Thanks to the folks at Crooked Timber for putting this argument more clearly and forcefully:

As neoliberals have been unable to convince the public that government should simply stop providing key collective goods, and instead leave them to the market, they have instead opted for intermediate arrangements, such as privatization (but with regulators) and the contracting out of government work…This argument leads directly into a damning (and to me entirely convincing) indictment of the UK government’s privatization and ‘marketization’ of public services from Margaret Thatcher on. These have not created true markets. Instead, they have resulted in a kind of horrid chimera of government and private actor, with no obvious lines of accountability. The UK government turns to the private sector for project financing – but the private sector firm which leases the relevant facility back to the government has control for 20 or 30 years, under a fixed contract. “Long PFI contracts bring in private firms while limiting the role of the market, again demonstrating how the neoliberal policy shift is more about firms than about markets.” Lengthy chains of contracting and subcontracting relations mean that no-one is really accountable. The businesses who win these contracts win because they have a comparative advantage – in winning government contracts.

Note that not only is this hybrid creature just plain strange, the CT folks point out what I think was really bothering me all along, the lack of accountability.  No accountability on the government end.  No accountability through the market.

So the next time one of your colleagues or opponents is going on and on about “market-based approaches” and “privatization,” politely remind them that these arrangements are neither and call the approach by its proper name: ABOMINATION.

Photo Margaret Thatcher, The Iron Lady (ironically, a big fan of Hayek)

            

But how soon they forget all the craziness of the election that saw the first Jewish Mayor get elected by a mostly Black and White electorate, with most Latinos voting for their multiple Latino candidates, with only 38% voting for Emmanuel.  I still wonder, deep down, whether Rahm’s dominance provided him with a mandate that allows him to pretty much ignore Latinos.  I mean seriously, if you had got elected with mostly non-Latino votes and Latinos and their local representatives all endorsed Gery Chico (Del Valle  got a few too) or no one , would you feel pressure to deliver on Latino demands? Well, so far I haven’t seen anything that proves my secret thought, but we just finished 100 days so it’s all too soon to tell (though Sylvia Puente of the Latino Policy Forum said his establishment of the Office of New Americans is “symbolic”).

But that brings me to the POTUS.  A lot of folks seem to think that Barack is in deep @#@$ because he has been slow to address the deportations that have apparently been revved up under his administration.  Sure he is worried about this becoming too big of an issue, hence the recent administrative order to use prosecutorial discretion in  deportation cases with an emphasis on deporting only serious criminals.  But does Barack’s strategy consist of winning over the majority of Latinos?  Probably not. My guess is that the Axelrod strategy that Emmanuel used might hold in this election. It could look like this:

1. Latinos are disgusted because of the immigration issue; so , many will not vote, period.  The conservative ones on the other side of the immigration issue will not vote for Barack anyway.  We have always had low turnout, so there is little hope of Latino voters descending on the polls in droves.  The ones that will vote will probably be the most political and therefore could vote for Barack as the lesser of two evils.
2. Black folks are going to vote for Obama overwhelmingly if they vote at all.  I think it will be hard to get them as excited as they were when they had the opportunity to elect the first Black president.  The energy will just not be the same, even if his approval ratings were high.  But most that do vote, will be voting for Obama.
3. I’m not sure about Asians, but they generally vote Democrat except for the Vietnamese who still vote Republican.
4. I know there is  a sleeping giant, Muslim vote but I can’t see them being excited about Barack anyway thanks to heightened security measures of this administration as well as the aforementioned immigration policy. There’s no way in hell they are voting for a Republican.
5. Angry, tea-partying white folk will vote Republican but normal, independent white folk who are upset with Obama will only do so if a somewhat sane candidate wins the GOP nomination.  But I’ve yet to see one–Perry looks the best, but his best is crazy and Perry is already polling badly with them.

            

The main conclusion is that indebted governments in Europe that implemented recovery measures that appeared to be heavy on austerity, were paid back with civil unrest and riots.  While this makes perfect sense, what I found strange is that the actual officials who proposed such measures were NOT punished at the polls.  The paper also argues that the media’s fixation on the rioting and looting (sound familiar) didn’t facilitate the rise of protest movements.

Thinking about the folks back in London who are probably more like us than they are like their neighbors on the continent, I wonder if riots and chaos will make it across the pond.  Perhaps our media organizations and our politicians are too good at confusing the public about how the ridiculous policies we have been adopting (e.g. the debt ceiling non-deal) will affect them.

Interestingly, the London Riots appear to have been exacerbated by the killing by police of a black man, Mark Duggan, at Tottenham Station (see this funny clip of Darcus Howe telling the BBC that the riots were obviously going to happen in racist, classist Ole England ).  Jack Goldstone makes the point here that the riots look creepily like the LA Riots of 1992 when a black man, Rodney King, was beaten by police and riots ensued after the cops went on to be acquitted of any wrongdoing.

Americans are not generally the type to rise up in the Greek fashion, but with London now in flames and our own politicians insisting on balancing the budget on the backs of poor people while enabling the super rich to continue to live tax-free, the tension is palpable.

            

 

And what of the consequences of the elites ‘no new taxes’ mantra?   The US is about to move into 2012 with four factors coming into view – an unemployment rate over 9%, a trillion-dollar increase in taxes over ten years on ordinary workers when Obama’s social security tax cuts expire (see my previous post), the expiration of long-term unemployment insurance for those out of work for two years, and the continuation of a $42 billion per year tax cuts for the rich if the Bush tax cuts are not allowed to lapse.  Just as the French elites could not see that their actions would fuel an extreme populist backlash, so today’s Republicans don’t seem to realize that this combination will likely bring a populist backlash against the rich that will make any prior talk of ‘class warfare’ seem like a weak metaphor.

While I think Goldstone is correct in channeling Alexis de Tocqueville‘s assessment that the French elites “spoke as if ordinary people were deaf and blind to what they were saying,” I think he underestimates the modern rich.  As the Koch Brothers and Rupert Murdoch have demonstrated, one can make pro-rich policies look populist by funding groups like the Tea Party and slanting the news media to one’s cause.  As for what the future holds, I am starting to think that Orwell–not Tocqueville–had the best insights.

            

I know that our criminal justice system is broken and that people of color are disproportionately represented as both victims and perpetrators.Nearly half of all homicide victims in the United States are African American; the numbers for Latino victims are just as bleak. And therefore, African Americans and Latinos have an equal stake in what I describe as a smart on crime approach to fixing the system. We need to move beyond the false choice of asking: Are we tough on crime or are we soft on crime? We need to start asking: Are we smart on crime? When we’re smart on crime, we take steps to prevent crime from happening — like keeping our kids in school. When we’re smart on crime, we look beyond the one-size-fits-all solution to crime and punishment. We do more correcting and less collecting of prisoners.

That statement is from California Attorney General, Kamala D. Harris.  Well, kudos to her for saying what other attorneys general and state’s attorneys (that means you Anita Alvarez) are usually to afraid to say.  Her piece is basically a defense of public investment and redemption rather than a “lets coddle the criminals” rant.  Thank goodness that it wasn’t.  I’m tired of the false extremes in the criminal justice debate–well, actually, I’m tired of them in pretty much every debate in America these days.

Read the full article here.

            

• As black-white segregation has slowly declined since 1990, blacks have become less isolated from Hispanics and Asians, but their exposure to whites has hardly changed. Affluent blacks have only marginally higher contact with whites than do poor blacks.

 

• Asians and especially Hispanics have become more isolated from whites as their numbers have grown, and they both have markedly lower exposure to whites now than they did in 1990.  Income is moderately associated with these patterns for Hispanics (that is, affluent Hispanics experience lower isolation and higher contact with whites). Asians’ level of concentration in Asian neighborhoods, however, is unrelated to income, and exposure to whites is only modestly greater for higher-income Asians.

 

• With only one exception (the most affluent Asians), minorities at every income level live in poorer neighborhoods than do whites with comparable incomes. Disparities are greatest for the lowest income minorities, and they are much sharper for blacks and Hispanics than for Asians. Affluent blacks and Hispanics live in poorer neighborhoods than whites with working class incomes. There is considerable variation in these patterns across metropolitan regions. But in the 50 metros with the largest black populations, there is none where average black exposure to neighborhood poverty is less than 20 percent higher than that of whites, and only two metros where affluent blacks live in neighborhoods that are less poor than those of the average white.

 

The study goes on to conclude that segregation lowers the quality of life even for affluent minorities:

Residential segregation is not benign. It does not mean only that blacks and Hispanics, Asians and whites live in different neighborhoods with little contact between them. It means that whatever their personal circumstances, black and Hispanic families on average live at a disadvantage and raise their children in communities with fewer resources

I think there is a cultural pressure for many of us to not “sell-out” and leave the neighborhood.  For the well-educated, fear of adding to the brain-drain on the community you come from is sometimes reason enough to stay.  But, I have never really been one to get angry at someone who made the choice to live in a safer neighborhood with better schools.  It’s a personal choice.  If you make it, and if the neighborhood you are eyeing doesn’t prevent you from moving there through informal, racist screening processes, then that’s really none of my business.  In any case, this report shows that most of us aren’t allowed choosing to live in more affluent, white neighborhoods anyway. Thus, there is no point in lamenting the one Latino or Black family that does.

Read the full report here.

            

While it may look great that there are some cuts to defense spending, thus making the cuts in places besides social services, the President and Congress seem to have forgot that much of that spending also goes to middle class families.  Specifics weren’t laid out in the White House memo, but you can be assured that things like raises for soldiers and health care coverage  will be affected.  In fact, I have been having this conversation with my mother for a while with regard to her TRICARE Prime coverage.  That coverage which was once at the Cadillac level, is slowly but surely looking like Ford Fiesta.  I’m no fan of big military spending, but make no mistake, these cuts are not going to impact the big contractors making all the money in direct defense costs.  Programs like TRICARE will just get cut yet again.

So while military spouses like my Mom and poor people who benefit from social services will feel the “burden of deficit reduction,” the super-rich will still pay little to no taxes.

That’s not a shared burden.  That BS.

            

LATINOS ‘RECLAIMING’ AZTLAN. Some Latinos in the U.S. embrace a mythical “Aztlan,” roughly defined as the U.S. southwest that was once part of Mexico. Some Chicano activists say they have a right to the land, and conspiracy theorists believe the effort is well underway.

Evidence: The increasing numbers of Latinos in government, new laws that specifically benefit Latinos in the country legally and otherwise. Increasing acceptance of Spanish language and spread of Latino studies classes.

Rebuttal: Aztlan is primarily a symbolic designation, the increase in Latino officials reflects demographic changes, and legal changes are designed to benefit society at large.

Now, I do know a handful of guys who have said they would be up for doing such a thing, but as they are activists from the 1960s, I think they might have a hard time waging war with their bad knees, backs, and other ailments.  It might also be hard to get the weed out of their hands.  Is America “browning?”  Of course, it is–that could be viewed as a reconquista (if you’re  FOX news, you see reconquista everywhere!).  But I definitely don’t see an independent Aztlán on the horizon.

            

The paper itself quickly and efficiently dismisses all the usual theoretical suspects.  Lazy Latins vs Industrious Anglos? No way, Latin-America grew a lot and stayed pretty stable for a long time.  Bad political institutions? Nope, Latin-America was remarkably good about retiring institutions like slavery (Indian and African) and encomiendas. Catholicism? Nope, well, there’s nothing serious in the economic literature at least that rises above prejudice (sorry Weberians and other Protestant work ethic people).

According to the authors of the paper, the real reason for the divergence was that at the beginning of the colonial period, wages in England were already 4 times the WBPL (World Bank Poverty Line) while wages in the Iberian Peninsula were only two times the WBPL.  In a nutshell, the USA and Canada (Australia too, BTW) mirrored English wages because in order to attract settlers they had to pay as much or more.  Spanish and Portuguese colonies had a much lower bar.  That coupled with other unique assets (e.g. proximity of English colonies to the Mother country which allowed for cheaper trans-atlantic trade), the U.S. started off on much better footing with higher wages that allowed colonists to educate their children (human capital accumulation really) which increased innovation and labor saving machinery which led to increased productivity which resulted in even higher wages…Ok, obviously, the progress and prosperity “spiraled” for the North-North Americans.

While it’s a huge leap from colonial economies to today’s economy, I think that one thing is clear: you need good wages–not just any wages–to make a population better off over the long run.  This is the argument I have with people in the hood (even activists) who are often ready to settle for any wages because people are desperate. Sure, some job is better than no job in terms of eating dinner, but if we constantly accept crap wages (e.g. Wal-Mart wages), then we will never be at a point where we can develop our human capital like the more prosperous colonists did.  We end up settling for the modern world’s version of encomienda and that is positively non-progessive.

Above picture from Códice Kingsborough showing an encomendero abusing an Indian.