big banks and a financial speculation tax to pay for free higher education. This would be the case even if she had not taken $2 million in speaking fees from Wall Street firms. In short, she is asking us to let her be our representative among the plutocrats where she can make things happen "in real life."

Krugman knows better than to argue that great politicians are the key to great changes. But sometimes economists can be a little tone-deaf to social history. It was the massive labor upheaval of the 1930s coupled with countless mobilizations of the unemployed that created the space for the New Deal. It was a decades-long militant civil rights movement combined with strong labor support that pushed LBJ into his civil rights stands. It was the upheavals of the 1960s that led to passage of environmental, consumer and health and safety legislation. And it will indeed take a Sanders-inspired political revolution to budge our entrenched plutocrats.

Clinton (and Krugman) are also making an enormous tactical error. The more they stress pragmatism and acceptance of elite political control, the more they clear the field for Bernie Sanders. People already sense what Gilens and Page have so carefully researched—that America's basic political and economic structures are rigged against them. They want to send a message: We are tired of our crummy wages, our porous benefits, our lousy infrastructure, our crumbling schools and runaway inequality. Sanders expresses what they already feel to be true.

Moreover, it's factually incorrect to say that Sanders appeals to our hearts while Clinton appeals to our heads. Sanders' supporters are using their heads. The only way to change the system is to challenge it. Nothing short of a political revolution stands any chance of success. That's "hardheaded realism" of the first order.

If Sanders continues to gain support it's precisely because voters understand that the choice is clear—accept the reality of plutocracy and beg for crumbs, or fight to tear it down.

Les Leopold is the director of the Labor Institute in New York. His latest book is Runaway Inequality: An Activist's Guide to Economic Justice (Chelsea Green, 2015). For bulk orders contact him at LesLeopold@aol.com.

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Election 2016

The demeaning attacks on Bernie Sanders speak volumes about Hillary Clinton's worldview.

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