|Contents||Bulletin||Scripting in shell and Perl||Network troubleshooting||History||Humor|
Skepticism and Pseudoscience > Who Rules America > Neoliberal Brainwashing
|News||An introduction to Neoliberalism||Recommended books||Recommended Links||Anti-globalization movement||Neoliberalism as Trotskyism for the rich||Brexit as the start of the reversal of neoliberal globalization|
|Globalization of Financial Flows||Neoliberalism and Christianity||Alternatives to Neo-liberalism by Alex Callinicos||Ayn Rand and her Objectivism Cult||Neoliberal rationality||Key Myths of Neoliberalism||US Presidential Elections of 2016 as a referendum on neoliberal globalization|
|Zombie state of neoliberalism and coming collapse of neoliberalism||Pope Francis on danger of neoliberalism||Over-consumption of Luxury Goods as Market Failure||Definitions of neoliberalism||Neoliberal Brainwashing||Neoclassical Pseudo Theories||Populism|
|Media-Military-Industrial Complex||Neocons||New American Militarism||Casino Capitalism||Neocolonialism as Financial Imperialism||War is Racket||Inverted Totalitarism|
|Financial Crisis of 2008 as the Crisis of Neoliberalism and shift to neo-fascism||Neoliberal corruption||Financial Sector Induced Systemic Instability of Economy||Corruption of Regulators||"Fight with Corruption" as a smoke screen for neoliberal penetration into host countries||Deconstructing neoliberalism's definition of 'freedom'||Resurgence of neofascism as reaction on crisis of neoliberalism and neoliberal globalization|
|Elite Theory||Compradors||Fifth column||Color revolutions||Gangster Capitalism||Key Myths of Neoliberalism||Audacious Oligarchy and "Democracy for Winners"|
|If Corporations Are People, They Are Psychopaths||IMF as the key institution for neoliberal debt enslavement||Super Capitalism as Imperialism||Neoliberalism as a Cause of Structural Unemployment in the USA||Neoliberalism and inequality||Blaming poor and neoliberalism laziness dogma||Corporatist Corruption: Systemic Fraud under Clinton-Bush-Obama Regime|
|Peak Cheap Energy and Oil Price Slump||The Deep State||Predator state||Disaster capitalism||Harvard Mafia||Small government smoke screen|
|The Great Transformation||Monetarism fiasco||Neoliberalism and Christianity||Republican Economic Policy||In Goldman Sachs we trust: classic example of regulatory capture by financial system hackers||Ronald Reagan: modern prophet of profligacy||Milton Friedman -- the hired gun for Deification of Market|
|Libertarian Philosophy||Media domination strategy||Neoliberal Brainwashing -- Journalism in the Service of the Powerful Few||In Foreign Events Coverage Guardian Presstitutes Slip Beyond the Reach of Embarrassment||History of neoliberalism||Humor||Etc|
Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare. “There’s class warfare, all right, "Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning."
Make no mistake, the neo-Liberal fuckers are just as bad as the Stalinists
GB: once a great cultured nation, now a poorly-educated gangster mafia state, ruled by oligarchs and inhabited by soccer hooligans
Due to the size the introduction was moved to a separate page -- Neoliberalism: an Introduction
|Neoliberalism Bulletin, 2016||Neoliberalism Bulletin, 2015||Neoliberalism Bulletin, 2014||Neoliberalism Bulletin, 2013||Neoliberalism Bulletin, 2011||Neoliberalism Bulletin 2009||Neoliberalism Bulletin 2008|
Dec 07, 2016 | www.nakedcapitalism.com
Romer kicked off the debate in an essay, stating that for more than three decades, macroeconomics has gone backwards. He finds that the treatment of identification now is no more credible than in the early 1970s, but escapes challenge because it is so much more opaque. Macroeconomic theorists dismiss mere facts by feigning an obtuse ignorance about such simple assertions as "tight monetary policy can cause a recession." For Romer, the Nobel Prize-winning crop of macroeconomic theorists who transformed the field in the late 1970s and 1980s - Robert Lucas, Edward Prescott and Thomas Sargent – are the main people to be held responsible for this this development. Their models attribute fluctuations in aggregate variables to imaginary causal forces that are not influenced by actions that any person takes. Especially when it comes to monetary policy, the belief that it has no or little effect on the economy is disturbing, or as Romer puts it:
"The trouble is not so much that macroeconomists say things that are inconsistent with the facts. The real trouble is that other economists do not care that the macroeconomists do not care about the facts. An indifferent tolerance of obvious error is even more corrosive to science than committed advocacy of error."
... ... ...
Simon Wren-Lewis identifies yet another factor which lies at the heart of macroeconomic criticism: ideology. As an example he quotes Real Business Cycle (RBC) research from a few decades ago. That was only made possible because economists chose to ignore evidence about the nature of unemployment in recessions. There is overwhelming evidence that employment declines in a recession because workers are fired rather than choosing not to work, and that the resulting increase in unemployment is involuntary (those fired would have rather retained their job at their previous wage). Both facts are incompatible with the RBC model. Why would researchers try to build models of business cycles where these cycles require no policy intervention, and ignore key evidence in doing so? The obvious explanation is ideological. While Simon Wren Lewis cannot prove it was ideological, it is difficult to understand why one would choose to develop theories that ignore some of the existing evidence, in an area that lacks data. There is a reluctance among the majority of economists to admit that some among them may not be following the scientific method but may instead be making choices on ideological grounds. This is the essence of Romer's critique.
...it is all but indistinguishable from Milton Friedman's ideologically-driven description of the macroeconomy. In particular, Milton Friedman's prohibition of fiscal policy is retained with a caveat about the zero-lower bound in recent years. To argue otherwise is to deny Keynes' dictum that 'the ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood.'
PlutoniumKun, December 6, 2016 at 4:18 am
I can recall my very first lecture in Macroeconomics back in the mid 1980's when the Prof. freely admitted that macro had very little real world validity as the models simply didn't match the real world data. He advised us to focus on economic history if we wanted to understand how the real world worked. That was the only useful thing I learned from three years studying the subject.
Dr. George W. Oprisko, December 6, 2016 at 7:21 am
I cut y teeth on computer models of rainfall – streamflow relationships. We always started with constants derived from experimental or theoretical bases
Recently I was asked to critique a paper written by a colleague which reported results of a numeric model of plankton distribution in the Arabian Sea. In this paper his original constants based on known relationships gave results which did not agree with reality, so instead of looking for mistakes in his fundamentals, he massaged the constants until he got agreement. When I pointed out that he neglected the Somali Current, he was livid. That is, instead of thanking me for pointing out a glaring deficiency in his methodology, he chose to obfuscate.
I see the same thing prevalent in macro-economics, with the sole exception of Modern Monetary Theory. I find MMT to be the only variant which concretely explains the real economy.
What I find most egregous in Neo-classicism, is it's failure to accept that people invented government to perform tasks they individually could not.
Jake, December 6, 2016 at 5:24 am
..and none of the economists were held responsible, refused tenure, tried in court or had their nobel prizes taken away. They continued serving their pay masters or their ideologies and nothing changed. Life went on, gradually becoming shittier, full of anxiety and ultimately meaningless. But hey atleast the great information processor is satisfying your utility!
December 6, 2016 at 6:23 am
One Irish macro professor did quite well after the Irish economic crash (2008) informing everyone about the correct policy approaches on various public media. His university department had one of his peer reviewed papers online dating from 2005 which advocated the adoption of US style sub-prime mortgages as a 'solution' to rising housing costs. Around 2010 the paper was quietly removed from all servers. I regret not saving a copy so it could be linked to every time he popped up in public.
UserFriendly, December 6, 2016 at 3:01 pm
If you bookmarked it: https://archive.org/web/
or if it was a research papser, find it here: https://scholar.google.com/
look for the doi and plug that in here (site does not work in Chrome) http://gen.lib.rus.ec/scimag/index.php or here http://sci-hub.cc/
The 1st has an author search too, but it isn't as good, but it might work.
I Have Strange Dreams, December 6, 2016 at 5:43 ammakedoanmend December 6, 2016 at 7:58 am
Kill it with fire!
Economics is a foul and pestilent ghetto, an intellectual dead-end akin to Ptolemaic astronomy. The priests will continue adding epicycles to epicycles until they are dragged screaming to the asylum.
Burn the whole subject to the ground and sow the razed economics departments with salt. Require economists to ring a bell when approaching the uninfected and cry "unclean! unclean!"Steve H. December 6, 2016 at 9:23 am
actually belly-laughed – 1st ever belly-laugh from an interweb comment – Bravisimmo!
H/e, can't agree with you re: economics. As a historical and social area of study, it is valid in my book – even a necessity. Still, my eyes cross lately when I read the latest in economic "theory" on any scale. Such a dreary and detached subject these days. Rootless and toothless. Too bad.
bestbh2 December 6, 2016 at 1:19 pm
Every time a bell rings, an angel gets his wings. That is a called a positive externality in macroeconomics, and can therefore be defined in an equation. Which makes it thus so.Lyonwiss December 6, 2016 at 6:31 am
There is no chance of killing off this mystery cult as long as politicians rely on its ruminations and incantations to help perpetuate them in office.
There is always some revered academic economist readily available to support virtually any political narrative imaginable, even if it's total rubbish. It is truly a "science" for all seasons fostered by reverend figures with authority earned by many years diligent practice in translating gibberish into runes of mathematical formulae. That's more dainty than poking about in sheep guts with a sharp stick, but of little more use in the real world which lies outside the ivied towers.
Economists, like carny balloon sellers, are paid based on volume, not weight. Diligence blesses them with tenure followed by offers to serve private or public patrons perpetually engaged in rent-seeking. These made men (and women) are essentially set for life, regardless of whatever nonsense they may forever promote thereafter. A few are blessed by the good luck of a Nobel which guarantees a prosperous sinecure and unlimited opportunity to promote their own vacuous political narratives masqueraded as "science".
This cult enjoys perpetual protection within public and private safe spaces created by their well-heeled paymasters. It is one of a number of deeply attached parasites which cannot be safely excised from the corrupt body of the host without killing it.Yves Smith Post author December 6, 2016 at 6:39 am
We live in a post-truth or post-fact world, where truth and fact do not matter.
But the fact is: Keynes has never gone away in the sense that governments have always been trying to manage the economy with fiscal and monetary policies – which (to me) is the essence of Keynes and macroeconomics. Most governments run budget deficits to stimulate demand. It is merely cognitive dissonance of academics to think neoclassical economics only is mainstream and solely responsible for the GFC, just because to them there is an apparent bias in research funding at universities.Lyonwiss December 6, 2016 at 6:57 am
Have to tell you I don't agree entirely.
First, government is such a huge portion of the economy that its actions have huge influence and therefore the impact has to be managed. Pretending you can have some type of neutral autopilot is a false idea, but that is the bedrock of economic thinking, that economies have a natural propensity to equilibrium and that equilibrium is full employment.
Second, it's not done much these days, but the best forms of intervention are ones that are naturally countercyclical so you don't have politicians wrangling and have pork and election timing and results and inertia get in the way.OpenThePodBayDoorsHAL December 6, 2016 at 3:19 pm
I'm not defending neoclassical economics. In economics, the alternative to a wrong is another wrong. Governments are politically compelled to intervene. But with the Keynesian economic fallacy, their interventions make things worse in the long-run. Please visit my blog:
http://www.asepp.com/keynesian-fallacy-collapse/Ruben December 6, 2016 at 9:17 am
"The Battle of Bretton Woods" is very instructive. Start with two intellectuals (Keynes and Harry Dexter White) who were big fans of Stalinist Russia's command economy ("I've seen the future and it works!"). Last time I checked this kind of tomfoolery ("we will raise X number of cows because we think we'll need leather for Y number of shoes") has been utterly discredited. Implement for the global currency and trade systems. Fast forward to today where there are massive imbalances, global currency wars, and a race to zero and beyond that has sucked all demand from the future to the present and now the past. And the shining answer, the clarion rallying cry, is "we just need more debt, and we need some new rugs to sweep all the bad debt under".
All while "macro-economists" propagate models that completely misunderstand how money is actually created and distributed. All I can say is "Forward Soviet!".diptherio December 6, 2016 at 10:33 am
Indeed. Gov't is the biggest business in town in every economy, everything else, even giant corporations, are minuscule players in comparison. This is a large source of dynamical behavior, the swings and re-balancing as the State throw its weight around in the marketplace.Lyonwiss December 6, 2016 at 3:52 pm
the bedrock of economic thinking, that economies have a natural propensity to equilibrium and that equilibrium is full employment
And, of course, "full employment" is defined as whatever level of employment actually exists 'cause science!Foppe December 6, 2016 at 7:02 am
I should add that neoclassical economics has damaged economics by excluding explicitly the government sector in their models. As a result, the impact of government on the macroeconomy has not been properly understood. The empirical facts, without theories or equilibrium assumptions etc., show the failure of government policy of demand stimulation: http://www.asepp.com/fiscal-stimulus-of-consumption/craazyboy December 6, 2016 at 8:23 am
It seems to me that for something to be called "keynesian", it should also mean that the aim of those policies was to help create robust private demand (though I doubt Keynes was as emotionally handicapped as today's mainstream bean-counting theorists are, if only because gdp figures didn't yet dominate macro thinking in the manner they do today, thanks to everyone having received "economics education" in school); if not, it wolud more fairly be called Marxist, because he was the one from whom Keynes (indirectly, as he refused to read Marx personally) pilfered his insights. What matters is whether we've got 'socialism for the rich / incumbents / industrial complexes', or "socialism" (well, social-democrat, liberal new-dealerism) for the "masses".craazyboy December 6, 2016 at 8:30 am
Well, I have to say this article reminds me too much of the DNC sole searching over why Hillary didn't win. Just another room full of wantonly clueless people.
Does start out on a high note where Romer states the problem is economists don't care if they are winging and slinging BS from their arses same as chimpanzees.
I guess the article coulda ended there. But no.
Noah Smith laments a shortage of macro data – so the who knows how many gigs at FRED are found wanting and I guess the BLS, etc aren't up to snuff either. Or maybe Noah means they are fabricating phoney data? Then Noah doubles down on the efficacy of interest rate policy – after 9 years in the liquidity trap.
[Caution: The following is allegory – we are speaking of the high priestess here.]
We then are treated to JYell and her discovery of the buggy whip. She states there is current research being done on buggy whips, and more research is necessary. She is able to use big words to speak of these buggy whips. Some of these words are borrowed from real science – making this more scientific. Like hysteresis – and even an example for lay-off people. It's possible you may never work again and add to the long term employment rate! Yikes. Worse yet, their definition of "long term" is longer than 6 months. After that, 7 months or retire at 30 is all the same to them. "Heterogeneity" is another good one. For use in polite company. Has an Evil Twin named inequality and a macro version called crony capitalism. JYell can keep the hits coming!
I'm tired of typing someone else can take up the rest of it.Ruben December 6, 2016 at 9:06 am
oops. Editor asleep again. sole s/b soul. Or maybe not.John Zelnicker December 6, 2016 at 9:40 am
The complaint about not enough data struck me too; actually economist have vasts amounts of data to gain insights from and test hypothesis against because economies are well recorded human endeavours, recorded in actual painful detail thanks to the inexhaustible efforts of statemen and statewomen to know everything about the populations they control and harvest. Probably more data-oriented lines of research would lead to progress in macro-economy as a scholarly discipline?fledermaus December 6, 2016 at 2:37 pm
@Ruben – They want more data because the data that exists cannot be explained by their eloquent mathematical theories, which are based on assumptions that are ridiculous on their face e.g., rational expectations and utility maximization. The hope is that additional data will fit the theories better allowing them to remain comfortably ensconced in their fantasy world of regressions and p values.Barry December 6, 2016 at 12:52 pm
Which is how we get adjustments to CPI based on the premise that CPI is overstating inflation. Now the hip thing is that productivity is undermeasured because economists don't like what the numbers are saying, so we can expect an upwards adjustment there as well.H. Alexander Ivey December 6, 2016 at 9:16 am
One of the problems with all that data is that events not recorded or whose price can't be measured are defined as not really real.Steven Greenberg December 6, 2016 at 8:34 am
I'll take up my keys then.
Read Romer's article, twice. Will need a third try to fully get it, but as someone with a modest background in engineering and engineering mathematics, I still can't quite believe what Romer is saying. Do the economists he names really not understand the computer stat model they are using? Are they admitting to making up the fudge factors to make their 'data' fit their (wrong headed) totem pole, supply and demand? I mean, there it is in black and white, by the economists' own words, that their math is just flat out wrong.
Now Romer is writing for the inside crowd, as an long time, connected insider himself, so don't expect an easy read. But he writes quite clearly what is the problem with economics so the main idea, that macro economics, in rejecting an early model of macro economics (Keynesian) because said model was based on a few openly stated fudge factors, have spent the last 40 years building models that are 1. full with even more fudge factors, 2. these fudge factors are never openly stated, and 3. the new models have given truly disastrous results in the real world (also known as the US economy, amoung others). Along the way, he names names and steps on some toes. Then he finishes up with a full charge of how the 'dismal science' is a lying religion, nothing at all like truth seeking science.
Okay, I'll quit here before I hurt myself. Let someone else slam the keys. (haha)craazyboy December 6, 2016 at 6:10 pm
The economics I learned in the early 1960's seems to work as well now as it did back then. I was lucky enough to be so busy at work in the decades that followed, that I did not have a chance to keep up on the mis-education of the time. When I had the time to start paying more attention to the subject again, I couldn't understand what had happened to the knowledge that I had learned that seemed to explain all that was happening in the economy.Katharine December 6, 2016 at 10:05 am
The Neolib-Globalist Ministry Of Truth erased it. You must not have got the memo.chuck roast December 6, 2016 at 11:50 am
I was surprised to learn that Yellen had expressed any interest in the people permanently out of the labor market. I thought all the discussions of interest rates focused almost exclusively on what in my mind is the unemployment pseudo-rate, which completely ignores those people.
Regardless of which rate is considered, I have never been able to comprehend the mind that can talk about acceptable levels of unemployment. Acceptable to whom? The people who lose their homes, and sometimes their neighborhood networks when they have to move, and may with just a little bad luck slide into still worse conditions? The communities that see more people becoming burglars, muggers, bank robbers, drug dealers, and prostitutes because only the illegal economy has any place for them? I have never seen a sustained or general effort to look at the economic consequences of those events, much less an admission of the immorality of causing so much trouble. It seems to me that a macroeconomics that divorces itself from those possibly micro concerns will be forever irrelevant to good policy.ChrisAtRU December 6, 2016 at 1:17 pm
Way back prior to the great Permian-Triassic Extinction, I was fortunate enough to wander around an Economics Department where I could encounter intellectual dead-ends like Keynes, Marx, Polanyi, Kalecki, Veblen – all of whom prepared me to pump-gas at the local filling station oh wait!
Having somehow successfully survived the subsequent big-brain epoch, I settled comfortably into making a modest annual donation to a scholarship fund for budding economists at the olde U. Then it came to my attention that not only could one still obtain a BA in Economics, but the olde school was also awarding two different Bachelor on Science degrees in Economics. Breathtaking! Economics, an actual science! Like for example physics!
I am now in the reduced circumstance of donating only to my old high school in the doubtless vain hope that the youngsters will study enough science to be able to shoot these aspiring BS cone-heads to the moon.witters December 6, 2016 at 4:03 pm
It's 2016 and some Dismal Scientists are still debating whether "involuntary unemployment" exists.
Perhaps we should deploy them to that Carrier plant to investigate. So thankful for heterodox voices:
Abba Lerner – Functional Finance
Hyman Minsky – Financial Instability
Wynne Godley – Sectoral Balances
Entire MMT School – Mosler, Wray, Kelton, Tcherneva et al
#ThereIsHopeJim December 6, 2016 at 4:28 pm
Gee, why attack the one healthy sector of the economy, the Wealth Defence Industry?
(Why did so much of 'the social-democratic left' go along all this? I think John Rawls gave them the excuse. He said inequality is great if the worse off are better off under this economic system than they would be under a more equal one. The poor can therefore protest if they can show that if we did things more equally they would be better off. The task of the economist today is to ward this possibility off by ensuring that economic thought is utterly subservient to oligarchic extraction. It does this by lying – Trickle Down! Rising Tide Lifts all Boats! This has worn out. So next it does There Is No Alternative! – 'Those Jobs are Never Coming Back', 'Robots!' And finally, to make really certain, it turns the whole discipline into toadying intellectual fantasy. Romer homed in on the last.)ChrisPacific December 6, 2016 at 5:29 pm
"Too much market and too little state invites a backlash."
If anything, Philip Mirowski has persuasively argued that neoliberalism requires a powerful State.
He has shown that the neoliberal thought collective theorized an elaborate political mobilization, and recognized early on that the creation of a new market is a political process requiring the intervention of organized power. The political will to impose a market required a strong state and elaborate regulation and also that the State would need to expand its economic and political power over time.
The neoliberal market had to be imposed it did not just happen. A key issue for the future is defining the nature of the state–whether under neoliberalism or MMT or under Trump or Sanders, or left populist or right populist.Robert NYC December 7, 2016 at 2:22 pm
Mankiw belongs in the non-ideological camp? I don't see how anybody with a brain could read any of his work past the first page and still hold that view.
I'm imagining them all as engineers on the deck of a half-submerged Titanic, debating about whether the hull integrity model might perhaps not have been 100% accurate.susan the other December 6, 2016 at 5:43 pm
agreed, Mankiw is an intellectual clown and he has been mis-educating students for decades now.Dick Burkhart December 6, 2016 at 10:00 pm
Ann Pettifor. give me ann pettifor always. she never puts the cart before the horse, only the ideological neoliberals try to do that while keeping a straight face – they are quintessential con artists if there ever were.RBHoughton December 6, 2016 at 10:17 pm
Excellent article, except it failed to point out that there are realistic and successful modeling techniques, in addition to historical studies. These techniques are based on the nonlinear nature of real world economies. Just use complexity and evolutionary techniques like agent based models and nonlinear dynamical systems. Nothing new here – I still think that the limits-to-growth models ("system dynamics" = nonlinear dynamical systems) of the early 1970s represent the best mathematical economics ever done. And the economists' agent based models are just a variation on cellular automata, which have been used with notable success in other fields for many decades.
The problem is that economists either maintained a deliberate ignorance of such methods, or have outright rejected them, like Nordhaus with system dynamics. In part this is because these techniques involve a different mind set: they trade off simplistic models that are easy to understand, but whose assumptions are demonstrably false, with complexity results that give much better real world results but have more nuanced narratives.ewmayer December 7, 2016 at 4:06 am
Ann Pettifor is right about Brexit imo. The belief and the fact is that government is trying a fast one on the people without being straightforward in its motives or intentions and a major cause of the discontent and disillusionment seems to stem from the macro-economic error she highlights.
People don't want this mumbo-jumbo any more. The old professions – medicine, accountancy, law – created jargons of specialist words and phrases (usually Latin) to make their speech and writings incomprehensible to the hoi polloi. Then in recent decades all sorts of trades have adopted the same jargon approach to mystifying their work. Enough already! Say what you mean, mean what you say.UserFriendly December 7, 2016 at 4:13 am
"Nick Bunker points out that in a recent speech, the Federal Reserve Chair Janet Yellen raised important questions about macroeconomic research in the wake of the Great Recession."
Hint: Citing an ivory-tower twit like J-Yel as "raising important questions" is a huge bullshit tell. While she was at it, did Janet raise any important questions as to why virtually every highly credentialed macroeconomist on planet earth completely fail to foresee the global financial crisis and the massive distortions, in very large part caused by the machinations of the high priests of those "believers in the power of monetary policy", which portended its coming? But, on to the bullshit:
"The first area of interest is the influence of aggregate demand on aggregate supply. Yellen points to research that increasingly finds so-called hysteresis effects in the macroeconomy. Hysteresis, a term borrowed from physics, is the idea that short-run shocks to the economy can alter its long-term trend. One example of hysteresis is workers who lose jobs in recessions and then are not drawn back into the labuor [sic] market but rather permanently locked out, therefore increasing the long-term unemployment rate."
That's irreversibility, not hysteresis. The latter is a special case of the former, which the chosen example does not illustrate. An example of hysteresis from my shower's temperature control: I find the temp is a tad too high, and turn the control a bit toward the cold setting. But I overshoot my target, and now it's too cold. Nudge back toward hot, but the somewhat-sticky mechanism again overshoots and lands more or less on the starting "too hot" position. But the water is still too cold, and I find I have to nudge even further toward hot to fix that. That's hysteresis. In the context of the recession example, hysteresis would be e.g. if once the E/P ratio had recovered to its pre-recession level but growth and its correlates remained weaker than expected, say due to the "recovery jobs" being on average of poorer quality than those which were lost. Kinda like the current 8-year-long "recovery", come to think of it! But I will admit that glossing over such messy real-world details like "widespread worker immiseration" with hifalutin terminology-borrowed-form-actual-science like "hysteresis:" is a great way to make oneself sound important, cloistered there in one's ivory tower.
"Another open research question that Yellen raises is the influence of "heterogeneity" on aggregate demand. Ignoring this heterogeneity in the housing market and its effects on economic inequality seems like something modern macroeconomics needs to resolve."
Ah yes, "needs to resolve" - that implies lots of high-powered academic conferences and PhD theses. And it's so wonderfully wishy-washy compared to "is something only a joke pretend-scientific discipline would even need to consider stopping doing, because no self-respecting discipline would have abandoned assumptions of homogeneity in roughly Year 2 of said discipline's evolutionary history."
"Yellen raises other areas of inquiry in her speech, including better understanding how the financial system is linked to the real economy and how the dynamics of inflation are determined.
Hey, when y'all finally "better understand" how this whole "financial system" thingy is linked to the real economy, by all means do let us know, because it seems like such a linkage might have, like, "important ramifications", or something. As to inflation, you mean actual inflation, or the fake measures thereof the folks at the world's central banks make their stock in trade? You know, for example, "in determining house price inflation we studiously ignore actual house prices and instead use an artificial metric called Owner's Equivalent Rent, which itself studiously ignores actual prices renters pay. Ain't it cool?"
Sorry if I sound grumpy, but this article is rather reminiscent of reading US Dem-party insiders pretending to "soul search" in re. Election 2016. Let's see:
"Another open research question that Team HRC raises is the influence of "heterogeneity" on voting preference. Ignoring this heterogeneity in the electoral trends and its effects on election outcomes seems like something modern macroelectorodynamics needs to resolve."
1970s and 1980s - Robert Lucas, Edward Prescott and Thomas Sargent – are the main people to be held responsible for this this development.
Is there something I can say to make sure the automod snags me when I'm pointing out a typo so you don't have to keep the comment?
charleshughsmith.blogspot.comCorrespondent Jason H. alerted me to the work of author Thomas Sheridan ( Puzzling People: The Labyrinth of the Psychopath), who claims to have coined the term gaslighting.
As noted yesterday, gaslighting has often been used in the context of personal relationships to describe a manipulative person's attempts to undermine and control their romantic partner.
In a larger context, these manipulative techniques can also be applied to our perception of the entire economy:
- Questioning, belittling, discounting and undermining our experience of economic "animal spirits" and general conditions.
- Overwriting our memory of the economy of the past, again by undermining, questioning and belittling our memories.
- Discrediting and marginalizing our definitions of economic well-being, in favor of the manipulator's definition of our well-being.
- Using authority and "experts" to disqualify and discredit dissenting views.
- Denigrate and deny our lived experience of economic conditions by repeating the institutionalized authority-approved narrative of "what actually happened."
- Disorient, discredit and destroy dissent with a torrent of false statistics, false narratives, false accusations and false claims of our errors.
Dec 06, 2016 | www.moonofalabama.org&Debsisdead | Dec 4, 2016 7:50:41 PM | 106and Another Neoliberal bites the dust
News outta Italy is also good Matteo Renzi's attempt to amend the constitution to make the government rather than the entire legislature (both houses) powerful enough to change laws has gone down in a screaming prang. Matteo Renzi has to resign since that is what he promised, and just for a change the populist replacement doesn't appear to be an islamophonic fascist.
I've hesitated about whether to apply the word "neoconservative" to persons like Bush, Cheney and Rumsfeld. I tend to follow the Christian Science Monitor list. Paul Wolfowitz, Libby, Douglas Feith, Richard Perle, Richard Bolton, and Elliott Abrams are intellectuals absorbed in the project of using U.S. military power to remake the Middle East to improve Israel's long-term security interests. (Hannah, David Wurmser, Eric Edelman, and other White House staffers not on the Monitor's dated list also fall into this category.)
Ultimate decision-makers Bush, Cheney and Rumsfeld on the other hand are sometimes referred to as "aggressive nationalists." They are no doubt Christian Zionists, but are probably most interested in transforming the "Greater Middle East" in the interests of corporate America in an increasingly competitive world. They're probably more concerned about the geopolitics of oil and the placement of "enduring" military bases to "protect U.S. interests" than the fate of Israel.
Dreyfuss' article suggests that Cheney (and thus, the administration) sees China as the biggest long-term threat to those interests.
If conflict with China is inevitable,
it makes sense to have U.S. bases in Afghanistan, Kyrgyzstan, Iraq and maybe Iran and Syria. If China is dependent on Middle East oil, it makes sense for the U.S. to be able to control how and where it flows from the Caspian Sea and Persian Gulf oil fields.
It makes sense to cultivate an alliance with India, risking the accusation of nuclear hypocrisy in doing so. It makes sense to ratchet up tensions on the Korean Peninsula, by linking North Korea to Iran and Iraq, calling it "evil," dismissing South Korea's "sunshine diplomacy" efforts and encouraging Japan to take a hard line towards Pyongyang.
It makes sense to get Tokyo to declare, for the first time, that the security of the Taiwan Straights is of common concern to it and Washington. It makes sense to regain a strategic toehold in the Philippines, in the name of the War on Terror, and to vilify the growing Filipino Maoist movement.
It makes sense for a man like Cheney, who decided on Bush's staff in late 2000, to seed the cabinet with strategically-placed neocons who have a vision of a new Middle East.
(1) that vision fits in perfectly with the broader New World Order and U.S. plans to contain China, and
(2) the neocons as a coordinated "persuasion" if not movement, with their fingers in a dozen right-wing think tanks, and the Israel Lobby including its Christian Right component, and the academic community, are well-placed to serve as what Dreyfuss calls "acolytes."
They are equipped with a philosophical outlook that justifies the use of hyped, imagined threats to unite the masses behind rulers' objectives and ambitions, to suppress dissent and control through fear. They're inclined to identify each new target as "a new Hitler," and to justify their actions as "an answer to the Holocaust."
They have served Cheney well, and he them so far. They're all being exposed, maybe weakened. But as Dreyfuss states at the end of his article, "The true measure of how powerful the vice president's office remains today is whether the United States chooses to confront Iran and Syria or to seek diplomatic solutions. For the moment, at least, the war party led by Dick Cheney remains in ascendancy."
GARY LEUPP is Professor of History at Tufts University, and Adjunct Professor of Comparative Religion. He can be reached at: firstname.lastname@example.org
Nov 30, 2016 | angrybearblog.com
What follows is from Today's Democratic Party: Meeting America's Challenges, Protecting America's Values , a.k.a., the 1996 Democratic Party Platform. This is the section on immigration. I took the liberty of bolding pieces I found interesting.
Democrats remember that we are a nation of immigrants. We recognize the extraordinary contribution of immigrants to America throughout our history. We welcome legal immigrants to America. We support a legal immigration policy that is pro-family, pro-work, pro-responsibility, and pro-citizenship , and we deplore those who blame immigrants for economic and social problems.
We know that citizenship is the cornerstone of full participation in American life. We are proud that the President launched Citizenship USA to help eligible immigrants become United States citizens. The Immigration and Naturalization Service is streamlining procedures, cutting red tape, and using new technology to make it easier for legal immigrants to accept the responsibilities of citizenship and truly call America their home.
Today's Democratic Party also believes we must remain a nation of laws. We cannot tolerate illegal immigration and we must stop it. For years before Bill Clinton became President, Washington talked tough but failed to act. In 1992, our borders might as well not have existed. The border was under-patrolled, and what patrols there were, were under-equipped. Drugs flowed freely. Illegal immigration was rampant. Criminal immigrants, deported after committing crimes in America, returned the very next day to commit crimes again.
President Clinton is making our border a place where the law is respected and drugs and illegal immigrants are turned away. We have increased the Border Patrol by over 40 percent; in El Paso, our Border Patrol agents are so close together they can see each other. Last year alone, the Clinton Administration removed thousands of illegal workers from jobs across the country. Just since January of 1995, we have arrested more than 1,700 criminal aliens and prosecuted them on federal felony charges because they returned to America after having been deported.
However, as we work to stop illegal immigration, we call on all Americans to avoid the temptation to use this issue to divide people from each other. We deplore those who use the need to stop illegal immigration as a pretext for discrimination . And we applaud the wisdom of Republicans like Mayor Giuliani and Senator Domenici who oppose the mean-spirited and short-sighted effort of Republicans in Congress to bar the children of illegal immigrants from schools - it is wrong, and forcing children onto the streets is an invitation for them to join gangs and turn to crime.
Democrats want to protect American jobs by increasing criminal and civil sanctions against employers who hire illegal workers , but Republicans continue to favor inflammatory rhetoric over real action. We will continue to enforce labor standards to protect workers in vulnerable industries. We continue to firmly oppose welfare benefits for illegal immigrants. We believe family members who sponsor immigrants into this country should take financial responsibility for them, and be held legally responsible for supporting them.
Oct 28, 2015 | The Guardian
Every so often a society decides which of its citizens really matter. Which ones get the star treatment and the big cash handouts – and which get shoved to the bottom of the pile and penalised. These are the big, rough choices post-crash Britain is making right now.
A new hierarchy is being set in place by David Cameron in budget after austerity budget. Wealthy pensioners: winners. Young would-be homeowners: losers. Millionaires see their taxes cut to 45%, while the working poor pay a marginal tax rate of 80%. Big business gets to write its own tax code; benefit claimants face harsh sanctions.
When the contours of this new social order are easy to spot, they can cause public uproar – as with the cuts to tax credits. Elsewhere, they're harder to pick out, though still central. It is into this category that the crisis in the British steel industry falls.
It would be easy to tune out the past few weeks' headlines about plant closures and job losses as just another story of business disaster. But what's happening to our steelworkers, and what we do to protect them, goes to the heart of the debate about which people – and which places – count in Britain's political economy.
innocuously 28 Oct 2015 21:02
The British people, the ordinary British people must have complete and utter contempt for this British Government of Cameron and Osborne.
Why the hell does this incompetent, uncaring as well as utterly pedantic government in its pursuit of non-government help (except when it comes to getting their Chinese Communist buddies to build a nuclear power station in Britain. Why on earth do we need to be told by an obviously astute, caring, concerned and intelligent individual by the name of Aditya Chakrabortty what is so manifestly wrong, how the French, Germans and Dutch draw money to help their industries from the European Commission Globalisation Adjustment Fund.
Once Britain (or was it England?) was called the Workshop of the World but the Forcking governments of the likes of Cameron, Osborne, Blair and Brown do not seem to give a stuff. They have poured billions of pounds into the bloody banking system which can be seen to pretty much of a giant cesspit of greed, whose leaders award themselves with giant bonuses from their customers money. Britain is not a country just of greedy Banksters and elitist politicians it should be a country of industry workers.
As Chakrabortty states once the steel industry is gone it is gone and with it so much other manufacturing capability but these Contemptible shitbag-like individuals in this vile- behaving government cannot seem to get this into their apparently stupid heads.
Cameron's and Osborne's government has behaved with utter wickedness, evil and stupidity in selling out Britain, its industry and infrastructure to a China which is even now trampling on the human rights of its people and threating all its neighbours around the South China Sea and all we get in Britain from these contemptible elitist politicians is an uncaring watching of the destruction of its industry and a selling out of its security and infrastructure.
MikeFerro1 28 Oct 2015 20:55
This mess, like much else that's wrong with the current state of Britain, is directly attributable to our membership of the European Union.
Outside the EU we could
1. From our own seat on the World Trade Organisation tackle China over dumping which is illegal under WTO rules
2. Provide state support to our steel industry if we chose to
3. Not have sky high energy prices due to our closing down perfectly good coal fired generating plants at the same time as Germany and China (to name but two) are building new ones
I know some other EU nations appear to get round these difficulties but if we weren't in the EU we wouldn't have to, we'd make our own choices.
Rivett4PM 28 Oct 2015 20:08
The comparison between the steel industry and the City is flawed. It was a consequence of the bail outs of RBS and HBOS that many jobs were saved in the City, but not the reason why the bail outs were undertaken. The banking bail outs were aimed at saving the UK economy as a whole, which would have collapsed without access to the credit/liquidity provided by the banking industry. The knock on effects of the steel industry shut down will be far reaching but nowhere near the same scale as would have been the case if the same had occurred in banking. This is, I am sure, no comfort to the families of steel workers and the surrounding communities, but let's not pretend that bankers received special favor simply because they are bankers.
Dec 15, 2015 | Economist's View
pgl said..."To some extent that's correct, but competitive capitalism is not divisive. In fact, it is just the opposite. Competition is a great leveling force. For example, when a firm discovers something new, other firms, if they can, will copy it and duplicate the innovation. If a firm finds a highly profitable strategy, other firms will mimic it and take some of those profits for themselves. A firm might temporarily separate itself from other firms in an industry, but competition will bring them back together. Sometimes there are impediments to this leveling process such as patents, monopoly power, and talent that is difficult to duplicate, but competition is always there, waiting and watching."DrDick ->pgl... December 15, 2015 at 10:00 AM
Nice defense of the market place with the appropriate caveat about how monopoly power can interfere with it to the benefit of the few. We should note there is monopsony power which at times impedes wages from rising. In such cases, unions and minimum wages can help not hurt. Which is a shout out to Seattle for letting Uber driving unionize.That really gets to my critique of capitalism. While Mark is certainly correct about emerging markets, mature capitalism inevitably trends toward monopoly/oligopoly where all the benefits disappear and we get the mess we are in today.Dan Kervick ->DrDick... December 15, 2015 at 10:58 AMWhen societies take the restraints off competition and free markets, inequality follows in its wake. It happened in the Gilded Age and it happened in the Neoliberal Era. the picture of competition leading to leveling is a jejune textbook fantasy.pgl ->Dan Kervick...
Societies have sometimes succeeded in building broad prosperity and a fairly level distribution of income. They have done it by creating strong socializing institutions and laws that place restraints on individual economic liberty and accept the necessity of some degree of intelligent planning.Yawn! Do define the "Neoliberal Era"? Is that the one where we passed anti-trust legislation or the one where it was gutted? No scratch that - we have had enough of your bloviating for one day.likbez ->pgl... December 15, 2015 at 11:08 AMSyaloch ->Dan Kervick...
"Do define the "Neoliberal Era"? "
I would define it as a perversion of Trotskyism -- Trotskyism for the rich.
See Washington consensus for the set of policies neoliberalism enforces:
Also see Wendy Brown interview What Exactly Is Neoliberalism to Dissent Magazine (Nov 03, 2015)
== some quotes ===
"... I treat neoliberalism as a governing rationality through which everything is "economized" and in a very specific way: human beings become market actors and nothing but, every field of activity is seen as a market, and every entity (whether public or private, whether person, business, or state) is governed as a firm. Importantly, this is not simply a matter of extending commodification and monetization everywhere-that's the old Marxist depiction of capital's transformation of everyday life. Neoliberalism construes even non-wealth generating spheres-such as learning, dating, or exercising-in market terms, submits them to market metrics, and governs them with market techniques and practices. Above all, it casts people as human capital who must constantly tend to their own present and future value. ..."
"... The most common criticisms of neoliberalism, regarded solely as economic policy rather than as the broader phenomenon of a governing rationality, are that it generates and legitimates extreme inequalities of wealth and life conditions; that it leads to increasingly precarious and disposable populations; that it produces an unprecedented intimacy between capital (especially finance capital) and states, and thus permits domination of political life by capital; that it generates crass and even unethical commercialization of things rightly protected from markets, for example, babies, human organs, or endangered species or wilderness; that it privatizes public goods and thus eliminates shared and egalitarian access to them; and that it subjects states, societies, and individuals to the volatility and havoc of unregulated financial markets. ..."
"... with the neoliberal revolution that homo politicus is finally vanquished as a fundamental feature of being human and of democracy. Democracy requires that citizens be modestly oriented toward self-rule, not simply value enhancement, and that we understand our freedom as resting in such self-rule, not simply in market conduct. When this dimension of being human is extinguished, it takes with it the necessary energies, practices, and culture of democracy, as well as its very intelligibility. ..."
"... For most Marxists, neoliberalism emerges in the 1970s in response to capitalism's falling rate of profit; the shift of global economic gravity to OPEC, Asia, and other sites outside the West; and the dilution of class power generated by unions, redistributive welfare states, large and lazy corporations, and the expectations generated by educated democracies. From this perspective, neoliberalism is simply capitalism on steroids: a state and IMF-backed consolidation of class power aimed at releasing capital from regulatory and national constraints, and defanging all forms of popular solidarities, especially labor. ..."
"... The grains of truth in this analysis don't get at the fundamental transformation of social, cultural, and individual life brought about by neoliberal reason. They don't get at the ways that public institutions and services have not merely been outsourced but thoroughly recast as private goods for individual investment or consumption. And they don't get at the wholesale remaking of workplaces, schools, social life, and individuals. For that story, one has to track the dissemination of neoliberal economization through neoliberalism as a governing form of reason, not just a power grab by capital. There are many vehicles of this dissemination -- law, culture, and above all, the novel political-administrative form we have come to call governance. It is through governance practices that business models and metrics come to irrigate every crevice of society, circulating from investment banks to schools, from corporations to universities, from public agencies to the individual. It is through the replacement of democratic terms of law, participation, and justice with idioms of benchmarks, objectives, and buy-ins that governance dismantles democratic life while appearing only to instill it with "best practices." ..."
"... Progressives generally disparage Citizens United for having flooded the American electoral process with corporate money on the basis of tortured First Amendment reasoning that treats corporations as persons. However, a careful reading of the majority decision also reveals precisely the thoroughgoing economization of the terms and practices of democracy we have been talking about. In the majority opinion, electoral campaigns are cast as "political marketplaces," just as ideas are cast as freely circulating in a market where the only potential interference arises from restrictions on producers and consumers of ideas-who may speak and who may listen or judge. Thus, Justice Kennedy's insistence on the fundamental neoliberal principle that these marketplaces should be unregulated paves the way for overturning a century of campaign finance law aimed at modestly restricting the power of money in politics. Moreover, in the decision, political speech itself is rendered as a kind of capital right, functioning largely to advance the position of its bearer, whether that bearer is human capital, corporate capital, or finance capital. This understanding of political speech replaces the idea of democratic political speech as a vital (if potentially monopolizable and corruptible) medium for public deliberation and persuasion. ..."
"... My point was that democracy is really reduced to a whisper in the Euro-Atlantic nations today. Even Alan Greenspan says that elections don't much matter much because, "thanks to globalization . . . the world is governed by market forces," not elected representatives. ..."I like where you're going, but your narrative here has a few problems:DrDick ->Syaloch...
"When societies take the restraints off competition and free markets, inequality follows in its wake."
Free markets have restraints? Then they're not really "free", are they? And isn't that the point?
"They have done it by creating strong socializing institutions and laws that place restraints on individual economic liberty..."
I think Mark is defining economic liberty as the opposite of what you have in mind:
"The system works best when people have the freedom to enter a new business (if they have the means and are willing to take the risk). It works best when people compete for jobs on equal footing, have access to the same opportunities, when there are no artificial barriers in society that prevent people from reaching their full potential."
Why not just say that strong socializing institutions and laws *increase* economic freedom?More to the point, "free markets" (largely unregulated) do not, have never, and cannot exist as a viable system. Strong government regulation is essential to their viability.Dan Kervick ->Syaloch...Jeff Bezos had the freedom to create and enter a new business, and now he's a multi-gazillionaire who uses his monopoly power to dictate terms. Mark Zuckerberg and the Koch brothers have used their economic freedom to make themselves spectacularly wealthy and then move to buy control over political processes.Dan Kervick ->Syaloch...
The textbook picture of competition doesn't match reality. In that picture the competitive economy is like an eternal game between equals. The players come and go, but no one ever wins. The game goes on and on and on and on, and the conditions of the players is always parity.
I don't know where economists came by this picture, but that's not what happens in most instances in the real world. Generally, if you start out with a bunch of even competitors on a competitive economic field, they will compete until one player defeats all of the others and rules the field. Along the way, tacit coalitions will be built to gang up on the largest competitor and drive out all of the small fry. The system tends with certainty toward oligopoly, if not always to monopoly. The only way you can approximate enduring conditions of perfect competition is by rigging the game with a bunch of highly restrictive rules designed to prevent human nature from taking its course. For example, the ancient Greeks had a rule which allowed them to ostracize citizens who had gotten too big.
I'm by no means arguing to get rid of private enterprise. But other countries have managed to make intelligent use of restrained capitalist mechanisms within a more civilized and enlightened social order. The United States has become an insane country: fanatically violent, aggressive, uncivilized, nasty and anti-social. Conflict, competition and individual liberty are not effectively balanced by moral, religious and political institutions that inhibit the vicious and narcissistic tendencies of human beings. The popular image of the meaning of life perpetuated my the mass media is crass and nihilistic."Why not just say that strong socializing institutions and laws *increase* economic freedom?"likbez ->Syaloch...
I agree there are different kinds of freedom. Some restrictions on the economic freedom of capitalists are enhancements of the workers' freedom not to live in fear of getting canned or impoverished.
But I really want to resist the doctrinal pressure in the US ideological system to cast everything in the language of freedom. There are other important human valuesin addition to freedom. And not every case in which people are given more choices makes them, or the people around them, happier.The whole idea of "free markets" is an important neoliberal myth. Free for whom?ilsm ->DrDick...
Only for multinationals. The first for opening markets for multinationals under the banner of "free markets" is the cornerstone of neoliberal ideology.
Free from what?
Free from regulation.
What about "fair markets" for a change?US capitalism is not capitalism, it is exploitive greed and bankster plundering.DrDick ->ilsm...I agree with your characterization, but US capitalism is the only kind of actual capitalism that has ever actually existed. Everywhere else has tempered its excesses with a healthy dose of socialism.pgl ->DrDick...19th century UK was far more laissez faire than our current set of rules. No socialism there. Which was what Marx complained about.DrDick ->pgl...Which really makes my point, actually. You see the same basic patterns everywhere in the 19th century that you do in the US today. We have only mildly reined it in compared to most of the developed world.
It has been our undertaking, since 2010, to chronicle our understanding of capitalism via our book The Philosophy of Capitalism . We were curious as to the underlying nature of the system which endows us, the owners of capital, with so many favours. The Saker has asked me to explain our somewhat crude statement 'Capitalism Requires World War'.
The present showdown between West, Russia and China is the culmination of a long running saga that began with World War One. Prior to which, Capitalism was governed by the gold standard system which was international, very solid, with clear rules and had brought great prosperity: for banking Capital was scarce and so allocated carefully. World War One required debt-capitalism of the FIAT kind, a bankrupt Britain began to pass the Imperial baton to the US, which had profited by financing the war and selling munitions.
The Weimar Republic, suffering a continuation of hostilities via economic means, tried to inflate away its debts in 1919-1923 with disastrous results-hyperinflation. Then, the reintroduction of the gold standard into a world poisoned by war, reparation and debt was fated to fail and ended with a deflationary bust in the early 1930's and WW2.
The US government gained a lot of credibility after WW2 by outlawing offensive war and funding many construction projects that helped transfer private debt to the public book. The US government's debt exploded during the war, but it also shifted the power game away from creditors to a big debtor that had a lot of political capital. The US used her power to define the new rules of the monetary system at Bretton Woods in 1944 and to keep physical hold of gold owned by other nations.
The US jacked up tax rates on the wealthy and had a period of elevated inflation in the late 40s and into the 1950s – all of which wiped out creditors, but also ushered in a unique middle class era in the West. The US also reformed extraction centric institutions in Europe and Japan to make sure an extractive-creditor class did not hobble growth, which was easy to do because the war had wiped them out (same as in Korea).
Capital destruction in WW2 reversed the Marxist rule that the rate of profit always falls. Take any given market – say jeans. At first, all the companies make these jeans using a great deal of human labour so all the jeans are priced around the average of total social labour time required for production (some companies will charge more, some companies less).
One company then introduces a machine (costed at $n) that makes jeans using a lot less labour time. Each of these robot assisted workers is paid the same hourly rate but the production process is now far more productive. This company, ignoring the capital outlay in the machinery, will now have a much higher profit rate than the others. This will attract capital, as capital is always on the lookout for higher rates of profit. The result will be a generalisation of this new mode of production. The robot or machine will be adopted by all the other companies, as it is a more efficient way of producing jeans.
As a consequence the price of the jeans will fall, as there is an increased margin within which each market actor can undercut his fellows. One company will lower prices so as to increase market share. This new price-point will become generalised as competing companies cut their prices to defend their market share. A further n$ was invested but per unit profit margin is put under constant downward pressure, so the rate of return in productive assets tends to fall over time in a competitive market place.
Interest rates have been falling for decades in the West because interest rates must always be below the rate of return on productive investments. If interest rates are higher than the risk adjusted rate of return then the capitalist might as well keep his money in a savings account. If there is real deflation his purchasing power increases for free and if there is inflation he will park his money (plus debt) in an unproductive asset that's price inflating, E.G. Housing. Sound familiar? Sure, there has been plenty of profit generated since 2008 but it has not been recovered from productive investments in a competitive free market place. All that profit came from bubbles in asset classes and financial schemes abetted by money printing and zero interest rates.
Thus, we know that the underlying rate of return is near zero in the West. The rate of return falls naturally, due to capital accumulation and market competition. The system is called capitalism because capital accumulates: high income economies are those with the greatest accumulation of capital per worker. The robot assisted worker enjoys a higher income as he is highly productive, partly because the robotics made some of the workers redundant and there are fewer workers to share the profit. All the high income economies have had near zero interest rates for seven years. Interest rates in Europe are even negative. How has the system remained stable for so long?
All economic growth depends on energy gain. It takes energy (drilling the oil well) to gain energy. Unlike our everyday experience whereby energy acquisition and energy expenditure can be balanced, capitalism requires an absolute net energy gain. That gain, by way of energy exchange, takes the form of tools and machines that permit an increase in productivity per work hour. Thus GDP increases, living standards improve and the debts can be repaid. Thus, oil is a strategic capitalistic resource.
US net energy gain production peaked in 1974, to be replaced by production from Saudi Arabia, which made the USA a net importer of oil for the first time. US dependence on foreign oil rose from 26% to 47% between 1985 and 1989 to hit a peak of 60% in 2006. And, tellingly, real wages peaked in 1974, levelled-off and then began to fall for most US workers. Wages have never recovered. (The decline is more severe if you don't believe government reported inflation figures that don't count the costof housing.)
What was the economic and political result of this decline? During the 20 years 1965-85, there were 4 recessions, 2 energy crises and wage and price controls. These were unprecedented in peacetime and The Gulf of Tonkin event led to the Vietnam War which finally required Nixon to move away from the Gold-Exchange Standard in 1971, opening the next degenerate chapter of FIAT finance up until 2008. Cutting this link to gold was cutting the external anchor impeding war and deficit spending. The promise of gold for dollars was revoked.
GDP in the US increased after 1974 but a portion of end use buying power was transferred to Saudi Arabia. They were supplying the net energy gain that was powering the US GDP increase. The working class in the US began to experience a slow real decline in living standards, as 'their share' of the economic pie was squeezed by the ever increasing transfer of buying power to Saudi Arabia.
The US banking and government elite responded by creating and cutting back legal and behavioral rules of a fiat based monetary system. The Chinese appreciated the long term opportunity that this presented and agreed to play ball. The USA over-produced credit money and China over-produced manufactured goods which cushioned the real decline in the buying power of America's working class. Power relations between China and the US began to change: The Communist Party transferred value to the American consumer whilst Wall Street transferred most of the US industrial base to China. They didn't ship the military industrial complex.
Large scale leverage meant that US consumers and businesses had the means to purchase increasingly with debt so the class war was deferred. This is how over production occurs: more is produced that is paid for not with money that represents actual realized labour time, but from future wealth, to be realised from future labour time. The Chinese labour force was producing more than it consumed.
The system has never differed from the limits laid down by the Laws of Thermodynamics. The Real economy system can never over-produce per se. The limit of production is absolute net energy gain. What is produced can be consumed. How did the Chinese produce such a super massive excess and for so long? Economic slavery can achieve radical improvements in living standards for those that benefit from ownership. Slaves don't depreciate as they are rented and are not repaired for they replicate for free. Hundreds of millions of Chinese peasants limited their way of life and controlled their consumption in order to benefit their children. And their exploited life raised the rate of profit!
They began their long march to modern prosperity making toys, shoes, and textiles cheaper than poor women could in South Carolina or Honduras. Such factories are cheap to build and deferential, obedient and industrious peasant staff were a perfect match for work that was not dissimilar to tossing fruit into a bucket. Their legacy is the initial capital formation of modern China and one of the greatest accomplishments in human history. The Chinese didn't use net energy gain from oil to power their super massive and sustained increase in production. They used economic slavery powered by caloric energy, exchanged from solar energy. The Chinese labour force picked the World's low hanging fruit that didn't need many tools or machines. Slaves don't need tools for they are the tool.
Without a gold standard and capital ratios our form of over-production has grown enormously. The dotcom bubble was reflated through a housing bubble, which has been pumped up again by sovereign debt, printing press (QE) and central bank insolvency. The US working and middle classes have over-consumed relative to their share of the global economic pie for decades. The correction to prices (the destruction of credit money & accumulated capital) is still yet to happen. This is what has been happening since 1971 because of the growth of financialisation or monetisation.
The application of all these economic methods was justified by the political ideology of neo-Liberalism. Neo-Liberalism entails no or few capital controls, the destruction of trade unions, plundering state and public assets, importing peasants as domesticated help, and entrusting society's value added production to The Communist Party of The People's Republic of China.
The Chinese have many motives but their first motivation is power. Power is more important than money. If you're rich and weak you get robbed. Russia provides illustrating stories of such: Gorbachev had received a promise from George HW Bush that the US would pay Russia approximately $400 billion over10 years as a "peace dividend" and as a tool to be utilized in the conversion of their state run to a market based economic system. The Russians believe the head of the CIA at the time, George Tenet, essentially killed the deal based on the idea that "letting the country fall apart will destroy Russia as a future military threat". The country fell apart in 1992. Its natural assets were plundered which raised the rate of profit in the 90's until President Putin put a stop to the robbery.
In the last analysis, the current framework of Capitalism results in labour redundancy, a falling rate of profit and ingrained trading imbalances caused by excess capacity. Under our current monopoly state capitalism a number of temporary preventive measures have evolved, including the expansion of university, military, and prison systems to warehouse new generations of labour.
Our problem is how to retain the "expected return rate" for us, the dominant class. Ultimately, there are only two large-scale solutions, which are intertwined .
One is expansion of state debt to keep "the markets" moving and transfer wealth from future generations of labour to the present dominant class.
The other is war, the consumer of last resort. Wars can burn up excess capacity, shift global markets, generate monopoly rents, and return future labour to a state of helplessness and reduced expectations. The Spanish flu killed 50-100 million people in 1918. As if this was not enough, it also took two World Wars across the 20th century and some 96 million dead to reduce unemployment and stabilize the "labour problem."
Capitalism requires World War because Capitalism requires profit and cannot afford the unemployed . The point is capitalism could afford social democracy after the rate of profit was restored thanks to the depression of the 1930's and the physical destruction of capital during WW2. Capitalism only produces for profit and social democracy was funded by taxing profits after WW2.
Post WW2 growth in labour productivity, due to automation, itself due to oil & gas replacing coal, meant workers could be better off. As the economic pie was growing, workers could receive the same %, and still receive a bigger slice. Wages as a % of US GDP actually increased in the period, 1945-1970. There was an increase in government spending which was being redirected in the form of redistributed incomes. Inequality will only worsen, because to make profits now we have to continually cut the cost of inputs, i.e. wages & benefits. Have we not already reached the point where large numbers of the working class can neither feed themselves nor afford a roof over their heads?13% of the UK working age population is out of work and receiving out of work benefits. A huge fraction is receiving in work benefits because low skill work now pays so little.
The underlying nature of Capitalism is cyclical. Here is how the political aspect of the cycle ends:
- 1920s/2000s – High inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase
- 1929/2008 – Wall Street crash
- 1930s/2010s – Global recession, currency wars, trade wars, rising unemployment, nationalism and extremism
- What comes next? – World War.
If Capitalism could speak, she would ask her older brother, Imperialism, this: "Can you solve the problem?" We are not reliving the 1930's, the economy is now an integrated whole that encompasses the entire World. Capital has been accumulating since 1945, so under- and unemployment is a plague everywhere. How big is the problem? Official data tells us nothing, but the 47 million Americans on food aid are suggestive. That's 1 in 7 Americans and total World population is 7 billion.
The scale of the solution is dangerous. Our probing for weakness in the South China Sea, Ukraine and Syria has awakened them to their danger.The Chinese and Russian leadershave reacted by integrating their payment systems and real economies, trading energy for manufactured goods for advanced weapon systems. As they are central players in the Shanghai Group we can assume their aim is the monetary system which is the bedrock of our Imperial power. What's worse, they can avoid overt enemy action and simply choose to undermine "confidence" in the FIAT.
Though given the calibre of their nuclear arsenal, how can they be fought let alone defeated? Appetite preceded Reason, so Lust is hard to Reason with. But beware brother. Your Lust for Power began this saga, perhaps it's time to Reason.Uncle SugarFather Thyme
Seriously - Having a Central Bank with a debt based monetary system requires permanent wars. True market based capitalism does not.Wed, 03/02/2016 - 23:21 | 7264475 Seek_Truth
Your logical fallacy is no true scotsman
Those who live in glass houses shouldn't throw stones.
If wealth were measured by creating strawmen- you would be a Rothschild.Wed, 03/02/2016 - 23:27 | 7264485 GRDguy
That's because they don't understand the word "capitalism."
Capitalism simply means economic freedom. And economic freedom, just like freedom to breed, must be exposed to the pruning action of cause and effect, otherwise it outgrows its container and becomes unstable and explodes. As long as it is continually exposed to the grinding wheel of causality, it continues to hold a fine edge, as the dross is scraped away and the fine steel stays. Reality is full of dualities, and those dualities cannot be separated without creating broken symmetry and therefore terminal instability. Freedom and responsibility, for example. One without the other is unstable. Voting and taxation in direct proportion to each other is another example.
Fiat currency is an attempt to create an artificial reality, one without the necessary symmetry and balance of a real system. However, reality can not be gamed, because it will produce its own symmetry if you try to deny it. Thus the symmetry of fiat currency is boom and bust, a sine wave that still manages to produce equilibrium, however at a huge bubbling splattering boil rather than a fine simmer.
The folks that wrote this do not have a large enough world view. Capitalism does not require world wars because freedom does not require world wars. Freedom tends to bleed imbalances out when they are small. On the other hand, empire does require world war, which is why we are going to have one.AchtungAffen
Capitalism becomes imperialism when financial sociopaths steal profits from both sides of the trade. What you're seeing is an Imperialism of Capital, as explained very nicely in the 1889 book "The Great Red Dragon."Caviar Emptor
Really? I thought that was the re-prints of Mises Canada, Kunstler or Brandon Smith. In comparison, this article is sublime.Wed, 03/02/2016 - 22:56 | 7264423 Jack's Raging B...
Wrong. Capitalism needs prolonged directionless wars without clear winners and contained destruction that utilize massive amounts of raw materials and endless orders for weapons and logistical support. That's what makes some guys rich.My Days Are Get...
That's was a very long-winded and deliberately obtuse way of explaining how DEBT AS MONEY and The State's usurpation of sound money destroyed efficient markets. The author then goes to call this system Capitalism.
So yeah, the deliberate destruction of capital, in all its forms, is somehow capitalism. Brilliant observation. Fuck you. There are better terms for things like this. Perhaps....central banking? The State? Fiat debt creation? Evil? Naw, let's just contort and abuse language instead. That's the ticket.slimycorporated...
From Russia News Feed:
Cathal Haughian Bio :
I've spent my adult life in 51 countries. This was financed by correctly anticipating the Great Financial Crisis in 2008. I was studying Marx at that time. I'm presently an employee of the Chinese State. I educate the children of China's best families. I am the author, alongside a large international team of capitalists, of Before The Collapse : The Philosophy of Capitalism.
I also have my own business; I live with my girlfriend and was born and grew up in Ireland.
Why would anyone waste time to read this drivel, buttressed by the author's credentials.
The unstated thesis is that wars involve millions of actors, who produce an end-result of many hundreds of millions killed.
Absent coercion ("the Draft"), how is any government going to man hundreds of divisions of foot soldiers. That concept is passé.
Distribute some aerosol poisons via drones and kill as many people as deemed necessary. How in the hell will that action stimulate the world economy.
Weapons of mass-destruction are smaller, cheaper and easier to deploy. War as a progenitor of growth - forget it.
The good news is that this guy is educating the children of elite in China. Possibly the Pentagon could clone him 10,000 times and send those cyborgs to China - cripple China for another generation or two.Ms No
Capitalism requires banks that made shitty loans to failo r c k
The term cyclical doesn't quite cover what we have being experiencing. It's more like a ragdoll being shaken by a white shark. The euphoria of bubble is more like complete unhinged unicorn mania anymore and the lows are complete grapes of wrath. It's probably always been that way to some extent because corruption has remained unchallenged for a great deal of time. The boom phases are scarier than the downturns anymore, especially the last oil boom and housing boom. Complete Alfred Hitchcock stuff.
I don't think it's capitalism and that term comes across as an explanation that legitimizes this completely contrived pattern that benefits a few and screws everybody else. Markets should not be behaving in such a violent fashion. Money should probably be made steady and slow. And downturns shouldn't turn a country into Zimbabwe. I could be wrong but there is really no way to know with the corruption we have.
And War requires that an enemy be created. According to American General Breedlove-head of NATO's European Command-speaking to the US Armed Services Committee 2 days ago, "Russia and Assad are deliberately weaponizing migration to break European resolve". "The only reason to use non-precision weapons like barrel bombs is to keep refugees on the move". "These refugees bring criminality, foreign fighters and terrorism", and "are being used to overwhelm European structures". "Russia has chosen to be an adversary and is a real threat." "Russia is irresponsible with nuclear weapons-always threatening to use them." And strangely, "In the past week alone, Russia has made 450 attacks along the front lines in E. Ukraine".
Even with insanity overflowing the West, I found these comments to be the most bizarrely threatening propaganda yet. After reading them for the first time, I had to prove to myself that I wasn't hallucinating it.
Sep 27, 2016 | discussion.theguardian.comDante5 1d agoThe US grand strategy post-Bush was to reposition itself at the heart of a liberal economic system excluding China through TTIP with the EU and TPP with Asia-Pac ex. China and Russia. The idea was that this would enable the US to sustain its hegemony.
It has been an absolute failure. Brexit has torpedoed TTIP and TPP has limited value - the largest economy in the partnership, Japan, has been largely integrated in to the US for the past 70 years.
IMO the biggest failure of the US has been hating Russia too much. The Russians have just as much reason to be afraid of China as the US do and have a pretty capable army.
If the US patched things up with the Russians, firstly it could redeploy forces and military effort away from the Middle East towards Asia Pac and secondly it would give the US effective leverage over China -- with the majority of the oil producing nations aligned with the US, China would have difficulty in conducted a sustained conflict.
It's old Cold War thinking that has seen America lose its hegemony -- similar to how the British were so focused on stopping German ascendancy they didn't see the Americans coming with the knife.
Jul 20, 2015 | economistsview.typepad.comJuly 20, 2015anne :anne -> anne :
No one disputes the need for more official infrastructure funding :
What we find the most interesting is that the AIIB founders didn't ask member countries to approve an expansion of either the World Bank or the ADB. Instead, they opted for a new organization altogether.
Why? The problem is institutional legitimacy arising from issues of power and governance :
-- Cecchetti & Schoenholtz
[ Why? Because when all is said and done the United States wants to be able to control the Asian Development Bank, the IMF and World Bank and use them to in turn "control" countries that it wishes to be subject to the US but especially to control China as the New York Times editorial board made clear today in supporting Japanese militarism. *
* http://www.nytimes.com/2015/07/20/opinion/japan-wrestles-with-its-pacifism.html ]mulp -> anne :
No one disputes the need for more official infrastructure funding :
-- Cecchetti & Schoenholtz
[ Unless the word "official" suffices as an excuse, of course United States and British policy makers in particular dispute the need for more government supported infrastructure funding. Amartya Sen and Vijay Prashad have made this entirely clear for India. *
* http://www.nytimes.com/2013/06/20/opinion/why-india-trails-china.html ]anne -> mulp :
The real problem is the Chinese do not believe in economic profits, just market rates of return on invested capital which to be honest is only about 2-5% depending on risk.
Americans demand monopoly profits and ROIC so high that the price of capital assets rapidly inflates.
Thus China's high speed rail plans are evil because China is advocating high volumes of HSR construction that costs decline by economies of scale leading to the replacement cost of any existing rail line being lower than original cost so the result is capital depreciation lower the price of assets, tangible and intangible, and the frantic pace of creating jobs and building more capital - more rail - eliminates any monopoly power of any rail system, thereby forcing revenues down to costs with the recovery of investment cost stretched to decades, and ROIC forced toward zero.
And it's that policy of investing to eliminate profits that drives conservatives insane. They scream, "it is bankrupt because those hundred year lifetime assets are not paying for themselves and generating stock market gains in seven years!"
Its like banking was from circa 1930 to 1980! It is like utility regulation was from 1930 to 1980! How can wealth be created when monopoly power is thwarted?!?
Just imagine how devastating if China uses the AIIB to build a rail network speeding goods between China and the tip of Africa and every place in between! Highly destructive of wealth.anne -> mulp :
Interesting argument that I will carefully think through and argue with in turn. Nice, nice comment.anne -> mulp :
Terrific comment, which should be further developed; I am thinking.anne :
Though I want to smooth the writing and terminology, I completely agree. Again, a terrific thoroughly enlightening comment. ]anne -> anne :
And :after failing to stop the AIIB, and refusing to participate as a founding member, the United States should join the institution as soon as it can, participating actively in holding it to the highest 21st century standards :.
-- Cecchetti & Schoenholtz
[ Surely the IMF and the like are responsible for the "explosive" 38 year growth in real per capita Gross Domestic Product and 35 year growth in total factor productivity from Mexico, neighbor to the United States, to the Philippines, to Kenya : ]anne -> anne :
August 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil and South Africa, 1976-2014
August 4, 2014
Real per capita Gross Domestic Product for China, India, Brazil and South Africa, 1976-2014
(Indexed to 1976)anne -> anne :
November 1, 2014
Total Factor Productivity at Constant National Prices for China, India, Brazil and South Africa, 1976-2011
November 1, 2014
Total Factor Productivity at Constant National Prices for China, India, Brazil and South Africa, 1976-2011
(Indexed to 1976)anne :
Even supposing analysts short of an Amartya Sen wish to be judicious in actually looking to the data of the last 38 years, as even Sen has found there is a price for arguing about the obvious importance of soft (social welfare spending) and hard institutional infrastructure spending in China:
August 4, 2014
Real per capita Gross Domestic Product for China and Mexico, 1976-2014
(Indexed to 1976)
August 4, 2014
Real per capita Gross Domestic Product for China and Philippines, 1976-2014
(Indexed to 1976)
August 4, 2014
Real per capita Gross Domestic Product for China and Kenya, 1976-2014
(Indexed to 1976)anne :
And :after failing to stop the AIIB, and refusing to participate as a founding member, the United States should join the institution as soon as it can, participating actively in holding it to the highest 21st century standards :.
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for China, United States and
United Kingdom, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for China,
United States and United Kingdom, 1976-2011
(Indexed to 1976)anne :
No one disputes the need for more official infrastructure funding :
And :after failing to stop the AIIB, and refusing to participate as a founding member, the United States should join the institution as soon as it can, participating actively in holding it to the highest 21st century standards :.
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for United States, United
Kingdom, France, Netherlands, Germany and China, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for United
States, United Kingdom, France, Netherlands, Germany and China,
(Indexed to 1976)anne :
No one disputes the need for more official infrastructure funding :
What we find the most interesting is that the AIIB founders didn't ask member countries to approve an expansion of either the World Bank or the ADB. Instead, they opted for a new organization altogether.
Why? The problem is institutional legitimacy arising from issues of power and governance :
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for China, Korea, Hong Kong and Singapore, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for China,
Korea, Hong Kong and Singapore, 1976-2011
(Indexed to 1976)anne :
No one disputes the need for more official infrastructure funding :
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for Sweden, Denmark, Norway,
Finland and China, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for Sweden,
Denmark, Norway, Finland and China, 1976-2011
(Indexed to 1976)anne :
No one disputes the need for more official infrastructure funding :
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for Ireland, Portugal, Spain,
Italy, Greece and China, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for Ireland,
Portugal, Spain, Italy, Greece and China, 1976-2011
(Indexed to 1976)kthomas :
No one disputes the need for more official infrastructure funding :
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for China, Japan and Korea, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for China, Japan and Korea, 1976-2011
(Indexed to 1976)anne :
[ When did the United States experience 38 years of 8.6% real per capita GDP growth yearly? How about the United Kingdom? How about any other country? I have just begun, go ahead choose another country to go with China. I am waiting. Go ahead. I will include the astonishing total factor productivity growth as well. ]anne :
While most of the G20 nations, including the big European states, Australia, and South Korea, are among the founding members, the United States, Japan, and Canada are noticeably not :
-- Cecchetti & Schoenholtz
[ I found it startling and discouraging that Greece virtually alone in Europe did not apply to be a founding member of the AIIB. ]anne -> anne :
No one disputes the need for more official infrastructure funding :
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for China, United Kingdom,
Australia and Canada, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for China,
United Kingdom, Australia and Canada, 1976-2011
(Indexed to 1976)anne -> anne :
[ I am still waiting, choose a country to go with China. ]anne -> anne :
No one disputes the need for more official infrastructure funding :
-- Cecchetti & Schoenholtz
August 4, 2014
Real per capita Gross Domestic Product for Indonesia, Philippines, Thailand and China, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for Indonesia, Philippines, Thailand and China, 1976-2011
(Indexed to 1976)Bruce Webb :
[ Still waiting, choose a country to go with China. ]anne -> Bruce Webb :
As to why the AIIB decided to go alone (at least without the US) it may have something to do with a fact that I stumbled on in relation to the Greece crisis. I am sure that most people here knew the basic fact and perhaps appreciate the irony but I didn't know whether to weep or laugh outright.
The U.S. only controls 17% of voting powers of the IMF. Why barely a sixth! Yet any positive decision requires an 85% vote. Meaning that in operational terms the U.S. might as well hold 51%.
You see similar things with NATO. It's a partnership that has high officers rotating in from here or there. But which requires that the overall NATO Commander be an American.
Nothing undemocratic or hegemonic here! Nope! Moving right along!anne -> Bruce Webb :
The U.S. only controls 17% of voting powers of the IMF. Why barely a sixth! Yet any positive decision requires an 85% vote. Meaning that in operational terms the U.S. might as well hold 51%.
You see similar things with NATO. It's a partnership that has high officers rotating in from here or there. But which requires that the overall NATO Commander be an American.
Nothing undemocratic or hegemonic here! Nope! Moving right along!
[ Perfect and important. ]anne :
I am sure that most people here knew the basic fact and perhaps appreciate the irony but I didn't know whether to weep or laugh outright :.
[ No, in continually whining about the need for Asian Infrastructure Investment Bank to be transparent and democratic the United States was making sure never ever to explain the historic lack of transparency and anti-democratic nature of the IMF and World Bank and Asian Development Bank. ]anne :
August 4, 2014
Real per capita Gross Domestic Product for Brazil, Argentina, Chile
and China, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for Brazil,
Argentina, Chile and China, 1976-2011
(Indexed to 1976)
August 4, 2014
Real per capita Gross Domestic Product for China, India and Turkey, 1976-2014
(Indexed to 1976)
November 1, 2014
Total Factor Productivity at Constant National Prices for China, India and Turkey, 1976-2011
(Indexed to 1976)
Sep 26, 2016 | www.nakedcapitalism.com
Bill Clinton: "The geopolitical reasons for [TPP], from America's point of view, are pretty clear. It's designed to make sure that the future of the Asia-Pacific region, economically, is not totally dominated by China" [ CNBC ].
"However, he stopped short [by about an inch, right?] of supporting the TPP. He added that his wife [who is running for President' has said provisions on currency manipulation must be enforced and measures put in place in the United States to address any labor market dislocations that result from trade deals." Oh. "Provisions enforced" sounds like executive authority, to me. And "measures put in place" sounds like a side deal. In other words, Bill Clinton just floated Hillary's trial balloon for passing TPP, if Obama can't get it done in the lame duck. Of course, if you parsed her words, you knew she wasn't lying , exactly .
" The full 40-page paper (PDF) [from the Global Development And Environment Institute at Tufts University] goes into the details [of projected economic gains from trade deals]. Along the way, it provides a highly critical analysis of the underlying econometric model used for almost all of the official studies of CETA, TPP and TTIP - the so-called "computable general equilibrium" (CGE) approach. In particular, the authors find that using the CGE model to analyze a potential trade deal effectively guarantees that there will be a positive outcome ("net welfare gains") because of its unrealistic assumptions" [ TechDirt ].
"Conservative lawmakers looking for a way to buck Donald Trump's populist message on trade may have gotten a little more cover with more than 30 conservative and libertarian groups sending a letter today to Congress expressing strong support for free trade" [ Politico ]. National Taxpayers Union, Club for Growth, FreedomWorks
"France is set to arrive at the meeting with a proposal to suspend TTIP negotiations, our Pro Trade colleagues in Brussels report. But for the deal's supporters, there's hop'e: 'France will not win the day,' Alberto Mucci, Christian Oliver and Hans von der Burchard write. 'Britain [???], Italy, Spain, Poland, the Nordic countries and the Baltics will thwart any attempt to end the Transatlantic Trade and Investment Partnership in Bratislava'" [ Politico ].
Aug 25, 2016 | www.commondreams.orgNobel Prize-winning economist Joseph Stiglitz has reiterated his opposition to the Trans Pacific Partnership (TPP), saying on Tuesday that President Barack Obama's push to get the trade deal passed during the upcoming lame-duck session of Congress is "outrageous" and "absolutely wrong."
Stiglitz, an economics professor at Columbia University and chief economist of the Roosevelt Institute, made the comments on CNN's "Quest Means Business."
His criticism comes as Obama aggressively campaigns to get lawmakers to pass the TPP in the Nov. 9 to Jan. 3 window-even as resistance mounts against the 12-nation deal.
Echoing an argument made by Center for Economic and Policy Research co-director Mark Weisbrot, Stiglitz said, "At the lame-duck session you have congressmen voting who know that they're not accountable anymore."
Lawmakers "who are not politically accountable because they're leaving may, in response to promises of jobs or just subtle understandings, do things that are not in the national interest," he said.
Expressing his overall objections to the TPP, Stiglitz said "corporate interests... were at the table" when it was being crafted. He also condemned "the provisions on intellectual property that will drive up drug prices" and "the 'investment provisions' which will make it more difficult to regulate and actually harm trade."
"The advocates of trade said it was going to benefit everyone," he added. "The evidence is it's benefited a few and left a lot behind."
Stiglitz has previously spoken out against the TPP before, arguing that it "may turn out to be the worst trade agreement in decades;" that it would mean "if you pass a regulation that restricts ability to pollute or does something about climate change, you could be sued and could pay billions of dollars;" and previously said that the president's TPP push "is one of Obama's biggest mistakes."
Stiglitz has also been advising the Hillary Clinton presidential campaign. The Democratic candidate, for her part, supported the deal before coming out against it, but for TPP foes, uncertainty about her position remains, especially since she recently named former Colorado Senator and Interior Secretary-and "vehement advocate for the TPP"-Ken Salazar to be chair of her presidential transition team.
Opposition to the TPP also appeared Tuesday in Michigan and Florida, where union members and lawmakers criticized what they foresee as the deal's impacts on working families.
Rep. Debbie Dingell (D-Mich.) said, "We have to make sure that bill never sees the light of day after this election," while Rep. Alan Grayson (D-Fla.) said at the American Postal Workers Union convention in Walt Disney World, "If this goes through, it's curtains for the middle class in this country."
Aug 01, 2016 | www.votetulsi.com
We cannot allow this agreement to forsake the American middle class, while foreign governments are allowed to devalue their currency and artificially prop-up their industries.
The Trans-Pacific Partnership trade deal is a bad deal for the American people. This historically massive trade deal -- accounting for 40 percent of global trade -- would reduce restrictions on foreign corporations operating within the U.S., limit our ability to protect our environment, and create more incentives for U.S. businesses to outsource investments and jobs overseas to countries with lower labor costs and standards.
Over and over we hear from TPP proponents how the TPP will boost our economy, help American workers, and set the standards for global trade. The International Trade Commission report released last May (https://www.usitc.gov/publications/332/pub4607.pdf) confirms that the opposite is true. In exchange for just 0.15 percent boost in GDP by 2032, the TPP would decimate American manufacturing capacity, increase our trade deficit, ship American jobs overseas, and result in losses to 16 of the 25 U.S. economic sectors. These estimates don't even account for the damaging effects of currency manipulation, environmental impacts, and the agreement's deeply flawed Investor State Dispute Settlement (ISDS) process.
There's no reason to believe the provisions of this deal relating to labor standards, preserving American jobs, or protecting our environment, will be enforceable. Every trade agreement negotiated in the past claimed to have strong enforceable provisions to protect American jobs -- yet no such enforcement has occurred, and agreements like the North American Free Trade Agreement (NAFTA) have resulted in the loss of hundreds of thousands of American jobs. Former Secretary of Labor Robert Reich has called TPP "NAFTA on steroids." The loss of U.S. jobs under the TPP would likely be unprecedented.https://www.youtube.com/watch?v=_fC0qppnK_U
Watch: Tulsi restates the need for transparency in the Trans-Pacific Partnership (TPP) on the House floor.
Sep 03, 2016 | Back to (our) Future
BuzzFeed is running a very important investigative series called "Secrets of a Global Super Court." It describes what they call "a parallel legal universe, open only to corporations and largely invisible to everyone else."
Existing "trade" agreements like NAFTA allow corporations to sue governments for passing laws and regulations that limit their profits. They set up special "corporate courts" in which corporate attorneys decide the cases. These corporate "super courts" sit above governments and their own court systems, and countries and their citizens cannot even appeal the rulings.
The 2014 post "Corporate Courts - A Big Red Flag On "Trade" Agreements" explained the origin and rationale for these corporate courts:
Picture a poor "banana republic" country ruled by a dictator and his cronies. A company might want to invest in a factory or railroad - things that would help the people of that country as well as deliver a return to the company. But the company worries that the dictator might decide to just seize the factory and give it to his brother-in-law. Agreements to protect investors, and allowing a tribunal not based in such countries (courts where the judges are cronies of the dictator), make sense in such situations.
Here's the thing: Corporate investors see themselves as legitimate "makers" and see citizens and voters and their governments - always demanding taxes and fair pay and public safety - to be illegitimate "takers." Corporations are all about "one-dollar-one-vote" top-down systems of governance. They consider "one-person-one-vote" democracy to be an illegitimate, non-functional system that meddles with their more-important profit interests. They consider any governmental legal or regulatory system to be "burdensome." They consider taxes as "theft" of the money they have "earned."
To them, any government anywhere is just another "banana republic" from which they need special protection.
"Trade" Deals Bypass Borders
Investors and their corporations have set up a way to get around the borders of these meddling governments, called "trade" deals. The trade deals elevate global corporate interests above any national interest. When a country signs a "trade" deal, that country is agreeing not to do things that protect the country's own national interest - like impose tariffs to protect key industries or national strategies, or pass laws and regulations - when those things interfere with the larger, more important global corporate "trade" interests.
Now, corporations are pushing two new "trade" agreements - one covering Pacific-are countries and one covering Atlantic-area countries - that expand these corporate rights and move governments out of their way. The Pacific agreement is called the Trans-Pacific Partnership (TPP) and the Atlantic one is called the Trans-Atlantic Trade and Investment Partnership (TTIP).
Secrets of a Global Super Court
BuzzFeed's series on these corporate courts, "Secrets of a Global Super Court," explains the investor-state dispute settlement (ISDS) provisions in the "trade" deals that have come to dominate the world economy. These provisions set up "corporate courts" that place corporate profits above the interests of governments and set up a court system that sits above the court systems of the countries in the "trade" deals.
Part One, "Inside The Global "Club" That Helps Executives Escape Their Crimes," describes, "A parallel legal universe, open only to corporations and largely invisible to everyone else, helps executives convicted of crimes escape punishment."
In a little-noticed 2014 dissent, US Chief Justice John Roberts warned that ISDS arbitration panels hold the alarming power to review a nation's laws and "effectively annul the authoritative acts of its legislature, executive, and judiciary." ISDS arbitrators, he continued, "can meet literally anywhere in the world" and "sit in judgment" on a nation's "sovereign acts."
[. . .]
Reviewing publicly available information for about 300 claims filed during the past five years, BuzzFeed News found more than 35 cases in which the company or executive seeking protection in ISDS was accused of criminal activity, including money laundering, embezzlement, stock manipulation, bribery, war profiteering, and fraud.
Among them: a bank in Cyprus that the US government accused of financing terrorism and organized crime, an oil company executive accused of embezzling millions from the impoverished African nation of Burundi, and the Russian oligarch known as "the Kremlin's banker."
One lawyer who regularly represents governments said he's seen evidence of corporate criminality that he "couldn't believe." Speaking on the condition that he not be named because he's currently handling ISDS cases, he said, "You have a lot of scuzzy sort-of thieves for whom this is a way to hit the jackpot."
Part Two, "The Billion-Dollar Ultimatum," looks at how "International corporations that want to intimidate countries have access to a private legal system designed just for them. And to unlock its power, sometimes all it takes is a threat."
Of all the ways in which ISDS is used, the most deeply hidden are the threats, uttered in private meetings or ominous letters, that invoke those courts. The threats are so powerful they often eliminate the need to actually bring a lawsuit. Just the knowledge that it could happen is enough.
[. . .] ISDS is so tilted and unpredictable, and the fines the arbitrators can impose are so catastrophically large, that bowing to a company's demands, however extreme they may be, can look like the prudent choice. Especially for nations struggling to emerge from corrupt dictatorships or to lift their people from decades of poverty, the mere threat of an ISDS claim triggers alarm. A single decision by a panel of three unaccountable, private lawyers, meeting in a conference room on some other continent, could gut national budgets and shake economies to the core.
Part Three, "To Bankers, It's Not Just A Court System, It's A Gold Mine," exposes how "Financial companies have figured out how to turn a controversial global legal system to their own very profitable advantage."
Indeed, financiers and ISDS lawyers have created a whole new business: prowling for ways to sue nations in ISDS and make their taxpayers fork over huge sums, sometimes in retribution for enforcing basic laws or regulations.
The financial industry is pushing novel ISDS claims that countries never could have anticipated - claims that, in some instances, would be barred in US courts and those of other developed nations, or that strike at emergency decisions nations make to cope with crises.
ISDS gives particular leverage to traders and speculators who chase outsize profits in the developing world. They can buy into local disputes that they have no connection to, then turn the disputes into costly international showdowns. Standard Chartered, for example, bought the debt of a Tanzanian company that was in dire financial straits and racked by scandal; now, the bank has filed an ISDS claim demanding that the nation's taxpayers hand over the full amount that the private company owed - more than $100 million. Asked to comment, Standard Chartered said its claim is "valid."
David Dayen explains this last point, in "The Big Problem With The Trans-Pacific Partnership's Super Court That We're Not Talking About": "Financiers will use it to bet on lawsuits, while taxpayers foot the bill."
But instead of helping companies resolve legitimate disputes over seized assets, ISDS has increasingly become a way for rich investors to make money by speculating on lawsuits, winning huge awards and forcing taxpayers to foot the bill.
Here's how it works: Wealthy financiers with idle cash have purchased companies that are well placed to bring an ISDS claim, seemingly for the sole purpose of using that claim to make a buck. Sometimes, they set up shell corporations to create the plaintiffs to bring ISDS cases. And some hedge funds and private equity firms bankroll ISDS cases as third parties - just like billionaire Peter Thiel bankrolled Hulk Hogan in his lawsuit against Gawker Media.
Part Four of the great BuzzFeed series, "Secrets of a Global Super Court," is expected to be published later this week.
The Progressive Change Campaign Committee (PCCC) released this statement on the ISDS provisions in TPP:
"Under the Trans-Pacific Partnership, Wall Street would be allowed to sue the government in extrajudicial, corporate-run tribunals over any regulation and American taxpayers would be on the hook for damages. This is an outrage. We need more accountability and fairness in our economy – not less. And we need to preserve our ability to make our own rules.
"It's time for Obama to take notice of the widespread, bipartisan opposition to the TPP and take this agreement off the table before he causes lasting political harm to Democrats with voters."
Sep 01, 2016 | www.nakedcapitalism.com
Joe Hunter , August 31, 2016 at 2:52 pmclarky90 , August 31, 2016 at 4:01 pm
A response to Hillary Clinton's America Exceptionalist Speech:
1. America Exceptionalist vs. the World..
2. Brezinski is extremely dejected.
3. Russia-China on the march.
4. "There will be blood. Hillary Clinton smells it already ."MyLessThanPrimeBeef , August 31, 2016 at 4:18 pm
"No TPP - a certainty in case Donald Trump is elected in November - means the end of US economic hegemony over Asia. Hillary Clinton knows it; and it's no accident President Obama is desperate to have TPP approved during a short window of opportunity, the lame-duck session of Congress from November 9 to January 3."
To me, the key to our economic hegemony lies in our reserve currency hegemony. They will have to continue to supply us to get the currency. Unless we have injected too much already (no scholars have come forth to say how much trade deficits are necessary for the reserve currency to function as the reserve currency, and so, we have just kept buying – and I am wondering if we have bought too much and there is a need to starting running trade surpluses to soak up the excess money – just asking, I don't know the answer).
Aug 27, 2016 | www.nakedcapitalism.comL , August 26, 2016 at 2:44 pmflora , August 26, 2016 at 2:51 pm
Regarding the push to pass the TPP and TISA I've been needing to get this off my chest and this seems to be as good a time as any:
In the face of public opposition to the TPP and TISA proponents have trotted out a new argument: "we have come too far", "our national credibility would be damaged if we stop now." The premise of which is that negotiations have been going on so long, and have involved such effort that if the U.S. were to back away now we would look bad and would lose significant political capital.
On one level this argument is true. The negotiations have been long, and many promises were made by the negotiators to secure to to this point. Stepping back now would expose those promises as false and would make that decade of effort a loss. It would also expose the politicians who pushed for it in the face of public oppoosition to further loss of status and to further opposition.
However, all of that is voided by one simple fact. The negotiations were secret. All of that effort, all of the horse trading and the promise making was done by a self-selected body of elites, for that same body, and was hidden behind a wall of secrecy stronger than that afforded to new weapons. The deals were hidden not just from the general public, not from trade unions or environmental groups, but from the U.S. Congress itself.
Therefore it has no public legitimacy. The promises made are not "our" promises but Michael Froman's promises. They are not backed by the full faith and credit of the U.S. government but only by the words of a small body of appointees and the multinational corporations that they serve. The corporations were invited to the table, Congress was not.
What "elites" really mean when they say "America's credibility is on the line" is that their credibility is on the line. If these deals fail what will be lost is not America's stature but the premise that a handful of appointees can cut deals in private and that the rest of us will make good.
When that minor loss is laid against the far greater fact that the terms of these deals are bad, that prior deals of this type have harmed our real economies, and that the rules will further erode our national sovreignity, there is no contest.
Michael Froman's reputation has no value. Our sovreignity, our economy, our nation, does.grizziz , August 26, 2016 at 2:52 pm
+1Lambert Strether Post author , August 26, 2016 at 2:57 pm
Thank you for your comment. +1ambrit , August 26, 2016 at 6:45 pm
"We've gone too far."
Whaddaya mean, "we"?Jim Haygood , August 26, 2016 at 6:53 pm
The imperial "We."
I just had a soul corroding vision of H Clinton done up as Victoria Regina. Ouch!!! Go get the butter!JohnnyGL , August 26, 2016 at 3:01 pm
In modern parlance, she's Victoria Rejayjay. :-0abynormal , August 26, 2016 at 3:10 pm
Good comment .
"What "elites" really mean when they say "America's credibility is on the line" is that their credibility is on the line. If these deals fail what will be lost is not America's stature but the premise that a handful of appointees can cut deals in private and that the rest of us will make good."
Yes! And the victory will taste so sweet when we bury this filthy, rotten, piece of garbage. Obama's years of effort down the drain, his legacy tarnished and unfinished.
I want TPP's defeat to send a clear message that the elites can't count on their politicians to deliver for them. Let's make this thing their Stalingrad! Leave deep scars so that they give up on TISA and stop trying to concoct these absurd schemes like ISDS.OpenThePodBayDoorsHAL , August 26, 2016 at 4:13 pm
sorry but i don't see it that way at all. 'they' got a propaganda machine to beat all 'they' make n break reps all the time. i do see a desperation on a monetary/profit scale. widening the 'playing field' offers more profits with less risk. for instance, our Pharams won't have to slash their prices at the risk of sunshine laws, wish-washy politicians, competition, nor a pissed off public. jmo tho')Synoia , August 26, 2016 at 4:57 pm
LOL "America's credibility" LOL, these people need to get out more. In the 60's you could hike high up into the Andes and the sheep herder had two pics on the wall of his hut: Jesus and JFK. America retains its cachet as a place to make money and be entertained, but as some kind of beacon of morality and fair play in the world? Dead, buried, and long gone, the hype-fest of slogans and taglines can only cover up so many massive, atrocious and hypocritical actions and serial offenses.NotTimothyGeithner , August 26, 2016 at 6:11 pm
his legacy tarnished and unfinished.
And his post-presidential money small .John Wright , August 26, 2016 at 6:15 pm
Clinton Inc was mostly Bill helping Epstein get laid until after Kerry lost. If this was the reelection of John Edwards, Kerry's running mate, and a referendum on 12 years of Kerronomics, Bill and Hill would be opening night speakers at the DNC and answers to trivia questions.
My guess is Obama is dropped swiftly and unceremoniously especially since he doesn't have much of a presence in Washington.polecat , August 26, 2016 at 7:14 pm
The must preserve American credibility argument on the line again.
Here is a quote from NYT's Nicholas Kristoff from http://www.nytimes.com/2013/08/29/opinion/kristof-reinforce-a-norm-in-syria.html
"It looks as if we'll be firing Tomahawk cruise missiles at Syria in the coming days, and critics are raising legitimate concerns:"
"Yet there is value in bolstering international norms against egregious behavior like genocide or the use of chemical weapons. Since President Obama established a "red line" about chemical weapons use, his credibility has been at stake: he can't just whimper and back down."
Obama did back down.
NIcholas Kristof, vigilant protector of American credibility through bombing Syria.RabidGandhi , August 26, 2016 at 3:48 pm
he's just another syncophantic punk .in a long line of syncophantic punks
..oh..that includes Kristof toopolecat , August 26, 2016 at 7:17 pm
Ah yes the credibility of our élites. With their sterling record on Nafta's benefits, Iraq's liberation, Greece's rebound, the IMF's rehabilitation of countries
We must pass TPP or Tom Friedman will lose credibility, what?Propertius , August 26, 2016 at 3:53 pm
yeah but will he have to shave off his 'stache' ??HopeLB , August 26, 2016 at 8:36 pm
Wonderful (and credible) assessment.
Aug 29, 2016 | www.nakedcapitalism.comWhy the Proponents of TPP Are Traitors
There are two reasons: First, they consciously seek to weaken the national defense. And second, the Investor-State Dispute Settlement (ISDS) system is a surrender of national sovereignty .
This might be labeled the "Ghost Fleet" argument, since we're informed that Paul Singer and Augustus Cole's techno-thriller has really caught the attention of the national security class below the political appointee level, and that this is a death blow for neoliberalism. Why? "The multi-billion dollar, next generation F-35 aircraft, for instance, is rendered powerless after it is revealed that Chinese microprocessor manufacturers had implanted malicious code into products intended for the jet" ( Foreign Policy ). Clearly, we need, well, industrial policy, and we need to bring a lot of manufacturing home. From Brigadier General (Retired) John Adams :
In 2013, the Pentagon's Defense Science Board put forward a remarkable report describing one of the most significant but little-recognized threats to US security: deindustrialization. The report argued that the loss of domestic U.S. manufacturing facilities has not only reduced U.S. living standards but also compromised U.S. technology leadership "by enabling new players to learn a technology and then gain the capability to improve on it." The report explained that the offshoring of U.S. manufacturing presents a particularly dangerous threat to U.S. military readiness through the "compromise of the supply chain for key weapons systems components."
Our military is now shockingly vulnerable to major disruptions in the supply chain, including from substandard manufacturing practices, natural disasters, and price gouging by foreign nations. Poor manufacturing practices in offshore factories lead to problem-plagued products, and foreign producers-acting on the basis of their own military or economic interests-can sharply raise prices or reduce or stop sales to the United States.
The link between TPP and this kind of offshoring has been well-established.
And, one might say, the link between neo-liberal economic policy "and this kind of offshoring has been well-established" as well.
So, when I framed the issue as one where pro-TPPers "consciously seek to weaken the national defense," that's exactly what's going on. Neoliberalism, through offshoring, weakens the national defense, because it puts our weaponry at the mercy of fragile and corruptible supply chains. Note that re-industrializing America has positive appeal, too: For the right, on national security grounds; and for the left, on labor's behalf (and maybe helping out the Rust Belt that neoliberal policies of the last forty years did so much to destroy. Of course, this framing would make Clinton a traitor, but you can't make an omelette without breaking eggs. (Probably best to to let the right, in its refreshingly direct fashion, use the actual "traitor" word, and the left, shocked, call for the restoration of civility, using verbiage like "No, I wouldn't say she's a traitor. She's certainly 'extremely careless' with our nation's security.")
The Investor-State Dispute Settlement system is a hot mess (unless you represent a corporation, or are one of tiny fraternity of international corporate lawyers who can plead and/or judge ISDS cases). Yves wrote :
What may have torched the latest Administration salvo is a well-timed joint publication by Wikileaks and the New York Times of a recent version of the so-called investment chapter. That section sets forth one of the worst features of the agreement, the investor-state dispute settlement process (ISDS). As we've described at length in earlier posts, the ISDS mechanism strengthens the existing ISDS process. It allows for by allowing foreign investors to sue governments over lost potential future profits in secret arbitration panels. Those panels have been proved to be conflict-ridden and arbitrary. And the grounds for appeal are limited and technical.
(More from NC on the ISDS panels , the TPP clauses on ISDS , the "code of conduct" for lawyers before the ISDS, pending ISDS settlements , and the potential constitutional challenges to the ISDS system.)
Here again we have a frame that appeals to both right and left. The very thought of surrendering national sovereignty to an international organization makes any good conservative's back teeth itch. And the left sees the "lost profits" doctrine as a club to prevent future government programs they would like to put in place (single payer, for example). And in both cases, the neoliberal doctrine of putting markets before anything else makes pro-TPP-ers traitors. To the right, because nationalism trumps internationalism; to the left, because TPP prevents the State from looiking after the welfare of its people.
The Political State of Play
All I know is what I read in the papers, so what follows can only be speculation. That said, there are two ways TPP could be passed: In the lame duck session, by Obama, or after a new President is inaugurated, by Clinton (or possibly by Trump).
Passing TPP in the Lame Duck Session
Obama is committed to passing TPP (and we might remember that the adminstration failed to pass the draft in Maui , then succeeded in Atlanta . And the House killed Fast Track once , before voting for it (after which the Senate easily passed it, and Obama signed it). So the TPP may be a "heavy lift," but that doesn't mean Obama can't accomplish it. Obama says :
[OBAMA:] And hopefully, after the election is over and the dust settles, there will be more attention to the actual facts behind the deal and it won't just be a political symbol or a political football. And I will actually sit down with people on both sides, on the right and on the left. I'll sit down publicly with them and we'll go through the whole provisions. I would enjoy that, because there's a lot of misinformation.
I'm really confident I can make the case this is good for American workers and the American people. And people said we weren't going to be able to get the trade authority to even present this before Congress, and somehow we muddled through and got it done. And I intend to do the same with respect to the actual agreement.
So how would Obama "muddle through"? One way is to appeal to legislators who won't have to face voters again :
So it is looking like a very close vote. (For procedural and political reasons, Obama will not bring it to a vote unless he is sure he has the necessary votes). Now let's look at one special group of Representatives who can swing this vote: the actual lame-ducks, i.e., those who will be in office only until Jan. 3. It depends partly on how many lose their election on Nov. 8, but the average number of representatives who left after the last three elections was about 80.
Most of these people will be looking for a job, preferably one that can pay them more than $1 million a year. From the data provided by OpenSecrets.org, we can estimate that about a quarter of these people will become lobbyists. (An additional number will work for firms that are clients of lobbyists).
So there you have it: It is all about corruption, and this is about as unadulterated as corruption gets in our hallowed democracy, other than literal cash under a literal table. These are the people whom Obama needs to pass this agreement, and the window between Nov. 9 and Jan. 3 is the only time that they are available to sell their votes to future employers without any personal political consequences whatsoever. The only time that the electorate can be rendered so completely irrelevant, if Obama can pull this off.
(The article doesn't talk about the Senate, but Fast Track passed the Senate with a filibuster-proof super-majority, so the battle is in the House anyhow. And although the text of TPP cannot be amended - that's what fast track means! - there are still ways to affect the interpretation and enforcement of the text, so Obama and his corporate allies have bargaining chips beyond Beltway sinecures.)
Now, when we think about how corrupt the political class has become, it's not hard to see why Obama is confident that he will win. ( Remember , "[T]he preferences of economic elites have far more independent impact upon policy change than the preferences of average citizens do.") However, if the anti-TPP-ers raise the rhetorical stakes from policy disagreement to treason, maybe a few of those 80 representatives will do the right thing (or, if you prefer, decide that the reputational damage to their future career makes a pro-TPP vote not worth it. Who wants to play golf with a traitor?)
Passing TPP after the Inaugural
coronationinaugural, Clinton will have to use more complicated tactics than dangling goodies before the snouts of representatives leaving for K Street. (We've seen that Clinton's putative opposition to TPP is based on lawyerly parsing; and her base supports it. So I assume a Clinton administration would go full speed ahead with it.) My own thought has been that she'd set up a "conversation" on trade, and then buy off the national unions with "jobs for the boys," so that they sell their locals down the river. Conservative Jennifer Rubin has a better proposal , which meets Clinton's supposed criterion of not hurting workers even better:
Depending on the election results and how many pro-free-trade Republicans lose, it still might not be sufficient. Here's a further suggestion: Couple it with a substantial infrastructure project that Clinton wants, but with substantial safeguards to make sure that the money is wisely spent. Clinton gets a big jobs bill - popular with both sides - and a revised TPP gets through.
Finally, an even more radical proposal, again from a conservative source :
What Clinton needs is a significant revision to TPP that she can tout as a real reform to trade agreements, one that satisfies some of the TPP's critics on the left. A minor tweak is unlikely to assuage anyone; this change needs to be a major one. Fortunately, there is a TPP provision that fits the bill perfectly: investor state dispute settlement (ISDS), the procedure that allows foreign investors to sue governments in an international tribunal. Removing ISDS could triangulate the TPP debate, allowing for enough support to get it through Congress.
Obama can't have a conversation on trade, or propose a jobs program, let alone jettison ISDS; all he's got going for him is corruption. So, interestingly, although Clinton can't take the simple road of bribing the 80 represenatives, she does have more to bargain with on policy. Rubin's jobs bill could at least be framed as a riposte to the "Ghost Fleet" argument, since both are about "jawbs," even if infrastructure programs and reindustrialization aren't identical in intent. And while I don't think Clinton would allow ISDS to be removed ( her corporate donors love it ), at least somebody's thinking about how to pander to the left. Nevertheless, what does a jobs program matter if the new jobs leave the country anyhow? And suppose ISDS is removed, but the removal of the precautionary principle remains? We'd still get corporate-friendly decisions, bilaterally. And people would end up balancing the inevitable Clinton complexity and mush against the simplicity of the message that a vote for TPP is a vote against the United States.
I hope I've persuaded you that TPP is still very much alive, and that both Obama in the lame duck, and Clinton (or even Trump) when inaugurated have reasonable hopes of passing it. However, I think raising the ante rhetorically by framing a pro-TPP vote as treason could help sway a close vote; and if readers try that frame out, I'd like to hear the results (especially when the result comes from a letter to your Congress critter). Interestingly, Buzzfeed just published tonight the first in a four-part series, devoted to the idea that ISDS is what we have said it is all along: A surrender of national sovereignty. Here's a great slab of it :
Imagine a private, global super court that empowers corporations to bend countries to their will.
Say a nation tries to prosecute a corrupt CEO or ban dangerous pollution. Imagine that a company could turn to this super court and sue the whole country for daring to interfere with its profits, demanding hundreds of millions or even billions of dollars as retribution.
Imagine that this court is so powerful that nations often must heed its rulings as if they came from their own supreme courts, with no meaningful way to appeal. That it operates unconstrained by precedent or any significant public oversight, often keeping its proceedings and sometimes even its decisions secret. That the people who decide its cases are largely elite Western corporate attorneys who have a vested interest in expanding the court's authority because they profit from it directly, arguing cases one day and then sitting in judgment another. That some of them half-jokingly refer to themselves as "The Club" or "The Mafia."
And imagine that the penalties this court has imposed have been so crushing - and its decisions so unpredictable - that some nations dare not risk a trial, responding to the mere threat of a lawsuit by offering vast concessions, such as rolling back their own laws or even wiping away the punishments of convicted criminals.
This system is already in place, operating behind closed doors in office buildings and conference rooms in cities around the world. Known as investor-state dispute settlement, or ISDS, it is written into a vast network of treaties that govern international trade and investment, including NAFTA and the Trans-Pacific Partnership, which Congress must soon decide whether to ratify.
That's the stuff to give the troops!
 Trump: "I pledge to never sign any trade agreement that hurts our workers." Lotta wiggle room there, and the lawyerly parsing is just like Clinton's. I don't think it's useful to discuss what Trump might do on TPP, because until there are other parties to the deal, there's no deal to be had. Right now, we're just looking at Trump doing A-B testing - not that there's anything wrong with that - which the press confuses with policy proposals. So I'm not considering Trump because I don't think we have any data to go on.
 In-Depth News explains the mechanisms:
To pacify [those to whom he will
corruptappeal], Obama will have to convince them that what they want will anyway be achieved, even if these are not legally part of the TPP because the TPP text cannot be amended.
He can try to achieve this through bilateral side agreements on specific issues. Or he can insist that some countries take on extra obligations beyond what is required by the TPP as a condition for obtaining a U.S. certification that they have fulfilled their TPP obligations.
This certification is required for the U.S. to provide the TPP's benefits to its partners, and the U.S. has previously made use of this process to get countries to take on additional obligations, which can then be shown to Congress members that their objectives have been met.
In other words, side deals.
 This should not be taken to imply that Clinton does not have corruption going for her, too. She can also make all the side deals Obama can.
Zero HedgeTTIP negotiations have been ongoing since 2013 in an effort to establish a massive free trade zone that would eliminate many tariffs. After 14 rounds of talks that have lasted three years not a single common item out of the 27 chapters being discussed has been agreed on. The United States has refused to agree on an equal playing field between European and American companies in the sphere of public procurement sticking to the principle of "buy American".
The opponents of the deal believe that in its current guise the TTIP is too friendly to US businesses. One of the main concerns with TTIP is that it could allow multinational corporations to effectively "sue" governments for taking actions that might damage their businesses. Critics claim American companies might be able to avoid having to meet various EU health, safety and environment regulations by challenging them in a quasi-court set up to resolve disputes between investors and states.
In Europe thousands of people supported by society groups, trade unions and activists take to the streets expressing protest against the deal. Three million people have signed a petition calling for it to be scrapped. For instance, various trade unions and other groups have called for protests against the TTIP across Germany to take place on September 17. A trade agreement with Canada has also come under attack.
US presidential candidate Donald Trump has promoted protectionist trade policies, while rival Hillary Clinton has also cast doubt on the TTIP deal. Congressional opposition has become steep. The lawmakers on both sides of the aisle have railed against free trade agreements as unfair to US companies and workers.
These developments take place against the background of another major free trade agreement - the Trans Pacific Partnership (TPP) - hitting snags on the way to being pushed through Congress. The chances are really slim.
silverer •Sep 5, 2016 9:51 AM
"US Faces Major Setback" Well, actually, US corporations face a major setback. Average US citizens face a reprieve.
Aug 24, 2016 | www.theguardian.com
...the British politician, who was invited by Mississippi governor Phil Bryant, will draw parallels between what he sees as the inspirational story of Brexit and Trump's campaign. Farage will describe the Republican's campaign as a similar crusade by grassroots activists against "big banks and global political insiders" and how those who feel disaffected and disenfranchised can become involved in populist, rightwing politics. With Trump lagging in the polls, just as Brexit did prior to the vote on the referendum, Farage will also hearten supporters by insisting that they can prove pundits and oddsmakers wrong as well.
This message resonates with the Trump campaign's efforts to reach out to blue collar voters who have become disillusioned with American politics, while also adding a unique flair to Trump's never staid campaign rallies.
The event will mark the first meeting between Farage and Trump.
Arron Banks, the businessman who backed Leave.EU, the Brexit campaign group associated with the UK Independence party (Ukip), tweeted that he would be meeting Trump over dinner and was looking forward to Farage's speech.
The appointment last week of Stephen Bannon, former chairman of the Breitbart website, as "CEO" of Trump's campaign has seen the example of the Brexit vote, which Breitbart enthusiastically advocated, rise to the fore in Trump's campaign narrative.
Speaking to a local radio station before the joint rally, Farage urged Americans to "go out and fight" against Hillary Clinton.
"I am going to say to people in this country that the circumstances, the similarities, the parallels between the people who voted Brexit and the people who could beat Clinton in a few weeks time here in America are uncanny," Farage told Super Talk Mississippi. "If they want things to change they have get up out of their chairs and go out and fight for it. It can happen. We've just proved it."
"I am being careful," he added when asked if he supported the controversial Republican nominee. "It's not for me as a foreign politician to say who you should vote for ... All I will say is that if you vote for Hillary Clinton, then nothing will change. She represents the very politics that we've just broken through the Brexit vote in the United Kingdom."
www.counterpunch.orgMarch 25, 2016
CHRIS HEDGES: We're going to be discussing a great Ponzi scheme that not only defines not only the U.S. but the global economy, how we got there and where we're going. And with me to discuss this issue is the economist Michael Hudson, author of Killing the Host: How Financial Parasites and Debt Destroy the Global Economy. A professor of economics who worked for many years on Wall Street, where you don't succeed if you don't grasp Marx's dictum that capitalism is about exploitation. And he is also, I should mention, the godson of Leon Trotsky.
I want to open this discussion by reading a passage from your book, which I admire very much, which I think gets to the core of what you discuss. You write,
"Adam Smith long ago remarked that profits often are highest in nations going fastest to ruin. There are many ways to create economic suicide on a national level. The major way through history has been through indebting the economy. Debt always expands to reach a point where it cannot be paid by a large swathe of the economy. This is the point where austerity is imposed and ownership of wealth polarizes between the One Percent and the 99 Percent. Today is not the first time this has occurred in history. But it is the first time that running into debt has occurred deliberately." Applauded. "As if most debtors can get rich by borrowing, not reduced to a condition of debt peonage."
So let's start with the classical economists, who certainly understood this. They were reacting of course to feudalism. And what happened to the study of economics so that it became gamed by ideologues?
HUDSON: The essence of classical economics was to reform industrial capitalism, to streamline it, and to free the European economies from the legacy of feudalism. The legacy of feudalism was landlords extracting land-rent, and living as a class that took income without producing anything. Also, banks that were not funding industry. The leading industrialists from James Watt, with his steam engine, to the railroads
HEDGES: From your book you make the point that banks almost never funded industry.
HUDSON: That's the point: They never have. By the time you got to Marx later in the 19th century, you had a discussion, largely in Germany, over how to make banks do something they did not do under feudalism. Right now we're having the economic surplus being drained not by the landlords but also by banks and bondholders.
Adam Smith was very much against colonialism because that lead to wars, and wars led to public debt. He said the solution to prevent this financial class of bondholders burdening the economy by imposing more and more taxes on consumer goods every time they went to war was to finance wars on a pay-as-you-go basis. Instead of borrowing, you'd tax the people. Then, he thought, if everybody felt the burden of war in the form of paying taxes, they'd be against it. Well, it took all of the 19th century to fight for democracy and to extend the vote so that instead of landlords controlling Parliament and its law-making and tax system through the House of Lords, you'd extend the vote to labor, to women and everybody. The theory was that society as a whole would vote in its self-interest. It would vote for the 99 Percent, not for the One Percent.
By the time Marx wrote in the 1870s, he could see what was happening in Germany. German banks were trying to make money in conjunction with the government, by lending to heavy industry, largely to the military-industrial complex.
HEDGES: This was Bismarck's kind of social – I don't know what we'd call it. It was a form of capitalist socialism
HUDSON: They called it State Capitalism. There was a long discussion by Engels, saying, wait a minute. We're for Socialism. State Capitalism isn't what we mean by socialism. There are two kinds of state-oriented–.
HEDGES: I'm going to interject that there was a kind of brilliance behind Bismarck's policy because he created state pensions, he provided health benefits, and he directed banking toward industry, toward the industrialization of Germany which, as you point out, was very different in Britain and the United States.
HUDSON: German banking was so successful that by the time World War I broke out, there were discussions in English economic journals worrying that Germany and the Axis powers were going to win because their banks were more suited to fund industry. Without industry you can't have really a military. But British banks only lent for foreign trade and for speculation. Their stock market was a hit-and-run operation. They wanted quick in-and-out profits, while German banks didn't insist that their clients pay as much in dividends. German banks owned stocks as well as bonds, and there was much more of a mutual partnership.
That's what most of the 19th century imagined was going to happen – that the world was on the way to socializing banking. And toward moving capitalism beyond the feudal level, getting rid of the landlord class, getting rid of the rent, getting rid of interest. It was going to be labor and capital, profits and wages, with profits being reinvested in more capital. You'd have an expansion of technology. By the early twentieth century most futurists imagined that we'd be living in a leisure economy by now.
HEDGES: Including Karl Marx.
HUDSON: That's right. A ten-hour workweek. To Marx, socialism was to be an outgrowth of the reformed state of capitalism, as seemed likely at the time – if labor organized in its self-interest.
HEDGES: Isn't what happened in large part because of the defeat of Germany in World War I? But also, because we took the understanding of economists like Adam Smith and maybe Keynes. I don't know who you would blame for this, whether Ricardo or others, but we created a fictitious economic theory to praise a rentier or rent-derived, interest-derived capitalism that countered productive forces within the economy. Perhaps you can address that.
HUDSON: Here's what happened. Marx traumatized classical economics by taking the concepts of Adam Smith and John Stuart Mill and others, and pushing them to their logical conclusion. Progressive capitalist advocates – Ricardian socialists such as John Stuart Mill – wanted to tax away the land or nationalize it. Marx wanted governments to take over heavy industry and build infrastructure to provide low-cost and ultimately free basic services. This was traumatizing the landlord class and the One Percent. And they fought back. They wanted to make everything part of "the market," which functioned on credit supplied by them and paid rent to them.
None of the classical economists imagined how the feudal interests – these great vested interests that had all the land and money – actually would fight back and succeed. They thought that the future was going to belong to capital and labor. But by the late 19th century, certainly in America, people like John Bates Clark came out with a completely different theory, rejecting the classical economics of Adam Smith, the Physiocrats and John Stuart Mill.
HEDGES: Physiocrats are, you've tried to explain, the enlightened French economists.
HUDSON: The common denominator among all these classical economists was the distinction between earned income and unearned income. Unearned income was rent and interest. Earned incomes were wages and profits. But John Bates Clark came and said that there's no such thing as unearned income. He said that the landlord actually earns his rent by taking the effort to provide a house and land to renters, while banks provide credit to earn their interest. Every kind of income is thus "earned," and everybody earns their income. So everybody who accumulates wealth, by definition, according to his formulas, get rich by adding to what is now called Gross Domestic Product (GDP).
HEDGES: One of the points you make in Killing the Host which I liked was that in almost all cases, those who had the capacity to make money parasitically off interest and rent had either – if you go back to the origins – looted and seized the land by force, or inherited it.
HUDSON: That's correct. In other words, their income is unearned. The result of this anti-classical revolution you had just before World War I was that today, almost all the economic growth in the last decade has gone to the One Percent. It's gone to Wall Street, to real estate
HEDGES: But you blame this on what you call Junk Economics.
HUDSON: Junk Economics is the anti-classical reaction.
HEDGES: Explain a little bit how, in essence, it's a fictitious form of measuring the economy.
HUDSON: Well, some time ago I went to a bank, a block away from here – a Chase Manhattan bank – and I took out money from the teller. As I turned around and took a few steps, there were two pickpockets. One pushed me over and the other grabbed the money and ran out. The guard stood there and saw it. So I asked for the money back. I said, look, I was robbed in your bank, right inside. And they said, "Well, we don't arm our guards because if they shot someone, the thief could sue us and we don't want that." They gave me an equivalent amount of money back.
Well, imagine if you count all this crime, all the money that's taken, as an addition to GDP. Because now the crook has provided the service of not stabbing me. Or suppose somebody's held up at an ATM machine and the robber says, "Your money or your life." You say, "Okay, here's my money." The crook has given you the choice of your life. In a way that's how the Gross National Product accounts are put up. It's not so different from how Wall Street extracts money from the economy. Then also you have landlords extracting
HEDGES: Let's go back. They're extracting money from the economy by debt peonage. By raising
HUDSON: By not playing a productive role, basically.
HEDGES: Right. So it's credit card interest, mortgage interest, car loans, student loans. That's how they make their funds.
HUDSON: That's right. Money is not a factor of production. But in order to have access to credit, in order to get money, in order to get an education, you have to pay the banks. At New York University here, for instance, they have Citibank. I think Citibank people were on the board of directors at NYU. You get the students, when they come here, to start at the local bank. And once you are in a bank and have monthly funds taken out of your account for electric utilities, or whatever, it's very cumbersome to change.
So basically you have what the classical economists called the rentier class. The class that lives on economic rents. Landlords, monopolists charging more, and the banks. If you have a pharmaceutical company that raises the price of a drug from $12 a shot to $200 all of a sudden, their profits go up. Their increased price for the drug is counted in the national income accounts as if the economy is producing more. So all this presumed economic growth that has all been taken by the One Percent in the last ten years, and people say the economy is growing. But the economy isn't growing
HEDGES: Because it's not reinvested.
HUDSON: That's right. It's not production, it's not consumption. The wealth of the One Percent is obtained essentially by lending money to the 99 Percent and then charging interest on it, and recycling this interest at an exponentially growing rate.
HEDGES: And why is it important, as I think you point out in your book, that economic theory counts this rentier income as productive income? Explain why that's important.
HUDSON: If you're a rentier, you want to say that you earned your income by
HEDGES: We're talking about Goldman Sachs, by the way.
HUDSON: Yes, Goldman Sachs. The head of Goldman Sachs came out and said that Goldman Sachs workers are the most productive in the world. That's why they're paid what they are. The concept of productivity in America is income divided by labor. So if you're Goldman Sachs and you pay yourself $20 million a year in salary and bonuses, you're considered to have added $20 million to GDP, and that's enormously productive. So we're talking in a tautology. We're talking with circular reasoning here.
So the issue is whether Goldman Sachs, Wall Street and predatory pharmaceutical firms, actually add "product" or whether they're just exploiting other people. That's why I used the word parasitism in my book's title. People think of a parasite as simply taking money, taking blood out of a host or taking money out of the economy. But in nature it's much more complicated. The parasite can't simply come in and take something. First of all, it needs to numb the host. It has an enzyme so that the host doesn't realize the parasite's there. And then the parasites have another enzyme that takes over the host's brain. It makes the host imagine that the parasite is part of its own body, actually part of itself and hence to be protected.
That's basically what Wall Street has done. It depicts itself as part of the economy. Not as a wrapping around it, not as external to it, but actually the part that's helping the body grow, and that actually is responsible for most of the growth. But in fact it's the parasite that is taking over the growth.
The result is an inversion of classical economics. It turns Adam Smith upside down. It says what the classical economists said was unproductive – parasitism – actually is the real economy. And that the parasites are labor and industry that get in the way of what the parasite wants – which is to reproduce itself, not help the host, that is, labor and capital.
HEDGES: And then the classical economists like Adam Smith were quite clear that unless that rentier income, you know, the money made by things like hedge funds, was heavily taxed and put back into the economy, the economy would ultimately go into a kind of tailspin. And I think the example of that, which you point out in your book, is what's happened in terms of large corporations with stock dividends and buybacks. And maybe you can explain that.
HUDSON: There's an idea in superficial textbooks and the public media that if companies make a large profit, they make it by being productive. And with
HEDGES: Which is still in textbooks, isn't it?
HUDSON: Yes. And also that if a stock price goes up, you're just capitalizing the profits – and the stock price reflects the productive role of the company. But that's not what's been happening in the last ten years. Just in the last two years, 92 percent of corporate profits in America have been spent either on buying back their own stock, or paid out as dividends to raise the price of the stock.
HEDGES: Explain why they do this.
HUDSON: About 15 years ago at Harvard, Professor Jensen said that the way to ensure that corporations are run most efficiently is to make the managers increase the price of the stock. So if you give the managers stock options, and you pay them not according to how much they're producing or making the company bigger, or expanding production, but the price of the stock, then you'll have the corporation run efficiently, financial style.
So the corporate managers find there are two ways that they can increase the price of the stock. The first thing is to cut back long-term investment, and use the money instead to buy back their own stock. But when you buy your own stock, that means you're not putting the money into capital formation. You're not building new factories. You're not hiring more labor. You can actually increase the stock price by firing labor.
HEDGES: That strategy only works temporarily.
HUDSON: Temporarily. By using the income from past investments just to buy back stock, fire the labor force if you can, and work it more intensively. Pay it out as dividends. That basically is the corporate raider's model. You use the money to pay off the junk bond holders at high interest. And of course, this gets the company in trouble after a while, because there is no new investment.
So markets shrink. You then go to the labor unions and say, gee, this company's near bankruptcy, and we don't want to have to fire you. The way that you can keep your job is if we downgrade your pensions. Instead of giving you what we promised, the defined benefit pension, we'll turn it into a defined contribution plan. You know what you pay every month, but you don't know what's going to come out. Or, you wipe out the pension fund, push it on to the government's Pension Benefit Guarantee Corporation, and use the money that you were going to pay for pensions to pay stock dividends. By then the whole economy is turning down. It's hollowed out. It shrinks and collapses. But by that time the managers will have left the company. They will have taken their bonuses and salaries and run.
HEDGES: I want to read this quote from your book, written by David Harvey, in A Brief History of Neoliberalism, and have you comment on it.
"The main substantive achievement of neoliberalism has been to redistribute rather than to generate wealth and income. [By] 'accumulation by dispossession' I mean the commodification and privatization of land, and the forceful expulsion of peasant populations; conversion of various forms of property rights (common collective state, etc.) into exclusive private property rights; suppression of rights to the commons; colonial, neocolonial, and the imperial processes of appropriation of assets (including natural resources); and usury, the national debt and, most devastating at all, the use of the credit system as a radical means of accumulation by dispossession. To this list of mechanisms, we may now add a raft of techniques such as the extraction of rents from patents, and intellectual property rights (such as the diminution or erasure of various forms of common property rights, such as state pensions, paid vacations, and access to education, health care) one through a generation or more of class struggle. The proposal to privatize all state pension rights, pioneered in Chile under the dictatorship is, for example, one of the cherished objectives of the Republicans in the US."
This explains the denouement. The final end result you speak about in your book is, in essence, allowing what you call the rentier or the speculative class to cannibalize the entire society until it collapses.
HUDSON: A property right is not a factor of production. Look at what happened in Chicago, the city where I grew up. Chicago didn't want to raise taxes on real estate, especially on its expensive commercial real estate. So its budget ran a deficit. They needed money to pay the bondholders, so they sold off the parking rights to have meters – you know, along the curbs. The result is that they sold to Goldman Sachs 75 years of the right to put up parking meters. So now the cost of living and doing business in Chicago is raised by having to pay the parking meters. If Chicago is going to have a parade and block off traffic, it has to pay Goldman Sachs what the firm would have made if the streets wouldn't have been closed off for a parade. All of a sudden it's much more expensive to live in Chicago because of this.
But this added expense of having to pay parking rights to Goldman Sachs – to pay out interest to its bondholders – is counted as an increase in GDP, because you've created more product simply by charging more. If you sell off a road, a government or local road, and you put up a toll booth and make it into a toll road, all of a sudden GDP goes up.
If you go to war abroad, and you spend more money on the military-industrial complex, all this is counted as increased production. None of this is really part of the production system of the capital and labor building more factories and producing more things that people need to live and do business. All of this is overhead. But there's no distinction between wealth and overhead.
Failing to draw that distinction means that the host doesn't realize that there is a parasite there. The host economy, the industrial economy, doesn't realize what the industrialists realized in the 19th century: If you want to be an efficient economy and be low-priced and under-sell competitors, you have to cut your prices by having the public sector provide roads freely. Medical care freely. Education freely.
If you charge for all of these, you get to the point that the U.S. economy is in today. What if American factory workers were to get all of their consumer goods for nothing. All their food, transportation, clothing, furniture, everything for nothing. They still couldn't compete with Asians or other producers, because they have to pay up to 43% of their income for rent or mortgage interest, 10% or more of their income for student loans, credit card debt. 15% of their paycheck is automatic withholding to pay Social Security, to cut taxes on the rich or to pay for medical care.
So Americans built into the economy all this overhead. There's no distinction between growth and overhead. It's all made America so high-priced that we're priced out of the market, regardless of what trade policy we have.
HEDGES: We should add that under this predatory form of economics, you game the system. So you privatize pension funds, you force them into the stock market, an overinflated stock market. But because of the way companies go public, it's the hedge fund managers who profit. And it's those citizens whose retirement savings are tied to the stock market who lose. Maybe we can just conclude by talking about how the system is fixed, not only in terms of burdening the citizen with debt peonage, but by forcing them into the market to fleece them again.
HUDSON: Well, we talk about an innovation economy as if that makes money. Suppose you have an innovation and a company goes public. They go to Goldman Sachs and other Wall Street investment banks to underwrite the stock to issue it at $40 a share. What's considered a successful float is when, immediately, Goldman and the others will go to their insiders and tell them to buy this stock and make a quick killing. A "successful" flotation doubles the price in one day, so that at the end of the day the stock's selling for $80.
HEDGES: They have the option to buy it before anyone else, knowing that by the end of the day it'll be inflated, and then they sell it off.
HUDSON: That's exactly right.
HEDGES: So the pension funds come in and buy it at an inflated price, and then it goes back down.
HUDSON: It may go back down, or it may be that the company just was shortchanged from the very beginning. The important thing is that the Wall Street underwriting firm, and the speculators it rounds up, get more in a single day than all the years it took to put the company together. The company gets $40. And the banks and their crony speculators also get $40.
So basically you have the financial sector ending up with much more of the gains. The name of the game if you're on Wall Street isn't profits. It's capital gains. And that's something that wasn't even part of classical economics. They didn't anticipate that the price of assets would go up for any other reason than earning more money and capitalizing on income. But what you have had in the last 50 years – really since World War II – has been asset-price inflation. Most middle-class families have gotten the wealth that they've got since 1945 not really by saving what they've earned by working, but by the price of their house going up. They've benefited by the price of the house. And they think that that's made them rich and the whole economy rich.
The reason the price of housing has gone up is that a house is worth whatever a bank is going to lend against it. If banks made easier and easier credit, lower down payments, then you're going to have a financial bubble. And now, you have real estate having gone up as high as it can. I don't think it can take more than 43% of somebody's income to buy it. But now, imagine if you're joining the labor force. You're not going to be able to buy a house at today's prices, putting down a little bit of your money, and then somehow end up getting rich just on the house investment. All of this money you pay the bank is now going to be subtracted from the amount of money that you have available to spend on goods and services.
So we've turned the post-war economy that made America prosperous and rich inside out. Somehow most people believed they could get rich by going into debt to borrow assets that were going to rise in price. But you can't get rich, ultimately, by going into debt. In the end the creditors always win. That's why every society since Sumer and Babylonia have had to either cancel the debts, or you come to a society like Rome that didn't cancel the debts, and then you have a dark age. Everything collapses.
Sep 12, 2016 | economistsview.typepad.comPaul Krugman:A Protectionist Moment? : ... if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization - not because it's technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. ...cawley : , Thursday, March 10, 2016 at 03:47 AM
But it's also true that much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics ( protectionism causes depressions !), vastly exaggerated claims for the benefits of trade liberalization and the costs of protection, hand-waving away the large distributional effects that are what standard models actually predict. I hope, by the way, that I haven't done any of that...
Furthermore, as Mark Kleiman sagely observes , the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins - but we now have an ideology utterly opposed to such redistribution in full control of one party, and with blocking power against anything but a minor move in that direction by the other.
So the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don't know exactly what form it's taking.
Ripping up the trade agreements we already have would, again, be a mess, and I would say that Sanders is engaged in a bit of a scam himself in even hinting that he could do such a thing. Trump might actually do it, but only as part of a reign of destruction on many fronts.
But it is fair to say that the case for more trade agreements - including TPP, which hasn't happened yet - is very, very weak. And if a progressive makes it to the White House, she should devote no political capital whatsoever to such things.Again, just because automation has been a major factor in job loss doesn't mean "off shoring" (using the term broadly and perhaps somewhat inaccurately) is not a factor.jonny bakho -> cawley... , Thursday, March 10, 2016 at 04:25 AM
The "free" trade deals suck. They are correctly diagnosed as part of the problem.
What would you propose to fix the problems caused by automation?Automation frees labor to do more productive and less onerous tasks. We should expand our solar production and our mass transit. We need to start re-engineering our urban areas. This will not bring back the number of jobs it would take to make cities like Flint thrive once again.jonny bakho -> jonny bakho... , Thursday, March 10, 2016 at 04:29 AM
Flint and Detroit have severe economic problems because they were mismanaged by road building and suburbanization in the 1950s and 1960s. Money that should have been spent on maintaining and improving urban infrastructure was instead plowed into suburban development that is not dense enough to sustain the infrastructure required to support it. People moved to the suburbs, abandoned the built infrastructure of the cities and kissed them goodbye.
Big roads polluted the cities with lead, noise, diesel particles and ozone and smog. Stroads created pedestrian kill zones making urban areas, unwalkable, unpleasant- an urban blights to drive through rather than destinations to drive to.
Government subsidized the white flight to the suburbs that has left both the suburbs and the urban cores with too low revenue to infrastructure ratio. The inner suburbs have aged into net losers, their infrastructure must be subsidized. Big Roads were built on the Big Idea that people would drive to the city to work and play and then drive home. That Big idea has a big problem. Urban areas are only sustainable when they have a high resident density. The future of cities like Flint and Detroit will be tearing out the roads and replacing them with streets and houses and renewing the housing stock that has been abandoned. It needs to be done by infill, revitalizing inner neighborhoods and working outward. Cities like Portland have managed to protect much of their core, but even they are challenged by demands for suburban sprawl.
Slash and burn development, creating new suburbs and abandoning the old is not a sustainable model. Not only should we put people to work replacing the Flint lead pipes, but much of the city should be rebuilt from the inside out. Flint is the leading edge of this problem that requires fundamental changes in our built environment to fix. I recommend studying Flint as an object lesson of what bad development policy could do to all of our cities.
http://www.flintexpats.comAn Interview with Frank Popper about Shrinking Cities, Buffalo Commons, and the Future of FlintRC AKA Darryl, Ron said in reply to jonny bakho... , Thursday, March 10, 2016 at 04:45 AM
How does America's approach shrinking cities compare to the rest of the world?
I think the American way is to do nothing until it's too late, then throw everything at it and improvise and hope everything works. And somehow, insofar as the country's still here, it has worked. But the European or the Japanese way would involve much more thought, much more foresight, much more central planning, and much less improvising. They would implement a more, shall we say, sustained effort. The American way is different. Europeans have wondered for years and years why cities like Detroit or Cleveland are left to rot on the vine. There's a lot of this French hauteur when they ask "How'd you let this happen?"
Do shrinking cities have any advantages over agricultural regions as they face declining populations?
The urban areas have this huge advantage over all these larger American regions that are going through this. They have actual governments with real jurisdiction. Corrupt as Detroit or Philadelphia or Camden may be, they have actual governments that are supposed to be in charge of them. Who's in charge of western Kansas? Who's in charge of the Great Plains? Who is in charge of the lower Mississippi Delta or central Appalachia? All they've got are these distant federal agencies whose past performance is not exactly encouraging.
Why wasn't there a greater outcry as the agricultural economy and the industrial economy collapsed?
One reason for the rest of the country not to care is that there's no shortage of the consumer goods that these places once produced. All this decline of agriculture doesn't mean we're running out of food. We've got food coming out of our ears. Likewise, Flint has suffered through all this, but it's not like it's hard to buy a car in this country. It's not as if Flint can behave like a child and say "I'm going to hold my nose and stop you from getting cars until you do the right thing." Flint died and you can get zero A.P.R. financing. Western Kansas is on its last legs and, gee, cereal is cheaper than ever.
In some sense that's the genius of capitalism - it's heartless. But if you look at the local results and the cultural results and the environmental results you shake your head. But I don't see America getting away from what I would call a little sarcastically the "wisdom" of the market. I don't think it's going to change.
So is there any large-scale economic fallout from these monumental changes?
Probably not, and it hurts to say so. And the only way I can feel good about saying that is to immediately point to the non-economic losses, the cultural losses. The losses of ways of life. The notion of the factory worker working for his or her children. The notion of the farmer working to build up the country and supply the rest of the world with food. We're losing distinctive ways of life. When we lose that we lose something important, but it's not like The Wall Street Journal cares. And I feel uncomfortable saying that. From a purely economic point of view, it's just the price of getting more efficient. It's a classic example of Schumpeter's theory of creative destruction, which is no fun if you're on the destruction end.
Does the decline of cities like Flint mirror the death of the middle class in the United States?
I think it's more the decline of the lower-middle class in the United States. Even when those jobs in the auto factories paid very high wages they were still for socially lower-middle-class people. I think there was always the notion in immigrant families and working-class families who worked in those situations that the current generation would work hard so that the children could go off and not have to do those kind of jobs. And when those jobs paid well that was a perfectly reasonable ambition. It's the cutting off of that ambition that really hurts now. The same thing has been true on farms and ranches in rural parts of the united states.
http://www.flintexpats.com/2010/05/interview-with-frank-popper-about.htmlIt is a much different thing to be small minded about trade than it is to be large minded about everything else. The short story that it is all about automation and not trade will always get a bad reception because it is small minded. When you add in the large minded story about everything else then it becomes something entirely different from the short story. We all agree with you about everything else. You are wrong about globalization though. Both financialization and globalization suck and even if we paper over them with tax and transfer then they will still suck. One must forget what it is to be a created equal human to miss that. Have you never felt the job of accomplishment? Does not pride and self-confidence matter in your life?RC AKA Darryl, Ron said in reply to RC AKA Darryl, Ron... , Thursday, March 10, 2016 at 06:11 AM"Have you never felt the joY of accomplishment?"ken melvin -> jonny bakho... , Thursday, March 10, 2016 at 04:49 AM
[Apparently I have "jobs" on the mind even though I no longer have one nor need one in the least.]America's first course of action is denial; then, we pretend that things are different than the seem a lot.RC AKA Darryl, Ron said in reply to ken melvin... , Thursday, March 10, 2016 at 05:39 AMPriceless!DrDick -> jonny bakho... , Thursday, March 10, 2016 at 08:52 AMWhile automation is part of the story, offshoring is just as important. Even when there is not net loss in the numbers of jobs in aggregate, there is significant loss in better paying jobs in manufacturing. It is important to look at the distributional effects within countries, as well as between themJulio -> cawley... , Thursday, March 10, 2016 at 08:24 AM
https://www.americanprogress.org/issues/economy/news/2014/07/30/94864/offshoring-work-is-taking-a-toll-on-the-u-s-economy/"off shoring"Chris G : , Thursday, March 10, 2016 at 03:58 AM
[The trending term is "tossing it over the Wall".]Legislatively, what would it take to withdraw from the WTO? NAFTA? Other trade agreements?RC AKA Darryl, Ron said in reply to Chris G ... , Thursday, March 10, 2016 at 04:52 AMIt would probably be cheaper and easier to just fix them. We don't need to withdraw from trade. We just need to fix the terms of trade that cause large trade deficits and cross border capital flows and also fix the FOREX system rigging.JohnH -> Chris G ... , Thursday, March 10, 2016 at 08:10 AMWhat would it take to ignore trade agreements? They shouldn't be any more difficult to ignore than the Geneva Conventions, which the US routinely flaunts.Richard A. : , Thursday, March 10, 2016 at 04:30 AMIn order to import we must export and in order to export we must import. The two are tied together. Suppressing imports means we export less.RC AKA Darryl, Ron said in reply to Richard A.... , Thursday, March 10, 2016 at 04:56 AM
What free trade does is lower the price level relative to wages. It doesn't uniformly lower the price level but rather lowers the cost of goods that are capable of being traded internationally. It lowers the price on those goods that are disproportionately purchased by those with low incomes.
Free trade causes a progressive decline in the price level while protectionism causes a regressive increase in the price level.Are you saying that free trade lowers the cost of rice in India and China and raises the cost of cell phones and autos in the US?pgl -> RC AKA Darryl, Ron... , Thursday, March 10, 2016 at 05:48 AMFunny rebuttal! Bhagwati probably has a model that says the opposite! But then he grew up in India and should one day get a Nobel Prize for his contributions to international economics.pgl -> Richard A.... , Thursday, March 10, 2016 at 05:47 AM"What free trade does is lower the price level relative to wages."Tom aka Rusty said in reply to Richard A.... , Thursday, March 10, 2016 at 06:54 AM
Which price? Whose wages? Look up Stopler-Samuelson ... a 1941 classic which I suspect Greg Mankiw has never bothered to learn.People don't need good wages, they can buy cheap Chinese stuff at WalMart.JohnH -> Richard A.... , Thursday, March 10, 2016 at 08:14 AM"In order to import we must export and in order to export we must import." One would think. However, experience shows that that's not the case.ken melvin : , Thursday, March 10, 2016 at 04:53 AM
Capital flows from overseas investments help balance the books. When that doesn't work, the US simply prints money to be held by foreign CBs.Our media needs to copy France 24, ... and have real debates about real issues. What we get is along the lines of ignoring the problem then attacking any effort to correct. for example, the media stayed away from the healthcare crisis, too complicated, but damn they are good at criticizing.JohnH -> ken melvin... , Thursday, March 10, 2016 at 08:16 AMFrance 24 promotes neocon-style jingoism...even worse than Big Media in America.Tom Palley : , Thursday, March 10, 2016 at 05:08 AM
I hope they're better on domestic social policy.A seriously shameful article. Krugman has been a booster of trade & globalization for 30 years: marginally more nuanced than the establishment, but still a booster.RC AKA Darryl, Ron said in reply to Tom Palley ... , Thursday, March 10, 2016 at 05:44 AM
Now, the establishment has what it wanted and the effects have been disastrous for those not in the top 20 percent of the income distribution.
At this stage, comes insult to injury. Establishment economists (like Mr. Krugman) can reinvent themselves with "brilliant new studies" showing the costs and damage of globalization. They pay no professional costs for the grievous injuries inflicted; there is no mention of the fact that critical outsider economists have been predicting and writing about these injuries and were right; and they blithely say we must stay the course because we are locked-in and have few options.
Forgive me while I puke.
Bless you my son.Peter K. -> RC AKA Darryl, Ron... , Thursday, March 10, 2016 at 06:13 AM
I don't think that they think that we weebles have memories."I don't think that they think that we weebles have memories."pgl -> Tom Palley ... , Thursday, March 10, 2016 at 05:51 AM
They insult our intelligence and wonder why people get mad.Krugman is not Greg Mankiw. Most people who actually get international economics (Mankiw does not) are not of the free trade benefits all types. Paul Samuelson certainly does not buy into Mankiw's spin. Funny thing - Mankiw recently cited an excellent piece from Samuelson only to dishonestly suggest Samuelson did not believe in what he wrote.Peter K. -> pgl... , Thursday, March 10, 2016 at 06:12 AMWhy are we talking about Mankiw? You can't move the goalposts.pgl -> Peter K.... , Thursday, March 10, 2016 at 06:40 AMWhy are you mischaracterizing what Krugman has written? That's my point. Oh wait - you misrepresent what people write so you can "win" a "debate". Never mind. Please proceed with the serial dishonesty.Peter K. -> pgl... , Thursday, March 10, 2016 at 08:55 AM"The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization - not because it's technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he's never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn't and can't."DrDick -> pgl... , Thursday, March 10, 2016 at 09:02 AM
As Dean Baker says, we need to confront Walmart and Goldman Sachs at home, who like these policies, more than the Chinese.
The Chinese want access to our consumer market. They'd also like if we did't invade countries like Iraq.
"so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn't"
And what is that? Tear up trade deals? It is Krugman who is engaging in straw man arguments.
Krugman does indeed misrepresent Sanders' positions on trade. Sander is not against trade, he merely insists on *Fair Trade*, which incorporates human rights and environmental protections. His opposition is to the kinds of deals, like NAFTA and TPP, which effectively gut those (a central element in Kruman's own critique of the latter).DrDick -> pgl... , Thursday, March 10, 2016 at 08:56 AMKrugman has definitely backed off his (much) earlier boosterism and publicly said so. This is an excellent piece by him, though it does rather downplay his earlier stances a bit. This is one of the things I especially like about him.Dan Kervick -> Tom Palley ... , Thursday, March 10, 2016 at 06:11 AMI can get the idea that some people win, some people lose from liberalized trade. But what really bugs me about the neoliberal trade agenda is that it has been part of a larger set of economically conservative, laissez faire policies that have exacerbated the damages from trade rather than offsetting them.pgl -> Dan Kervick... , Thursday, March 10, 2016 at 06:41 AM
At the same time they were exposing US workers to greater competition from abroad and destroying and offshoring working class jobs via both trade and liberalized capital flows, the neoliberals were also doing things like "reinventing government" - that is, shrinking structural government spending and public investment - and ending welfare. They have done nothing serious about steering capital and job development efforts toward the communities devastated by the liberalization.
The neoliberal position has seem to come down to "We can't make bourgeois progress without breaking a few working class eggs."I guess I'm not a neoliberal. Neither is Dani Rodrik. Nor is Paul Krugman.Dan Kervick -> pgl... , Thursday, March 10, 2016 at 07:50 AMWhat does Dani Rodrik have to do with the above comments?pgl -> Dan Kervick... , Thursday, March 10, 2016 at 08:51 AMRead his 1997 book. Excellent stuff.Julio -> Dan Kervick... , Thursday, March 10, 2016 at 08:38 AMGreat points, and a good line too.JohnH -> Tom Palley ... , Thursday, March 10, 2016 at 08:22 AMAgreed! "Krugman has been a booster of trade & globalization for 30 years: marginally more nuanced than the establishment, but still a booster.'Dan Kervick : , Thursday, March 10, 2016 at 05:11 AM
Now he claims that he saw the light all along! "much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization and the costs of protection, hand-waving away the large distributional effects that are what standard models actually predict. I hope, by the way, that I haven't done any of that..."
You would be hard pressed to find any Krugman clips that cited any of those problems in the past. Far from being an impartial economist, he was always an avid booster of free trade, overlooking those very downsides that he suddenly decides to confess.As far as I know, Sanders has not proposed ripping up the existing trade deals. His information page on trade emphasizes (i) his opposition to these deals when they were first negotiated and enacted, and (ii) the principles he will apply to the consideration of future trade deals. Much of his argumentation concerning past deals is put forward to motivate his present opposition to TPP.Dan Kervick -> Dan Kervick... , Thursday, March 10, 2016 at 05:29 AM
So Krugman's point about how difficult it would be diplomatically to "rip up" the existing trade deals seems like a red herring.Note also that Sanders connects his discussion of the harms of past trade policy to the Rebuild America Act. That is, his approach is forward facing. We can't undo most of the past damage by recreating the old working class economy we wrecked, but we can be aggressive about using government-directed national investment programs to create new, high-paying jobs in the US.jonny bakho -> Dan Kervick... , Thursday, March 10, 2016 at 06:16 AMYou could have said the same about the 1920sDan Kervick -> jonny bakho... , Thursday, March 10, 2016 at 06:23 AM
We can't undo most of the past damage by recreating the old agrarian class economy we wrecked, but we can be aggressive about using government-directed national investment programs to create new, high-paying jobs in the US.
The march of progress:
Mechanization of agriculture with displacement of large numbers of Ag workers.
The rise of factory work and large numbers employed in manufacturing.
Automation of Manufacturing with large displacement of workers engaged in manufacturing.
What do we want our workers to do? This question must be answered at the highest level of society and requires much government facilitation. The absence of government facilitation is THE problem.Completely agree. Countries need economic strategies that go beyond, "let the markets sort it all out."RC AKA Darryl, Ron said in reply to Dan Kervick... , Thursday, March 10, 2016 at 05:47 AM"...So Krugman's point about how difficult it would be diplomatically to "rip up" the existing trade deals seems like a red herring."pgl -> Dan Kervick... , Thursday, March 10, 2016 at 05:52 AM
[Win one for the kipper.]Memo to Paul Krugman - lead with the economics and stay with the economics. His need to get into the dirty business of politics dilutes what he ends up sensibly writes later on.Peter K. -> pgl... , Thursday, March 10, 2016 at 08:56 AM""The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization - not because it's technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he's never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn't and can't."Chatham -> Dan Kervick... , Thursday, March 10, 2016 at 09:36 AMYeah, it's pretty dishonest for Krugman to pretend that Sanders' position is "ripping up the trade agreements we already have" and then say Sanders is "engaged in a bit of a scam" because he can't do that. Sanders actual position (trying to stop new trade deals like the TPP) is something the president has a lot of influence over (they can veto the deal). Hard to tell what Krugman is doing here other than deliberately spreading misinformation.anne : , Thursday, March 10, 2016 at 05:26 AM
Also worth noting that he decides to compare Sanders' opposition to trade deals with Trump, and ignore the fact that Clinton has come out against the TPP as well .http://krugman.blogs.nytimes.com/2016/03/09/a-protectionist-moment/anne -> anne... , Thursday, March 10, 2016 at 05:26 AM
March 9, 2016
A Protectionist Moment?
By Paul Krugman
Busy with real life, but yes, I know what happened in the primaries yesterday. Triumph for Trump, and big upset for Sanders - although it's still very hard to see how he can catch Clinton. Anyway, a few thoughts, not about the horserace but about some deeper currents.
The Sanders win defied all the polls, and nobody really knows why. But a widespread guess is that his attacks on trade agreements resonated with a broader audience than his attacks on Wall Street; and this message was especially powerful in Michigan, the former auto superpower. And while I hate attempts to claim symmetry between the parties - Trump is trying to become America's Mussolini, Sanders at worst America's Michael Foot * - Trump has been tilling some of the same ground. So here's the question: is the backlash against globalization finally getting real political traction?
You do want to be careful about announcing a political moment, given how many such proclamations turn out to be ludicrous. Remember the libertarian moment? The reformocon moment? Still, a protectionist backlash, like an immigration backlash, is one of those things where the puzzle has been how long it was in coming. And maybe the time is now.
The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization - not because it's technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he's never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn't and can't.
But it's also true that much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions! ** ), vastly exaggerated claims for the benefits of trade liberalization and the costs of protection, hand-waving away the large distributional effects that are what standard models actually predict. I hope, by the way, that I haven't done any of that; I think I've always been clear that the gains from globalization aren't all that (here's a back-of-the-envelope on the gains from hyperglobalization *** - only part of which can be attributed to policy - that is less than 5 percent of world GDP over a generation); and I think I've never assumed away the income distribution effects.
Furthermore, as Mark Kleiman sagely observes, **** the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins - but we now have an ideology utterly opposed to such redistribution in full control of one party, and with blocking power against anything but a minor move in that direction by the other.
So the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don't know exactly what form it's taking.
Ripping up the trade agreements we already have would, again, be a mess, and I would say that Sanders is engaged in a bit of a scam himself in even hinting that he could do such a thing. Trump might actually do it, but only as part of a reign of destruction on many fronts.
But it is fair to say that the case for more trade agreements - including Trans-Pacific Partnership, which hasn't happened yet - is very, very weak. And if a progressive makes it to the White House, she should devote no political capital whatsoever to such things.
**** http://www.washingtonmonthly.com/ten-miles-square/2016/03/trade_trump_and_downward_class059814.phphttps://en.wikipedia.org/wiki/Michael_Footpgl -> anne... , Thursday, March 10, 2016 at 05:53 AM
Michael Mackintosh Foot (1913 – 2010) was a British Labour Party politician and man of letters who was a Member of Parliament (MP) from 1945 to 1955 and from 1960 until 1992. He was Deputy Leader of the Labour Party from 1976 to 1980, and later the Leader of the Labour Party and Leader of the Opposition from 1980 to 1983.
Associated with the left of the Labour Party for most of his career, Foot was an ardent supporter of the Campaign for Nuclear Disarmament and British withdrawal from the European Economic Community. He was appointed to the Cabinet as Secretary of State for Employment under Harold Wilson in 1974, and he later served as Leader of the House of Commons under James Callaghan. A passionate orator, he led Labour through the 1983 general election, when the party obtained its lowest share of the vote at a general election since 1918 and the fewest parliamentary seats it had had at any time since before 1945.Foot sounds like he was a good leader of the Labour Party.anne -> anne... , Thursday, March 10, 2016 at 05:27 AMhttp://krugman.blogs.nytimes.com/2016/03/04/the-mitt-hawley-fallacy/anne -> anne... , Thursday, March 10, 2016 at 05:28 AM
March 4, 2016
The Mitt-Hawley Fallacy
By Paul Krugman
There was so much wrong with Mitt Romney's Trump-is-a-disaster-whom-I-will-support-in-the-general * speech that it may seem odd to call him out for bad international macroeconomics. But this is a pet peeve of mine, in an area where I really, truly know what I'm talking about. So here goes.
In warning about Trumponomics, Romney declared:
"If Donald Trump's plans were ever implemented, the country would sink into prolonged recession. A few examples. His proposed 35 percent tariff-like penalties would instigate a trade war and that would raise prices for consumers, kill our export jobs and lead entrepreneurs and businesses of all stripes to flee America."
After all, doesn't everyone know that protectionism causes recessions? Actually, no. There are reasons to be against protectionism, but that's not one of them.
Think about the arithmetic (which has a well-known liberal bias). Total final spending on domestically produced goods and services is
Total domestic spending + Exports – Imports = GDP
Now suppose we have a trade war. This will cut exports, which other things equal depresses the economy. But it will also cut imports, which other things equal is expansionary. For the world as a whole, the cuts in exports and imports will by definition be equal, so as far as world demand is concerned, trade wars are a wash.
OK, I'm sure some people will start shouting "Krugman says protectionism does no harm." But no: protectionism in general should reduce efficiency, and hence the economy's potential output. But that's not at all the same as saying that it causes recessions.
But didn't the Smoot-Hawley tariff cause the Great Depression? No. There's no evidence at all that it did. Yes, trade fell a lot between 1929 and 1933, but that was almost entirely a consequence of the Depression, not a cause. (Trade actually fell faster ** during the early stages of the 2008 Great Recession than it did after 1929.) And while trade barriers were higher in the 1930s than before, this was partly a response to the Depression, partly a consequence of deflation, which made specific tariffs (i.e. tariffs that are stated in dollars per unit, not as a percentage of value) loom larger.
Again, not the thing most people will remember about Romney's speech. But, you know, protectionism was the only reason he gave for believing that Trump would cause a recession, which I think is kind of telling: the GOP's supposedly well-informed, responsible adult, trying to save the party, can't get basic economics right at the one place where economics is central to his argument.
** http://www.voxeu.org/article/tale-two-depressions-what-do-new-data-tell-us-february-2010-updatehttp://krugman.blogs.nytimes.com/2013/10/01/the-gains-from-hyperglobalization-wonkish/anne -> anne... , Thursday, March 10, 2016 at 05:46 AM
October 1, 2013
The Gains From Hyperglobalization (Wonkish)
By Paul Krugman
Still taking kind of an emotional vacation from current political madness. Following up on my skeptical post on worries about slowing trade growth, * I wondered what a state-of-the-art model would say.
The natural model to use, at least for me, is Eaton-Kortum, ** which is a very ingenious approach to thinking about multilateral trade flows. The basic model is Ricardian - wine and cloth and labor productivity and all that - except that there are many goods and many countries, transportation costs, and countries are assumed to gain productivity in any particular industry through a random process. They make some funny assumptions about distributions - hey, that's kind of the price of entry for this kind of work - and in return get a tractable model that yields gravity-type equations for international trade flows. This is a good thing, because gravity models *** of trade - purely empirical exercises, with no real theory behind them - are known to work pretty well.
Their model also yields a simple expression for the welfare gains from trade:
Real income = A*(1-import share)^(-1/theta)
where A is national productivity and theta is a parameter of their assumed random process (don't ask); they suggest that theta=4 provides the best match to available data.
Now, what I wanted to do was apply this to the rapid growth of trade that has taken place since around 1990, what Subramanian **** calls "hyperglobalization". According to Subramanian's estimates, overall trade in goods and services has risen from about 19 percent of world GDP in the early 1990s to 33 percent now, bringing us to a level of integration that really is historically unprecedented.
There are some conceptual difficulties with using this rise directly in the Eaton-Kortum framework, because much of it has taken the form of trade in intermediate goods, and the framework isn't designed to handle that. Still, let me ignore that, and plug Subramanian's numbers into the equation above; I get a 4.9 percent rise in real incomes due to increased globalization.
That's by no means small change, but it's only a fairly small fraction of global growth. The Maddison database ***** gives us a 45 percent rise in global GDP per capita over the same period, so this calculation suggests that rising trade was responsible for around 10 percent of overall global growth. My guess is that most people who imagine themselves well-informed would give a bigger number.
By the way, for those critical of globalization, let me hasten to concede that by its nature the Eaton-Kortum model doesn't let us talk about income distribution, and it also makes no room for the possible role of globalization in causing secular stagnation. ******
Still, I thought this was an interesting calculation to make - which may show more about my warped sense of what's interesting than it does about anything else.
****** http://krugman.blogs.nytimes.com/2013/09/26/trade-and-secular-stagnation/http://www.nber.org/papers/w11764anne -> anne... , Thursday, March 10, 2016 at 05:46 AM
General Equilibrium Analysis of the Eaton-Kortum Model of International Trade
By Fernando Alvarez and Robert E. Lucas
We study a variation of the Eaton-Kortum model, a competitive, constant-returns-to-scale multicountry Ricardian model of trade. We establish existence and uniqueness of an equilibrium with balanced trade where each country imposes an import tariff. We analyze the determinants of the cross-country distribution of trade volumes, such as size, tariffs and distance, and compare a calibrated version of the model with data for the largest 60 economies. We use the calibrated model to estimate the gains of a world-wide trade elimination of tariffs, using the theory to explain the magnitude of the gains as well as the differential effect arising from cross-country differences in pre-liberalization of tariffs levels and country size.https://en.wikipedia.org/wiki/Gravity_model_of_tradeanne -> anne... , Thursday, March 10, 2016 at 05:47 AM
The gravity model of international trade in international economics, similar to other gravity models in social science, predicts bilateral trade flows based on the economic sizes (often using GDP measurements) and distance between two units. The model was first used by Jan Tinbergen in 1962.http://www.gcf.ch/wp-content/uploads/2013/06/GCF_Subramanian-working-paper-3_-6.17.13.pdfanne -> anne... , Thursday, March 10, 2016 at 05:56 AM
The Hyperglobalization of Trade and Its Future
By Arvind Subramanian and Martin Kessler
The open, rules-based trading system has delivered immense benefits-for the world, for individual countries, and for average citizens in these countries. It can continue to do so, helping today's low-income countries make the transition to middle-income status. Three challenges must be met to preserve this system. Rich countries must sustain the social consensus in favor of open markets and globalization at a time of considerable economic uncertainty and weakness; China and other middle-income countries must remain open; and mega-regionalism must be prevented from leading to discrimination and trade conflicts. Collective action should help strengthen the institutional underpinnings of globalization. The world should move beyond the Doha Round dead to more meaningful multilateral negotiations to address emerging challenges, including possible threats from new mega-regional agreements. The rising powers, especially China, will have a key role to play in resuscitating multilateralism.Real income = A*(1-import share)^(-1/theta)Peter K. : , Thursday, March 10, 2016 at 05:37 AM
[ Help! What does this mean in words? ]"Furthermore, as Mark Kleiman sagely observes, the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins"Peter K. -> Peter K.... , Thursday, March 10, 2016 at 05:41 AM
That was never the conventional case for trade. Plus it's kind of odd that you have to add "plus have the government redistribute" to the case your making.
Tom Pally above is correct. Krugman has been on the wrong side of this issue. He's gotten better, but the timing is he's gotten better as the Democratic Party has moved to the left and pushed back against corporate trade deals. Even Hillary came out late against Obama's TPP.
Sanders has nothing about ripping up trade deals. He has said he won't do any more.
As cawley predicted, once Sanders won Michigan, Krugman started hitting him again at his blog. With cheap shots I might add. He's ruining his brand.
'A Protectionist Moment?'pgl -> Peter K.... , Thursday, March 10, 2016 at 05:57 AM
So for Krugman, no doing corporate trade deals means you're "protectionist?"
It's a fair trade moment. As Dean Baker points out, corporate trade deals are protectionist:
Tell Morning Edition: It's Not "Free Trade" Folks
by Dean Baker
Published: 10 March 2016
Hey, can an experienced doctor from Germany show up and start practicing in New York next week? Since the answer is no, we can say that we don't have free trade. It's not an immigration issue, if the doctor wants to work in a restaurant kitchen, she would probably get away with it. We have protectionist measures that limit the number of foreign doctors in order to keep their pay high. These protectionist measures have actually been strengthened in the last two decades.
We also have strengthened patent and copyright protections, making drugs and other affected items far more expensive. These protections are also forms of protectionism.
This is why Morning Edition seriously misled its listeners in an interview with ice cream barons Ben Cohen and Jerry Greenfield over their support of Senator Bernie Sanders. The interviewer repeatedly referred to "free trade" agreements and Sanders' opposition to them. While these deals are all called "free trade" deals to make them sound more palatable ("selective protectionism to redistribute income upward" doesn't sound very appealing), that doesn't mean they are actually about free trade. Morning Edition should not have used the term employed by promoters to push their trade agenda.This has been Dean Baker's excellent theme for a very long time. And if you actually paid attention to what Krugman said about TPP - he agreed with Dean's excellent points. But do continue to set up straw man arguments so you can dishonestly attack Krugman.Peter K. -> pgl... , Thursday, March 10, 2016 at 06:06 AMSome of us have memories. Like Tom Palley up above.pgl -> Peter K.... , Thursday, March 10, 2016 at 06:42 AMMemories of things Krugman never wrote. In other words, very faulty memories.Julio -> pgl... , Thursday, March 10, 2016 at 09:07 AMNo. That is not a sign of a faulty memory, quite the contrary.Syaloch -> pgl... , Thursday, March 10, 2016 at 11:51 AM
Krugman writes column after column praising trade pacts and criticizing (rightly, I might add) the yahoos who object for the wrong reasons.
But he omits a few salient facts like
- the gains are small,
- the government MUST intervene with redistribution for this to work socially,
- there are no (or minimal) provisions for that requirement in the pacts.
I would say his omissions speak volumes and are worth remembering.Krugman initially wrote a confused column about the TPP, treating it as a simple free trade deal which he said would have little impact because tariffs were already so low. But he did eventually look into the matter further and wound up agreeing with Baker's take.pgl -> Peter K.... , Thursday, March 10, 2016 at 05:56 AM"That was never the conventional case for trade". Actually it was. Of course Greg Mankiw never got the memo so his free trade benefits all BS confuses a lot of people. Mankiw sucks at international trade.Peter K. -> pgl... , Thursday, March 10, 2016 at 06:11 AMActually it wasn't. I remember what Krugman and others wrote at the time about NAFTA and the WTO.jonny bakho -> Peter K.... , Thursday, March 10, 2016 at 06:26 AM
David Glasner attacks Krugman from the right, but he doesn't whitewash the past as you do. He remembers Gore versus Perot:
"Indeed, Romney didn't even mention the Smoot-Hawley tariff, but Krugman evidently forgot the classic exchange between Al Gore and the previous incarnation of protectionist populist outrage in an anti-establishment billionaire candidate for President:
GORE I've heard Mr. Perot say in the past that, as the carpenters says, measure twice and cut once. We've measured twice on this. We have had a test of our theory and we've had a test of his theory. Over the last five years, Mexico's tariffs have begun to come down because they've made a unilateral decision to bring them down some, and as a result there has been a surge of exports from the United States into Mexico, creating an additional 400,000 jobs, and we can create hundreds of thousands of more if we continue this trend. We know this works. If it doesn't work, you know, we give six months notice and we're out of it. But we've also had a test of his theory.
GORE In 1930, when the proposal by Mr. Smoot and Mr. Hawley was to raise tariffs across the board to protect our workers. And I brought some pictures, too.
[Larry] KING You're saying Ross is a protectionist?
GORE This is, this is a picture of Mr. Smoot and Mr. Hawley. They look like pretty good fellows. They sounded reasonable at the time; a lot of people believed them. The Congress passed the Smoot-Hawley Protection Bill. He wants to raise tariffs on Mexico. They raised tariffs, and it was one of the principal causes, many economists say the principal cause, of the Great Depression in this country and around the world. Now, I framed this so you can put it on your wall if you want to.
You can watch it here*
* https://uneasymoney com/2016/02/17/competitive-devaluation-plus-monetary-expansion-does-create-a-free-lunch/You obviously have not read Krugman. Here is from his 1997 Slate piece:pgl -> jonny bakho... , Thursday, March 10, 2016 at 06:44 AM
But putting Greenspan (or his successor) into the picture restores much of the classical vision of the macroeconomy. Instead of an invisible hand pushing the economy toward full employment in some unspecified long run, we have the visible hand of the Fed pushing us toward its estimate of the noninflationary unemployment rate over the course of two or three years. To accomplish this, the board must raise or lower interest rates to bring savings and investment at that target unemployment rate in line with each other.
And so all the paradoxes of thrift, widow's cruses, and so on become irrelevant. In particular, an increase in the savings rate will translate into higher investment after all, because the Fed will make sure that it does.
To me, at least, the idea that changes in demand will normally be offset by Fed policy--so that they will, on average, have no effect on employment--seems both simple and entirely reasonable. Yet it is clear that very few people outside the world of academic economics think about things that way. For example, the debate over the North American Free Trade Agreement was conducted almost entirely in terms of supposed job creation or destruction. The obvious (to me) point that the average unemployment rate over the next 10 years will be what the Fed wants it to be, regardless of the U.S.-Mexico trade balance, never made it into the public consciousness. (In fact, when I made that argument at one panel discussion in 1993, a fellow panelist--a NAFTA advocate, as it happens--exploded in rage: "It's remarks like that that make people hate economists!")
http://www.slate.com/articles/business/the_dismal_science/1996/10/economic_culture_wars.htmlYes. But please do not interrupt PeterK with reality. He has important work do with his bash all things Krugman agenda. BTW - it is a riot that he cites Ross Perot on NAFTA. Perot has a self centered agenda there which Gore exposed. Never trust a corrupt business person whether it is Perot or Trump.Peter K. -> pgl... , Thursday, March 10, 2016 at 07:42 AMDid you read what Al Gore said? He said nothing about the government redistributing the gains from NAFTA?Peter K. -> pgl... , Thursday, March 10, 2016 at 07:44 AM"But please do not interrupt PeterK with reality."jonny bakho -> pgl... , Thursday, March 10, 2016 at 07:47 AM
We are talking about the reality of Krugman's past support for free trade agreements.
You can't rewrite the past.Yes the model PeterK is using is unclear. He doesn't seem to have a grasp on the economics of the issues. He seems to think that Sanders is a font of economic wisdom who is not to be questioned. I would hate to see the left try to make a flawed candidate into the larger than life icon that the GOP has made out of Reagan.Peter K. -> jonny bakho... , Thursday, March 10, 2016 at 09:15 AM"Yes the model PeterK is using is unclear. He doesn't seem to have a grasp on the economics of the issues."Syaloch -> jonny bakho... , Thursday, March 10, 2016 at 12:19 PM
Dean Baker and Jared Bernstein. Like you I want full employment and rising wages. And like Krugman I am very much an internationalist. I want us to deal fairly with the rest of the world. We need to cooperate especially in the face of global warming.
1. My first, best solution would be fiscal action. Like everyone else. I prefer Sanders's unicorn plan of $1 trillion over five years rather than Hillary's plan which is one quarter of the size. Her plan puts more pressure on the Fed and monetary policy.
a. My preference would be to pay for it with Pigouvian taxes on the rich, corporations, and the financial sector.
b. if not a, then deficit spending like Trudeau in Canada
C. if the deficit hawks block that, then monetary-financing would be the way around them.
2. close the trade deficit. Dean Baker and Bernstein have written about this a lot. Write currency agreements into trade deals. If we close the trade deficit and are at full employment, then we can import more from the rest of the world.
3. If powerful interests block 1. and 2. then lean on monetary policy. Reduce the price of credit to boost demand. It works as a last resort.
"I would hate to see the left try to make a flawed candidate into the larger than life icon that the GOP has made out of Reagan.'
I haven't seen any evidence of this. It would be funny if the left made an old Jewish codger from Brooklyn into an icon. Feel the Bern!!!
Sanders regularly points out it's not about him as President fixing everything, it's about creating a movement. It's about getting people involved. He can't do it by himself. Obama would say this too. Elizabeth Warren become popular by saying the same things Sanders is saying.
The Compensation Principle certainly is part of standard Heckscher-Ohlin trade model, you can find it in any textbook:Peter K. -> jonny bakho... , Thursday, March 10, 2016 at 07:43 AM
However to say that the conventional case for trade liberalization relies on the Compensation Principle isn't quite accurate. The conventional case has traditionally relied on the assertion that "we" are better off with trade since we could *theoretically* distribute the gains. However, free trade boosters never seem to get around to worrying about distributing the gains *in practice*. In practice, free trade is typically justified simply by the net aggregate gain, regardless of how these gains are distributed or who is hurt in the process.
To my mind, before considering some trade liberalization deal we should FIRST agree to and implement the redistribution mechanisms and only then reduce barriers. Implementing trade deals in a backward, half-assed way as has typically been the case often makes "us" worse off than autarky.From Krugman's wikipedia article:pgl -> Peter K.... , Thursday, March 10, 2016 at 07:48 AM
"Krugman has at times advocated free markets in contexts where they are often viewed as controversial. He has ... likened the opposition against free trade and globalization to the opposition against evolution via natural selection (1996),
167 167 http://web.mit.edu/krugman/www/ricardo.htm
"Ricardo's difficult idea". Web.mit.edu. 1996. Retrieved 2011-10-04.Wikipedia. Now there is an unimpeachable source!Peter K. -> pgl... , Thursday, March 10, 2016 at 09:17 AMwhat's your alternative?Julio -> jonny bakho... , Thursday, March 10, 2016 at 09:10 AM(In fact, when I made that argument at one panel discussion in 1993, a fellow panelist--a NAFTA advocate, as it happens--exploded in rage: "It's remarks like that that make people hate economists!")Peter K. -> Julio ... , Thursday, March 10, 2016 at 09:20 AM
[Thanks to electoral politics, we're all fellow panelists now.]"To me, at least, the idea that changes in demand will normally be offset by Fed policy--so that they will, on average, have no effect on employment--seems both simple and entirely reasonable. Yet it is clear that very few people outside the world of academic economics think about things that way."Peter K. : , Thursday, March 10, 2016 at 06:04 AM
As we've seen the Fed is overly fearful of inflation, so the Fed doesn't offset the trade deficit as quickly as it should. Instead we suffer hysteresis and reduction of potential output.
"The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization - not because it's technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious."pgl -> Peter K.... , Thursday, March 10, 2016 at 06:09 AM
Here Krugman is more honest. We're basically buying off the Chinese, etc. The cost for stopping this would be less cooperation from the Chinese, etc.
This is new. He never used to say this kind of thing. Instead he'd go after "protectionists" as luddites."This is new. He never used to say this kind of thing. Instead he'd go after "protectionists" as luddites."Peter K. -> pgl... , Thursday, March 10, 2016 at 06:20 AM
You have Krugman confused with Greg Mankiw. Most real international economics (Mankiw is not one) recognize the distributional consequences of free trade v. protectionism. Then again - putting forth the Mankiw uninformed spin is a prerequisite for being on Team Republican. Of course Republicans will go protectionist whenever it is politically expedient as in that temporary set of steel tariffs. Helped Bush-Cheney in 2004 and right after that - no tariffs. Funny how that worked."Most real international economics (Mankiw is not one) recognize the distributional consequences of free trade v. protectionism."Peter K. -> Peter K.... , Thursday, March 10, 2016 at 06:22 AM
Obama and others don't defend the TPP that way. Krugman and Hillary don't support the TPP but only because the politics has shifted since the 1990s.
If Krugman wrote today as he did in the 1990s, he'd completely ruin his brand as liberal economist.
Where is the "redistribution from government" in the TPP. There isn't any.pgl -> Peter K.... , Thursday, March 10, 2016 at 06:46 AM
Even the NAFTA side agreements on labor and the environment are toothless. The point of these corporate trade deals is to profit from the lower labor and environmental standards of poorer countries.And where did I say TPP was a good thing? I have slammed TPP. And I never said NAFTA included this compensation thing. Nor did Mark Kleiman.pgl -> Peter K.... , Thursday, March 10, 2016 at 06:12 AM
But do continue to misrepresent what I and others have said. It is what you do.Hat tip to my Econospeak colleague Sandwichman for noting this from Krugman:Peter K. -> pgl... , Thursday, March 10, 2016 at 06:17 AM
Mark Thoma also noted this sympathy for the Luddites. But the professional Krugman haters have to deny he would write such things.The fact that you resort to calling me a professional Krugman hater means you're not interested in an actual debate about actual ideas. You've lost the debate and I'm not participating.pgl -> Peter K.... , Thursday, March 10, 2016 at 06:47 AM
One is not allowed to criticize Krugman lest one be labeled a professional Krugman hater?
Your resort to name calling just weakens the case you're making.You of late have wasted so much space misrepresenting what Krugman has said. Maybe you don't hate him - maybe you just want to get his attention. For a date maybe. Lord - the troll in you is truly out of control.Peter K. -> pgl... , Thursday, March 10, 2016 at 07:29 AMI have not misrepresented what Krugman has said.pgl -> Peter K.... , Thursday, March 10, 2016 at 07:49 AMWho wrote?Peter K. -> pgl... , Thursday, March 10, 2016 at 09:23 AM
"This is new. He never used to say this kind of thing. Instead he'd go after "protectionists" as luddites."
Did you even bother to read that link to what the Sandwichman posted? Didn't think so.Sandwichman's quote is from 2013. I'm talking about before that and especially in the 1990s.pgl -> Peter K.... , Thursday, March 10, 2016 at 10:34 AM
Sandwichman says the quote is notable because Krugman has changed his views. That proves my point.
Did you read it?
Sandwichman may think Krugman changed his views but if one actually read what he has written over the years (as opposed to your cherry picking quotes), you might have noticed otherwise. But of course you want Krugman to look bad. It is what you do.Syaloch -> pgl... , Thursday, March 10, 2016 at 12:31 PMKrugman's views have evolved quite a bit over the years. Can you envision today's Krugman singing the praises of cheap labor?Peter K. -> pgl... , Thursday, March 10, 2016 at 09:25 AM
In Praise of Cheap Labor (1997)Only recently he has begun to say that trade deals are part of diplomacy, like we're giving these countries something in order for them to cooperate.Peter K. -> Peter K.... , -1
If we didn't do these trade deals, these countries would cooperate less.
It's a legitimate point.
Aug 02, 2016 | crookedtimber.org
Glenn 08.02.16 at 5:01 pm
@William Meyer 08.02.16 at 4:41 pm
Legislators affiliated with the duopoly parties should not write the rules governing the ballot access of third parties. This exclusionary rule making amounts to preserving a self-dealing duopoly. Elections are the interest of the people who vote and those elected should not be able to subvert the democratic process by acting as a cartel.
Democracy demands that ballot access rules be selected by referendum, not by the very legacy parties that maintain legislative control by effectively denying ballot access to parties that will pose a challenge to their continued rule.
Of course any meaningful change would require a voluntary diminishment of power of the duopoly that now has dictatorial control over ballot access, and who will prevent any Constitutional Amendment that would enhance the democratic nature of the process.
bruce wilder 08.02.16 at 8:02 pm
I think the U.S. Party system, in the political science sense, shifted to a new state during George W Bush's administration as, in Kevin Phillip's terms the Republican Party was taken over by Theocrats and Bad Money.
Ronan(rf) 08.04.16 at 10:35 pm
"I generally don't give a shit about polls so I have no "data" to evidence this claim, but my guess is the majority of Trump's support comes from this broad middle"
My understanding is trumps support disproportionately comes from the small business owning classes, Ie a demographic similar to the petite bourgeoisie who have often been heavily involved in reactionary movements. This gets oversold as "working class" when class is defined by education level rather than income.
This would make some sense as they are generally in economically unstable jobs, they tend to be hostile to both big govt (regulations, freeloaders) and big business (unfair competition), and while they (rhetorically at least) tend to value personal autonomy and self sufficiency , they generally sell into smaller, local markets, and so are particularly affected by local demographic and cultural change , and decline. That's my speculation anyway.
bruce wilder 08.06.16 at 4:28 pm
I am somewhat suspicious of leaving dominating elites out of these stories of racism as an organizing principle for political economy or (cultural) community.
Racism served the purposes of a slaveholding elite that organized political communities to serve their own interests. (Or, vis a vis the Indians a land-grab or genocide.)
Racism serves as an organizing principle. Politically, in an oppressive and stultifying hierarchy like the plantation South, racism not incidentally buys the loyalty of subalterns with ersatz status. The ugly prejudices and resentful arrogance of working class whites is thus a component of how racism works to organize a political community to serve a hegemonic master class. The business end of racism, though, is the autarkic poverty imposed on the working communities: slaves, sharecroppers, poor blacks, poor whites - bad schools, bad roads, politically disabled communities, predatory institutions and authoritarian governments.
For a time, the balkanization of American political communities by race, religion and ethnicity was an effective means to the dominance of an tiny elite with ties to an hegemonic community, but it backfired. Dismantling that balkanization has left the country with a very low level of social affiliation and thus a low capacity to organize resistance to elite depredations.
bruce wilder 08.06.16 at 4:31 pm
Watching Clinton scoop up bankster money, welcome Republicans neocons to the ranks of her supporters does not fill me with hope.
Sep 04, 2016 | fpif.orgTrump and the other illiberal populists have been benefiting from three overlapping backlashes.
The first is cultural. Movements for civil liberties have been remarkably successful over the last 40 years. Women, ethnic and religious minorities, and the LGBTQ community have secured important gains at a legal and cultural level. It is remarkable, for instance, how quickly same-sex marriage has become legal in more than 20 countries when no country recognized it before 2001.
Resistance has always existed to these movements to expand the realm of civil liberties. But this backlash increasingly has a political face. Thus the rise of parties that challenge multiculturalism and immigration in Europe, the movements throughout Africa and Asia that support the majority over the minorities, and the Trump/Tea Party takeover of the Republican Party with their appeals to primarily white men.
The second backlash is economic. The globalization of the economy has created a class of enormously wealthy individuals (in the financial, technology, and communications sectors). But globalization has left behind huge numbers of low-wage workers and those who have watched their jobs relocate to other countries.
Illiberal populists have directed all that anger on the part of people left behind by the world economy at a series of targets: bankers who make billions, corporations that are constantly looking for even lower-wage workers, immigrants who "take away our jobs," and sometimes ethnic minorities who function as convenient scapegoats. The targets, in other words, include both the very powerful and the very weak.
The third backlash, and perhaps the most consequential, is political. It's not just that people living in democracies are disgusted with their leaders and the parties they represent. Rather, as political scientists Roberto Stefan Foa and Yascha Mounk write in the Journal of Democracy , "they have also become more cynical about the value of democracy as a political system, less hopeful that anything they do might influence public policy, and more willing to express support for authoritarian alternatives."
Foa and Mounk are using 20 years of data collected from surveys of citizens in Western Europe and North America – the democracies with the greatest longevity. And they have found that support for illiberal alternatives is greater among the younger generation than the older one. In other countries outside Europe and North America, the disillusionment with democratic institutions often takes the form of a preference for a powerful leader who can break the rules if necessary to preserve order and stability – like Putin in Russia or Abdel Fattah el-Sisi in Egypt or Prayuth Chan-ocha in Thailand.
These three backlashes – cultural, economic, political – are also anti-internationalist because international institutions have become associated with the promotion of civil liberties and human rights, the greater globalization of the economy, and the constraint of the sovereignty of nations (for instance, through the European Union or the UN's "responsibility to protect" doctrine).
... ... ....The current political order is coming apart. If we don't come up with a fair, Green, and internationalist alternative, the illiberal populists will keep winning. John Feffer is the director of Foreign Policy In Focus.
Aug 12, 2016 | crookedtimber.orgRich Puchalsky 08.12.16 at 4:15 pm 683"Once again, if neo-liberalism is partly defined by the free flow of goods, labor and capital - and that has been the Republican agenda since at least Reagan - how is Trump a continuation of the same tradition?"
You have to be willing to see neoliberalism as something different from conservatism to have the answer make any sense. John Quiggin has written a good deal here about a model of U.S. politics as being divided into left, neoliberal, and conservative. Trump is a conservative (or right populist, or whatever), and draws on that tradition. He's not a neoliberal.
... ... ...
T 08.12.16 at 5:52 pmRP @683
That's a bit of my point. I think Corey has defined the Republican tradition solely in response to the Southern Strategy that sees a line from Nixon (or Goldwater) to Trump. But that gets the economics wrong and the foreign policy too - the repub foreign policy view has not been consistent across administrations and Trump's economic pans (to the extent he has a plan) are antithetical to the Nixon – W tradition. I have viewed post-80 Dem administrations as neoliberals w/transfers and Repub as neoliberals w/o transfers.
Trump is too incoherent to really represent the populist view. He's consistent w/the trade and immigration views but (assuming you can actually figure him out) wrong on banks, taxes, etc.
But the next populists we see might be more full bore. When that happens, you'll see much more overlap w/Sanders economic plans for the middle class. Populists have nothing against gov't programs like SS and Medicare and were always for things like the TVA and infrastructure spending. Policies aimed at the poor and minorities not so much.
bruce wilder 08.12.16 at 7:47 pm 689T @ 685: Trump is too incoherent to really represent the populist view.
There's always tension along the lead running between the politician and his constituents. The thing that seems most salient to me at the present moment is the sense of betrayal pervading our politics. At least since the GFC of 2008, it has been hard to deny that the two Parties worked together to set up an economic betrayal. And, the long-running saga of the wars in Iraq and Afghanistan also speak to elite failure, as well as betrayal.
These are the two most unpopular candidates in living memory. That is different.
I am not a believer in "the fire next time". Trump is a novelty act. He represents a chance for people who feel resentful without knowing much of anything about anything to cast a middle-finger vote. They wouldn't be willing to do that, if times were really bad, instead of just disappointing and distressing.
Nor will Sanders be back. His was a last New Deal coda. There may be second acts in American life, but there aren't 7th acts.
If there's a populist politics in our future, it will have to have a much sharper edge. It can talk about growth, but it has to mean smashing the rich and taking their stuff. There's very rapidly going to come a point where there's no other option, other than just accepting cramdown by the authoritarian surveillance state built by the neoliberals. that's a much taller order than Sanders or Trump have been offering.<
Michael Sullivan 08.12.16 at 8:06 pm 690Corey, you write: "It's not just that the Dems went after Nixon, it's also that Nixon had so few allies. People on the right were furious with him because they felt after this huge ratification that the country had moved to the right, Nixon was still governing as if the New Deal were the consensus. So when the time came, he had very few defenders, except for loyalists like Leonard Garment and G. Gordon Liddy. And Al Haig, God bless him."
You've studied this more than I have, but this is at least somewhat at odds with my memory. I recall some prominent attackers of Nixon from the Republican party that were moderates, at least one of whom was essentially kicked out of the party for being too liberal in later years. There's also the fact Reagan tapped a fair number of Nixon people, as did W years later. Reagan went after Nixon in the sense of running against him, and taking the party in a much more hard-right direction, sure. But he was repudiated largely because he got caught doing dirty tricks with his pants down.
To think that something similar would happen to Clinton (watergate like scandal) that would actually have a large portion of the left in support of impeachment, she would have to be as dirty as Nixon was, *and* the evidence to really put the screws to her would have to be out, as it was against Nixon during watergate.
OTOH, my actual *hope* would be that a similar left-liberal sea change comparable to 1980 from the right would be plausible. I don't think a 1976-like interlude is plausible though, that would require the existence of a moderate republican with enough support within their own party to win the nomination. I suppose its possible that such a beast could come to exist if Trump loses a landslide, but most of the plausible candidates have already left or been kicked out of the party.
From what I can tell - the 1972 election gave the centrists in the democratic party power to discredit and marginalize the anti-war left, and with it, the left in general. A comparable election from the other side would give republican centrists/moderates the ability to discredit and marginalize the right wing base. But unlike Democrats in 1972, there aren't any moderates left in the Republican party by my lights. I'm much more concerned that this will simply re-empower the hard-core conservatives with plausbly-deniable dog-whistle racism who are now the "moderates", and enable them to whitewash their history.
Unfortunately, unlike you, I'm not convinced that a landslide is possible without an appeal to Reagan/Bush republicans. I don't think we're going to see a meaningful turn toward a real left until Democrats can win a majority of statehouses and clean up the ridiculous gerrymandering.
Rich Puchalsky 08.12.16 at 9:18 pmVal: "Similarly with your comments on "identity politics" where you could almost be seen by MRAs and white supremacists as an ally, from the tone of your rhetoric."
That is 100% perfect Val. Insinuates that BW is a sort-of-ally of white supremacists - an infuriating insinuation. Does this insinuation based on a misreading of what he wrote. Completely resistant to any sort of suggestion that what she dishes out so expansively to others had better be something she should be willing to accept herself, or that she shouldn't do it. Ready even now to whine that she's a victim and that the whole community is at fault and that people are picking on her because she's a woman, rather than because she has a habit of making accusations like this every time she comments.
That is a perfect example of predatory "solidarity". Val is looking for dupes to support her - for people to jump in saying "Why are you being hostile to women?" in response to people's response to her comment.
Aug 12, 2016 | www.theamericanconservative.com
"I'm afraid the election is going to be rigged," Donald Trump told voters in Ohio and Sean Hannity on Fox News. And that hit a nerve.
"Dangerous," "toxic," came the recoil from the media.
Trump is threatening to "delegitimize" the election results of 2016.
Well, if that is what Trump is trying to do, he has no small point. For consider what 2016 promised and what it appears about to deliver.
This longest of election cycles has rightly been called the Year of the Outsider. It was a year that saw a mighty surge of economic populism and patriotism, a year when a 74-year-old Socialist senator set primaries ablaze with mammoth crowds that dwarfed those of Hillary Clinton.
It was the year that a non-politician, Donald Trump, swept Republican primaries in an historic turnout, with his nearest rival an ostracized maverick in his own Republican caucus, Senator Ted Cruz.
More than a dozen Republican rivals, described as the strongest GOP field since 1980, were sent packing. This was the year Americans rose up to pull down the establishment in a peaceful storming of the American Bastille.
But if it ends with a Clintonite restoration and a ratification of the same old Beltway policies, would that not suggest there is something fraudulent about American democracy, something rotten in the state?
If 2016 taught us anything, it is that if the establishment's hegemony is imperiled, it will come together in ferocious solidarity - for the preservation of their perks, privileges and power. All the elements of that establishment - corporate, cultural, political, media - are today issuing an ultimatum to Middle America: Trump is unacceptable. Instructions are going out to Republican leaders that either they dump Trump, or they will cease to be seen as morally fit partners in power.
It testifies to the character of Republican elites that some are seeking ways to carry out these instructions, though this would mean invalidating and aborting the democratic process that produced Trump.
But what is a repudiated establishment doing issuing orders to anyone?
Why is it not Middle America issuing the demands, rather than the other way around?
Specifically, the Republican electorate should tell its discredited and rejected ruling class: If we cannot get rid of you at the ballot box, then tell us how, peacefully and democratically, we can be rid of you?
You want Trump out? How do we get you out? The Czechs had their Prague Spring. The Tunisians and Egyptians their Arab Spring. When do we have our American Spring? The Brits had their "Brexit," and declared independence of an arrogant superstate in Brussels. How do we liberate ourselves from a Beltway superstate that is more powerful and resistant to democratic change?
Our CIA, NGOs and National Endowment for Democracy all beaver away for "regime change" in faraway lands whose rulers displease us. How do we effect "regime change" here at home?
Donald Trump's success, despite the near-universal hostility of the media, even much of the conservative media, was due in large part to the public's response to the issues he raised.
- He called for sending illegal immigrants back home, for securing America's borders, for no amnesty. He called for an America First foreign policy to keep us out of wars that have done little but bleed and bankrupt us.
- He called for an economic policy where the Americanism of the people replaces the globalism of the transnational elites and their K Street lobbyists and congressional water carriers.
- He denounced NAFTA, and the trade deals and trade deficits with China, and called for rejection of the Trans-Pacific Partnership.
By campaign's end, he had won the argument on trade, as Hillary Clinton was agreeing on TPP and confessing to second thoughts on NAFTA.
But if TPP is revived at the insistence of the oligarchs of Wall Street, the Business Roundtable, the U.S. Chamber of Commerce - backed by conscript editorial writers for newspapers that rely on ad dollars - what do elections really mean anymore?
And if, as the polls show we might, we get Clinton - and TPP, and amnesty, and endless migrations of Third World peoples who consume more tax dollars than they generate, and who will soon swamp the Republicans' coalition - what was 2016 all about?
Would this really be what a majority of Americans voted for in this most exciting of presidential races?
"Those who make peaceful revolution impossible will make violent revolution inevitable," said John F. Kennedy.
The 1960s and early 1970s were a time of social revolution in America, and President Nixon, by ending the draft and ending the Vietnam war, presided over what one columnist called the "cooling of America."
But if Hillary Clinton takes power, and continues America on her present course, which a majority of Americans rejected in the primaries, there is going to be a bad moon rising.
And the new protesters in the streets will not be overprivileged children from Ivy League campuses.
Patrick J. Buchanan is a founding editor of The American Conservative and the author of book The Greatest Comeback: How Richard Nixon Rose From Defeat to Create the New Majority .
Sep 07, 2016 | www.theamericanconservative.com
Since the Cold War ended, U.S. politics has seen a series of insurgent candidacies. Pat Buchanan prefigured Trump in the Republican contests of 1992 and 1996. Ralph Nader challenged the Clinton wing of the Democratic Party from the outside in 2000. Ron Paul vexed establishment Republicans John McCain and Mitt Romney in 2008 and 2012. And this year, Trump was not the only candidate to confound his party's elite: Bernie Sanders harried Hillary Clinton right up to the Democratic convention.
What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy. All have opposed large-scale free-trade agreements. (The libertarian Paul favors unilateral free trade: by his lights, treaties like NAFTA and the Trans-Pacific Partnership are not free trade at all but international regulatory pacts.) And while no one would mistake Ralph Nader's or Ron Paul's views on immigration for Pat Buchanan's or Donald Trump's, Nader and Paul have registered their own dissents from the approach to immigration that prevails in Washington.
Sanders has been more in line with his party's orthodoxy on that issue. But that didn't save him from being attacked by Clinton backers for having an insufficiently nonwhite base of support. Once again, what might have appeared to be a class conflict-in this case between a democratic socialist and an elite liberal with ties to high finance-could be explained away as really about race.
Race, like religion, is a real factor in how people vote. Its relevance to elite politics, however, is less clear. Something else has to account for why the establishment in both parties almost uniformly favors one approach to war, trade, and immigration, while outsider candidates as dissimilar as Buchanan, Nader, Paul, and Trump, and to a lesser extent Sanders, depart from the consensus.
The insurgents clearly do not represent a single class: they appeal to eclectic interests and groups. The foe they have all faced down, however-the bipartisan establishment-does resemble a class in its striking unity of outlook and interest. So what is this class, effectively the ruling class of the country?
Some critics on the right have identified it with the "managerial" class described by James Burnham in his 1941 book The Managerial Revolution . But it bears a stronger resemblance to what what others have called "the New Class." In fact, the interests of this New Class of college-educated "verbalists" are antithetical to those of the industrial managers that Burnham described. Understanding the relationship between these two often conflated concepts provides insight into politics today, which can be seen as a clash between managerial and New Class elites.
The archetypal model of class conflict, the one associated with Karl Marx, pits capitalists against workers-or, at an earlier stage, capitalists against the landed nobility. The capitalists' victory over the nobility was inevitable, and so too, Marx believed, was the coming triumph of the workers over the capitalists.
Over the next century, however, history did not follow the script. By 1992, the Soviet Union was gone, Communist China had embarked on market reforms, and Western Europe was turning away from democratic socialism. There was no need to predict the future; mankind had achieved its destiny, a universal order of [neo]liberal democracy. Marx had it backwards: capitalism was the end of history.
But was the truth as simple as that? Long before the collapse of the USSR, many former communists -- some of whom remained socialists, while others joined the right-thought not. The Soviet Union had never been a workers' state at all, they argued, but was run by a class of apparatchiks such as Marx had never imagined.
Among the first to advance this argument was James Burnham, a professor of philosophy at New York University who became a leading Trotskyist thinker. As he broke with Trotsky and began moving toward the right, Burnham recognized affinities between the Soviet mode of organization-in which much real power lay in the hands of the commissars who controlled industry and the bureaucratic organs of the state-and the corporatism that characterized fascist states. Even the U.S., under the New Deal and with ongoing changes to the balance between ownership and management in the private sector, seemed to be moving in the same direction.
Burnham called this the "managerial revolution." The managers of industry and technically trained government officials did not own the means of production, like the capitalists of old. But they did control the means of production, thanks to their expertise and administrative prowess.
The rise of this managerial class would have far-reaching consequences, he predicted. Burnham wrote in his 1943 book, The Machiavellians : "that the managers may function, the economic and political structure must be modified, as it is now being modified, so as to rest no longer on private ownership and small-scale nationalist sovereignty, but primarily upon state control of the economy, and continental or vast regional world political organization." Burnham pointed to Nazi Germany, imperial Japan-which became a "continental" power by annexing Korea and Manchuria-and the Soviet Union as examples.
The defeat of the Axis powers did not halt the progress of the managerial revolution. Far from it: not only did the Soviets retain their form of managerialism, but the West increasingly adopted a managerial corporatism of its own, marked by cooperation between big business and big government: high-tech industrial crony capitalism, of the sort that characterizes the military-industrial complex to this day. (Not for nothing was Burnham a great advocate of America's developing a supersonic transport of its own to compete with the French-British Concorde.)
America's managerial class was personified by Robert S. McNamara, the former Ford Motor Company executive who was secretary of defense under John F. Kennedy and Lyndon Johnson. In a 1966 story for National Review , "Why Do They Hate Robert Strange McNamara?" Burnham answered the question in class terms: "McNamara is attacked by the Left because the Left has a blanket hatred of the system of business enterprise; he is criticized by the Right because the Right harks back, in nostalgia if not in practice, to outmoded forms of business enterprise."
McNamara the managerial technocrat was too business-oriented for a left that still dreamed of bringing the workers to power. But the modern form of industrial organization he represented was not traditionally capitalist enough for conservatives who were at heart 19th-century classical liberals.
National Review readers responded to Burnham's paean to McNamara with a mixture of incomprehension and indignation. It was a sign that even readers familiar with Burnham-he appeared in every issue of the magazine-did not always follow what he was saying. The popular right wanted concepts that were helpful in labeling enemies, and Burnham was confusing matters by talking about changes in the organization of government and industry that did not line up with anyone's value judgements.
More polemically useful was a different concept popularized by neoconservatives in the following decade: the "New Class." "This 'new class' is not easily defined but may be vaguely described," Irving Kristol wrote in a 1975 essay for the Wall Street Journal :
It consists of a goodly proportion of those college-educated people whose skills and vocations proliferate in a 'post-industrial society' (to use Daniel Bell's convenient term). We are talking about scientists, teachers, and educational administrators, journalists and others in the communication industries, psychologists, social workers, those lawyers and doctors who make their careers in the expanding public sector, city planners, the staffs of the larger foundations, the upper levels of the government bureaucracy, and so on.
"Members of the new class do not 'control' the media," he continued, "they are the media-just as they are our educational system, our public health and welfare system, and much else."
Burnham, writing in National Review in 1978, drew a sharp contrast between this concept and his own ideas:
I have felt that this 'new class' is, so far, rather thin gruel. Intellectuals, verbalists, media types, etc. are conspicuous actors these days, certainly; they make a lot of noise, get a lot of attention, and some of them make a lot of money. But, after all, they are a harum-scarum crowd, and deflate even more quickly than they puff up. On TV they can out-talk any of the managers of ITT, GM, or IBM, or the administration-managers of the great government bureaus and agencies, but, honestly, you're not going to take that as a power test. Who hires and fires whom?
Burnham suffered a stroke later that year. Although he lived until 1987, his career as a writer was over. His last years coincided with another great transformation of business and government. It began in the Carter administration, with moves to deregulate transportation and telecommunications. This partial unwinding of the managerial revolution accelerated under Ronald Reagan. Regulatory and welfare-state reforms, even privatization of formerly nationalized industries, also took off in the UK and Western Europe. All this did not, however, amount to a restoration of the old capitalism or anything resembling laissez-faire.
The "[neo]liberal democracy" that triumphed at "the end of history"-to use Francis Fukuyama's words-was not the managerial capitalism of the mid-20th century, either. It was instead the New Class's form of capitalism, one that could be embraced by Bill Clinton and Tony Blair as readily as by any Republican or Thatcherite.
Irving Kristol had already noted in the 1970s that "this new class is not merely liberal but truly 'libertarian' in its approach to all areas of life-except economics. It celebrates individual liberty of speech and expression and action to an unprecedented degree, so that at times it seems almost anarchistic in its conception of the good life."
He was right about the New Class's "anything goes" mentality, but he was only partly correct about its attitude toward economics. The young elite tended to scorn the bourgeois character of the old capitalism, and to them managerial figures like McNamara were evil incarnate. But they had to get by-and they aspired to rule.
Burnham had observed that the New Class did not have the means-either money or manpower-to wield power the way the managers or the capitalists of old did. It had to borrow power from other classes. Discovering where the New Class gets it is as easy as following the money, which leads straight to the finance sector-practically to the doorstep of Goldman Sachs. Jerry Rubin's journey from Yippie to yuppie was the paradigm of a generation.
Part of the tale can be told in a favorable light. New Left activists like Carl Oglesby fought the spiritual aridity and murderous militarism of what they called "corporate liberalism"-Burnham's managerialism-while sincere young libertarians attacked the regulatory state and seeded technological entrepreneurship. Yet the New Class as a whole is less like Carl Oglesby or Karl Hess than like Hillary Clinton, who arguably embodies it as perfectly as McNamara did the managerial class.
Even the New Class's support for deregulation-to the advantage of its allies on Wall Street-was no sign of consistent commitment to free-market principles. On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would benefit hard industry and managerial interests. The individual-mandate feature of Obamacare and Romneycare is a prime example of New Class cronyism: government compels individuals to buy a supposedly private product or service.
The alliance between finance and the New Class accounts for the disposition of power in America today. The New Class has also enlisted another invaluable ally: the managerial classes of East Asia. Trade with China-the modern managerial state par excellence-helps keep American industry weak relative to finance and the service economy's verbalist-dominated sectors. America's class war, like many others, is not in the end a contest between up and down. It's a fight between rival elites: in this case, between the declining managerial elite and the triumphant (for now) New Class and financial elites.
The New Class plays a priestly role in its alliance with finance, absolving Wall Street for the sin of making money in exchange for plenty of that money to keep the New Class in power. In command of foreign policy, the New Class gets to pursue humanitarian ideological projects-to experiment on the world. It gets to evangelize by the sword. And with trade policy, it gets to suppress its class rival, the managerial elite, at home. Through trade pacts and mass immigration the financial elite, meanwhile, gets to maximize its returns without regard for borders or citizenship. The erosion of other nations' sovereignty that accompanies American hegemony helps toward that end too-though our wars are more ideological than interest-driven.
So we come to an historic moment. Instead of an election pitting another Bush against another Clinton, we have a race that poses stark alternatives: a choice not only between candidates but between classes-not only between administrations but between regimes.
Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan establishment, even if he goes down to defeat in November.
The New Class, after all, lacks a popular base as well as money of its own, and just as it relies on Wall Street to underwrite its power, it depends on its competing brands of identity politics to co-opt popular support. For the center-left establishment, minority voters supply the electoral muscle. Religion and the culture war have served the same purpose for the establishment's center-right faction. Trump showed that at least one of these sides could be beaten on its own turf-and it seems conceivable that if Bernie Sanders had been black, he might have similarly beaten Clinton, without having to make concessions to New Class tastes.
The New Class establishment of both parties may be seriously misjudging what is happening here. Far from being the last gasp of the demographically doomed-old, racially isolated white people, as Gallup's analysis says-Trump's insurgency may be the prototype of an aggressive new politics, of either left or right, that could restore the managerial elite to power.
This is not something that conservatives-or libertarians who admire the old capitalism rather than New Class's simulacrum-might welcome. But the only way that some entrenched policies may change is with a change of the class in power.
Daniel McCarthy is the editor of The American Conservative .Johann , says: September 7, 2016 at 10:02 amThe New Class is parasitic and will drive the country to its final third world resting place, or worse.Dan Phillips , says: September 7, 2016 at 11:32 amExcellent analysis. What is important about the Trump phenomenon is not every individual issue, it's the potentially revolutionary nature of the phenomenon. The opposition gets this. That's why they are hysterical about Trump. The conservative box checkers do not.g , says: September 7, 2016 at 11:51 am"Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan establishment, even if he goes down to defeat in November."Richard Terrace , says: September 7, 2016 at 12:09 pm
My question is, if Trump is not himself of the managerial class, in fact, could be considered one of the original new class members, how would he govern? What explains his conversion from the new class to the managerial class; is he merely taking advantage of an opportunity or is there some other explanation?I'm genuinely confused by the role you ascribe to the 'managerial class' here. Going back to Berle and Means ('The Modern Corporation and Private Property') the managerial class emerged when management was split from ownership in mid C20th capitalism. Managers focused on growth, not profits for shareholders. The Shareholder revolution of the 1980s destroyed the managerial class, and destroyed their unwieldy corporations.JonF , says: September 7, 2016 at 1:13 pm
You seem to be identifying the managerial class with a kind of cultural opposition to the values of [neo]liberal capitalism. And instead of identifying the 'new class' with the new owner-managers of shareholder-driven firms, you identify them by their superficial cultural effects.
This raises a deeper problem in how you talk about class in this piece. Marx taught that you identify classes by their structural role in the system of production. I'm at a loss to see how either of the 'classes' you mention here relate to the system of production. Does the 'new class' of journalists, academics, etc. actually own anything? If not, what is the point of ascribing to them immense economic power?
I would agree that there is a new class of capitalists in America. But they are well known people like Sheldon Adelson, the Kochs, Linda McMahon, the Waltons, Rick Scott the pharmaceutical entrepreneur, Mitt Romney, Mark Zuckerberg, and many many hedge fund gazillionaires. These people represent the resurgence of a family-based, dynastic capitalism that is utterly different from the managerial variety that prevailed in mid-century.
If there is a current competitor to international corporate capitalism, it is old-fashioned dynastic family capitalism. Not Managerialism.There is no "new class". That's simply a derogatory trope of the Right. The [neo]liberal elite– educated, cosmopolitan and possessed of sufficient wealth to be influential in political affairs and claims to power grounded in moral stances– have a long pedigree in both Western and non-Western lands. They were the Scribal Class in the ancient world, the Mandarins of China, and the Clergy in the Middle Ages. This class for a time was eclipsed in the early modern period as first royal authority became dominant, followed by the power of the Capitalist class (the latter has never really faded of course). But their reemergence in the late 20th century is not a new or unique phenomenon.Kurt Gayle , says: September 7, 2016 at 2:03 pmIn a year in which "trash Trump" and "trash Trump's supporters" are tricks-to-be-turned for more than 90% of mainstream journalists and other media hacks, it's good to see Daniel McCarthy buck the "trash trend" and write a serious, honest analysis of the class forces that are colliding during this election cycle.lee , says: September 7, 2016 at 2:37 pm
Two thumbs way up for McCarthy, although his fine effort cannot save the reputation of those establishment whores who call themselves journalists. Nothing can save them. They have earned the universality with which Americans hold them in contempt.
In 1976 when Gallup began asking about "the honesty and ethical standards" of various professions only 33% of Americans rated journalists "very high or high."
By last December that "high or very high" rating for journalists had fallen to just 27%.
It is certain that by Election Day 2016 the American public's opinion of journalists will have fallen even further.An article on the ruling elite that neglects to mention this ? . . . https://www.amazon.com/Revolt-Elites-Betrayal-Democracy/dp/0393313719david helveticka , says: September 7, 2016 at 3:24 pmMost of your argument is confusing. The change I see is from a production economy to a finance economy. Wall Street rules, really. Basically the stock market used to be a place where working folk invested their money for retirement, mostly through pensions from unions and corporations. Now it's become a gambling casino, with the "house"-or the big banks-putting it's finger on the roulette wheel. They changed the compensation package of CEO's, so they can rake in huge executive compensation–mostly through stock options-to basically close down everything from manufacturing to customer service, and ship it off to contract manufacturers and outside services in oligarchical countries like mainland China and India.Sheree , says: September 7, 2016 at 6:16 pm
I don't know what exactly you mean about the "new class", basically its the finance industry against everyone else.
One thing you right-wingers always get wrong, is on Karl Marx he was really attacking the money-changers, the finance speculators, the banks. Back in the day, so-called "capitalists" like Henry Ford or George Eastman or Thomas Edison always complained about the access to financing through the big money finance capitalists.Don't overlook the economic value of intellectual property rights (patents, in particular) in the economic equation.Commenter Man , says: September 7, 2016 at 10:19 pm
A big chunk of the 21st century economy is generated due to the intellectual property developed and owned by the New Class and its business enterprises.
The economic value of ideas and intellectual property rights is somewhat implied in McCarthy's explanation of the New Class, but I didn't see an explicit mention (perhaps I overlooked it).
I think the consideration of intellectual property rights and the value generated by IP might help to clarify the economic power of the New Class for those who feel the analysis isn't quite complete or on target.
I'm not saying that IP only provides value to the New Class. We can find examples of IP throughout the economy, at all levels. It's just that the tech and financial sectors seem to focus more on (and benefit from) IP ownership, licensing, and the information captured through use of digital technology."What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy."Wayne Lusvardi , says: September 7, 2016 at 10:37 pm
But today we have this: Trump pledges big US military expansion . Trump doesn't appear to have any coherent policy, he just says whatever seems to be useful at that particular moment.[New] Class better describes the Never Trumpers. Mostly I have found them to be those involved in knowledge occupations (conservative think tanks, hedge fund managers, etc.) who have a pecuniary interest in maintaining the Global Economy as opposed to the Virtuous Intergenerational Economy that preceded. Many are dependent on funding sources for their livelihoods that are connected to the Globalized Economy and financial markets.jack , says: September 7, 2016 at 11:13 pm"mobilize working-class voters against the establishment in both parties. " = workers of the world unite.Wayne Lusvardi , says: September 7, 2016 at 11:33 pm
maybe Trump could use thatBeing white is not the defining characteristic of Trumpers because it if was then how come there are many white working class voters for Hillary? The divide in the working class comes from being a member of a union or a member of the private non-unionized working class.Mitzy Moon , says: September 8, 2016 at 12:32 am
Where the real class divide shows up is in those who are members of the Knowledge Class that made their living based on the old Virtuous Economy where the elderly saved money in banks and the banks, in turn, lent that money out to young families to buy houses, cars, and start businesses. The Virtuous Economy has been replaced by the Global Economy based on diverting money to the stock market to fund global enterprises and prop up government pension funds.
The local bankers, realtors, private contractors, small savers and small business persons and others that depended on the Virtuous Economy lost out to the global bankers, stock investors, pension fund managers, union contractors and intellectuals that propounded rationales for the global economy as superior to the Virtuous Economy.
Where the class conflict between the Working and Knowledge Classes begins is where the Knowledge Class almost unilaterally decided to shift to a global economy, at the expense of the Working Class, and to the self-benefit of the Knowledge Class. Those who designed the Global Economy like Larry Summers of Harvard did not invite private or public labor to help design the new Globalist Economy. The Working Class lost out big time in job losses and getting stuck with subprime home loans that busted their marriages and created bankruptcies and foreclosures. The Knowledge Class was mostly unscathed by this class-based economic divide.Beginning in the 50's and 60's, baby boomers were warned in school and cultural media that "a college diploma would become what a high school diploma is today." An extraordinary cohort of Americans took this advice seriously, creating the smartest and most successful generation in history. But millions did not heed that advice, cynically buoyed by Republicans who – knowing that college educated people vote largely Democrat – launched a financial and cultural war on college education. The result is what you see now: millions of people unprepared for modern employment; meanwhile we have to import millions of college-educated Asians and Indians to do the work there aren't enough Americans to do.Joe , says: September 8, 2016 at 1:25 amHave to say, this seems like an attempt to put things into boxes that don't quite fit.Emil Mottola , says: September 8, 2016 at 2:15 am
Trump's distinguishing ideology, which separates him from the current elite, is something he has summed up many times – nationalism vs. Globalism.
The core of it is that the government no longer serves the people. In the United States, that is kind of a bad thing, you know? Like the EU in the UK, the people, who fought very hard for self-government, are seeing it undermined by the erosion of the nation state in favor of international beaurocracy run by elites and the well connected.Both this article and many comments on it show considerable confusion, and ideological opinion all over the map. What is happening I think is that the world is changing –due to globalism, technology, and the sheer huge numbers of people on the planet. As a result some of the rigid trenches of thought as well as class alignments are breaking down.EliteCommInc. , says: September 8, 2016 at 3:29 am
In America we no longer have capitalism, of either the 19th century industrial or 20th century managerial varieties. Money and big money is still important of course, but it is increasingly both aligned with and in turn controlled by the government. The financial industry, the new tech giants, the health insurance industry are now almost indistinguishable from the government ruling elite. The old left–represented by Sanders–rails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right in a sense.
The hyperconcentration of power in Washington and a few tributary locations like Wall Street and Silicon Valley, elite academia and the media–call that the New Class if you like–means that most of America–Main Street, the flyover country has been left behind. Trump instinctively – brilliantly in some ways – tapped into the resentment that this hyperconcentration of wealth and government power has led to. That is why it cuts across right and left. The elites want to characterize this resentment as backwards and "racist," but there is also something very American from Jefferson to Jackson to Teddy Roosevelt that revolts against being lectured to and controlled by their would-be "betters."
The alienation of those left out is real and based on real erosion of the middle class and American dream under both parties' elites. The potentially revolutionary capabilities of a political movement that could unite right and left in restoring some equilibrium and opportunities to those left out is tremendous, but yet to be realized by either major party. The party that can harness these folks – who are after all the majority of Americans – will have a ruling coalition for decades. If neither party can productively harness this budding movement, we are headed for disarray, civil unrest, and potentially the dissolution of the USA.I have one condition about which, Mr. Trump would lose my support - if he flinches on immigration, I will have to bow out.Wayne Lusvardi , says: September 8, 2016 at 5:36 am
I just don't buy the contentions about color here. He has made definitive moves to ensure that he intends to fight for US citizens regardless of color. This nonsense about white racism, more bigotry in reality, doesn't pan out. The Republican party has been comprised of mostly whites since forever and nearly all white sine the late 1960's. Anyone attempting to make hay out of what has been the reality for than 40 years is really making the reverse pander. Of course most of those who have issues with blacks and tend to be more expressive about it, are in the Republican party. But so what. Black Republicans would look at you askance, should you attempt this FYI.
It's a so what. The reason you joining a party is not because the people in it like you, that is really beside the point. Both Sec Rice and General Powell, are keenly aware of who's what it and that is the supposed educated elite. They are not members of the party because it is composed of some pure untainted membership. But because they and many blacks align themselves with the ideas of the party, or what the party used to believe, anyway.
It's the issues not their skin color that matters. And blacks who cleave to the democrats despite being sold down the tubes on issues, well, for whatever reason, they just have thinner skin and the mistaken idea that the democrats deliver – thanks to Pres. Johnson. But what Pres. Johnson delivered democrats made a mockery of immediately as they stripped it of its intent and used for their own liberal ends.
I remain convinced that if blacks wanted progress all they need do is swamp the Republican party as constituents and confront whatever they thought was nonsense as constituents as they move on policy issues. Goodness democrats have embraced the lighter tones despite having most black support. That is why the democrats are importing so many from other state run countries. They could ignore blacks altogether. Sen Barbara Jordan and her deep voiced rebuke would do them all some good.
Let's face it - we are not going to remove the deeply rooted impact of skin color, once part of the legal frame of the country for a quarter of the nations populous. What Republicans should stop doing is pretending, that everything concerning skin color is the figment of black imagination. I am not budging an inch on the Daughters of the American Revolution, a perfect example of the kind of peculiar treatment of the majority, even to those who fought for Independence and their descendants.
I think that there are thousands and thousands of educated (degreed)people who now realize what a mess the educational and social services system has become because of our immigration policy. The impact on social services here in Ca is no joke. In the face of mounting deficits, the laxity of Ca has now come back to haunt them. The pressure to increase taxes weighed against the loss of manual or hard labor to immigrants legal and otherwise is unmistakable here. There's debate about rsstroom etiquette in the midst of serious financial issues - that's a joke. So this idea of dismissing people with degrees as being opposed to Mr. Trump is deeply overplayed and misunderstood. If there is a class war, it's not because of Mr. Trump, those decks were stacked in his favor long before the election cycle.
"But millions did not heed that advice, cynically buoyed by Republicans who–knowing that college educated people vote largely Democrat–launched a financial and cultural war on college education. The result is what . . . employment; meanwhile we have to import millions of college-educated Asians and Indians to do the work there aren't enough Americans to do."
Nope. Republicans are notorious for pushing education on everything and everybody. It's a signature of hard work, self reliance, self motivation and responsibility. The shift that has been tragic is that conservatives and Republicans either by a shove or by choice abandoned the fields by which we turn out most future generations - elementary, HS and college education. Especially in HS, millions of students are fed a daily diet of liberal though unchecked by any opposing ideas. And that is become the staple for college education - as it cannot be stated just how tragic this has become for the nation. There are lots of issues to moan about concerning the Us, but there is far more to embrace or at the very least keep the moaning in its proper context. No, conservatives and Republicans did engage in discouraging an education.
And there will always be a need for more people without degrees than with them. even people with degrees are now getting hit even in the elite walls of WS finance. I think I posted an article by John Maulden about the growing tensions resulting fro the shift in the way trading is conducting. I can build a computer from scratch, that's a technical skill, but the days of building computers by hand went as fast it came. The accusation that the population should all be trained accountants, book keepers, managers, data processors, programmers etc. Is nice, but hardly very realistic (despite my taking liberties with your exact phrasing). A degree is not going to stop a company from selling and moving its production to China, Mexico or Vietnam - would that were true. In fact, even high end degree positions are being outsourced, medicine, law, data processing, programming . . .
How about the changes in economy that have forced businesses to completely disappear. We will never know how many businesses were lost in the 2007/2008 financial mess. Recovery doesn't exist until the country's growth is robust enough to put people back to work full time in a manner that enables them to sustain themselves and family.
That income gap is real and its telling.
even if I bought the Karl Marx assessment. His solutions were anything but a limited assault on financial sector oligarchs and wizards. And in practice it has been an unmitigated disaster with virtually not a single long term national benefit. It's very nature has been destructive, not only to infrastructure, but literally the lifeblood of the people it was intended to rescue.Let's see if I can help Dreher clear up some confusion in his article. James Burnham's "Managerial Class" and the "New Class" are overlapping and not exclusive. By the Managerial Class Burnham meant both the executive and managers in the private sector and the Bureaucrats and functionaries in the public sector.William Burns , says: September 8, 2016 at 5:45 am
There are two middle classes in the US: the old Business Class and the New Knowledge Class. A manager would be in the Business Class and a Bureaucrat in the New Class.
The rise of managers was a "revolution" because of the rise of modernization which meant the increasing mechanization, industrialization, formalization and rationalization (efficiency) of society. Burnham's concern about the rise of the managerial revolution was misplaced; what he should have focused on was modernization.
The New Class were those in the mostly government and nonprofit sectors that depended on knowledge for their livelihood without it being coupled to any physical labor: teachers, intellectuals, social workers and psychiatrists, lawyers, media types, hedge fund managers, real estate appraisers, financial advisors, architects, engineers, etc. The New Knowledge Class has only risen since the New Deal created a permanent white collar, non-business class.
The Working Class are those who are employed for wages in manual work in an industry producing something tangible (houses, cars, computers, etc.). The Working Class can also have managers, sometimes called supervisors. And the Working Class is comprised mainly of two groups: unionized workers and private sector non-unionized workers. When we talk about the Working Class we typically are referring to the latter.
The Trumpsters should not be distinguished as being a racial group or class (white) because there are many white people who support Clinton. About 95% of Blacks vote Democratic in the US. Nowhere near that ratio of Whites are supporting Trump. So Trumps' support should not be stereotyped as White.
The number one concern to Trumpsters is that they reflect the previous intergenerational economy where the elderly lent money to the young to buy homes, cars and start small businesses. The Global bankers have shifted money into the stock market because 0.25% per year interest rates in a bank isn't making any money at all when money inflation runs at 1% to 2% (theft). This has been replaced by a Global Economy that depends on financial bubbles and arbitraging of funds.How are the elites supporting Trump different from the elites supporting financier par excellence Mitt Romney?EliteCommInc. , says: September 8, 2016 at 6:23 am"The old left–represented by Sanders–rails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right in a sense."Joe F , says: September 8, 2016 at 11:11 am
Why other couching this. Ten years ago if some Hollywood exec had said, no same sex marriage, no production company in your town, the town would have shrugged. Today before shrugging, the city clerk is checking the account balance. When the governors of Michigan, and Arizona bent down in me culpa's on related issue, because business interests piped in, it was an indication that the game had seriously changed. Some 3 – 5% of the population facing no real opposition has decided that that their private lives needed public endorsement and have proceeded to upend the entire social order - the game has shifted in ways I am not sure most of the public fully grasps or desires.
Same sex weddings in US military chapels - the concept still turns my stomach. Advocates control the megaphones, I don't think they control the minds of the public, despite having convinced a good many people that those who have chosen this expression are under some manner of assault – that demands a legal change - intelligent well educated, supposedly astute minded people actually believe it. Even the Republican nominee believes it.
I love Barbara Streisand, but if the election means she moves to Canada, well, so be it. Take your "drag queens" impersonators wit you. I enjoy Mr. and Mrs Pitt, I think have a social moral core but really? with millions of kids future at stake, endorsing a terminal dynamic as if it will save society's ills - Hollywood doesn't even pretend to behave royally much less embody the sensitivities of the same.
There is a lot to challenge about supporting Mr. Trump. He did support killing children in the womb and that is tragic. Unless he has stood before his maker and made this right, he will have to answer for that. But no more than a trove of Republicans who supported killing children in the womb and then came to their senses. I guess of there is one thing he and I agree on, it's not drinking.
As for big budget military, it seems a waste, but if we are going to waste money, better it be for our own citizens. His Achilles heel here is his intentions as to ISIS/ISIL. I think it's the big drain getting ready to suck him into the abyss of intervention creep.
Missile defense just doesn't work. The tests are rigged and as Israel discovered, it's a hit and miss game with low probability of success, but it makes for great propaganda.
I am supposed to be outraged by a football player stance on abusive government. While the democratic nominee is turning over every deck chair she find, leaving hundreds of thousands of children homeless - let me guess, on the bright side, George Clooney cheers the prospect of more democratic voters.
If Mr. Trumps only achievements are building a wall, over hauling immigration policy and expanding the size of the military. He will be well on his way to getting ranked one of the US most successful presidents.I never understood why an analysis needs to lard in every conceivable historical reference and simply assume its relevance, when there are so many non constant facts and circumstances. There has always been and will always be class conflict, even if it falls short of a war. Simply examining recent past circumstances, the wealthy class has been whooping up on all other classes. This is not to suggest any sort of remedy, but simply to observe that income disparity over the past 30 years has substantially benefitted on sector of class and political power remains in their hands today. To think that there will never be class conflict is to side with a Marxian fantasy of egalitarianism, which will never come to pass. Winners and losers may change positions, but the underlying conflict will always remain.JonF , says: September 8, 2016 at 1:32 pmEliteCommInc,Fabian , says: September 8, 2016 at 3:35 pm
State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those.
The split on Trump is first by race (obviously), then be gender (also somewhat obviously), and then by education. Even among self-declared conservatives it's the college educated who tend to oppose him. This is a lot broader than simply losing some "new" Knowledge Class, unless all college educated people are put in that grouping. In fact he is on track to lose among college educated whites, something no GOP candidate has suffered since the days of FDR and WWII.People don't really care for the actions of the elite but they care for the consequences of these actions. During the 1960's, per capita GDP growth was around 3.5%. Today it stands at 0,49%. If you take into account inflation, it's negative. Add to this the skewed repartition of said growth and it's intuitive that many people feel the pain; whom doesn't move forward, goes backwards.Gilly.El , says: September 8, 2016 at 3:36 pm
People couldn't care for mass immigration, nation building or the emergence of China if their personal situation was not impacted. But now, they begin to feel the results of these actions.I have a simple philosophy regarding American politics that shows who is made of what, and we don't have to go through all the philosophizing in this article: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American.Richard Wagner , says: September 8, 2016 at 5:04 pmEliteComic beat me to the punch. I was disappointed that Ross Perot, who won over 20% of the popular vote twice, and was briefly in the lead in early 1992, wasn't mentioned in this article.JonF , says: September 8, 2016 at 5:07 pmRe: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American.David Helveticka , says: September 8, 2016 at 6:12 pm
The first has nothing whatsoever to do with American citizenship. It's just a political issue– on which, yes, reasonable people can differ. However no American citizen should put the interests of any other country ahead of our own, except in a situation where the US was itself up to no good and deserved its comeuppance. And then the interest is not that of any particular nation, but of justice being done period.A lot of this "New Class" stuff is just confusing mis-mash of this and that theory. Basically, America changed when the US dollar replace gold as the medium of exchange in the world economy. Remember when we called it the PETRO-DOLLAR. As long as the Saudis only accepted the US dollar as the medium of exchange for oil, then the American government could export it's inflation and deficit spending. Budget deficits and trade deficits are intrinsically related. It allowed America to become a nation of consumers instead of a nation of producers.Jim Houghton , says: September 8, 2016 at 6:56 pm
Who really cares about the federal debt. REally? We can print dollars, exchange these worthless dollars with China for hard goods, and then China lends the dollars back to us, to pay for our government. Get it?
It's really a form of classic IMPERIALISM. To maintain this system, we've got the US military and we prop up the corrupt dictatorships in Saudi Arabia, Iraq, Libya
Yeah, you can talk about the "new class", the corruption of the banking system by the idiotic "libertarian" or "free market utopianism" of the Gingrich Congress, the transformation of American corporations to international corporations, and on and on. But it's the US dollar as reserve currency that has allowed it all to happen. God help us, if it ends, we'll be crippled.
And damn the utopianism of you "libertarians" you're worse then Marxists when it comes to ideology over reality.Ronald Reagan confounded the GOP party elite, too. They - rightly - considered him an intellectual lightweight.EliteCommInc. , says: September 8, 2016 at 9:20 pm"State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those."cecelia , says: September 9, 2016 at 1:34 am
Ah, not it's policy on some measure able effect. The seatbelt law was debate across the country. The data indicated that it did in fact save lives. And it's impact was universal applicable to every man women or child that got into a vehicle.
That was not a private bedroom issue. Of course businesses have advocated policy. K street is not a K-street minus that reality. But GM did not demand having relations in parked cars be legalized or else.
You are taking my apples and and calling them seatbelts - false comparison on multiple levels, all to get me to acknowledge that businesses have influence. It what they have chosen to have influence on -
That is another matter.I do not think the issue of class is relevant here – whether it be new classes or old classes. There are essentially two classes – those who win given whatever the current economic arrangements are or those who lose given those same arrangements. People who think they are losing support Trump versus people who think they are winning support Clinton. The polls demonstrates this – Trump supporters feel a great deal more anxiety about the future and are more inclined to think everything is falling apart whereas Clinton supporters tend to see things as being okay and are optimistic about the future. The Vox work also shows this pervasive sense that life will not be good for their children and grandchildren as a characteristic of Trump supporters.Clint , says: September 9, 2016 at 5:47 pm
The real shift I think is in the actual coalitions that are political parties. Both the GOP and the Dems have been coalitions – political parties usually are. Primary areas of agreement with secondary areas of disagreement. Those coalitions no longer work. The Dems can be seen as a coalition of the liberal knowledge types – who are winners in this economy and the worker types who are often losers now in this economy. The GOP also is a coalition of globalist corporatist business types (winners) with workers (losers) who they attracted in part because of culture wars and the Dixiecrats becoming GOPers. The needs of these two groups in both parties no longer overlap. The crisis is more apparent in the GOP because well – Trump. If Sanders had won the nomination for the Dems (and he got close) then their same crisis would be more apparent. The Dems can hold their creaky coalition together because Trump went into the fevered swamps of the alt. right.
I think this is even more obvious in the UK where you have a Labor Party that allegedly represents the interests of working people but includes the cosmopolitan knowledge types. The cosmopolitans are big on the usual identity politics, unlimited immigration and staying in the EU. They benefit from the current economic arrangement. But the workers in the Labor party have been hammered by the current economic arrangements and voted in droves to get out of the EU and limit immigration. It seems pretty obvious that there is no longer a coalition to sustain the Labor Party. Same with Tories – some in the party love the EU,immigration, globalization while others voted out of the EU, want immigration restricted and support localism. The crisis is about the inability of either party to sustain its coalitions. Those in the Tory party who are leavers should be in a political party with the old Labor working class while the Tory cosmopolitans should be in a party with the Labor cosmopolitans. The current coalitions not being in synch is the political problem – not new classes etc.
Here in the US the southern Dixiecrats who went to the GOP and are losers in this economy might find a better coalition with the black, Latino and white workers who are still in the Dem party. But as in the UK ideological culture wars have become more prominent and hence the coalitions are no longer economically based. If people recognized that politics can only address the economic issues and they aligned themselves accordingly – the membership of the parties would radically change.
So forget about class and think coalitions.The Clinton Class mocks The Country Class: Bill Clinton, "We all know how her opponent's done real well down in West Virginia and eastern Kentucky. Because the coal people don't like any of us anymore." "They blame the president when the sun doesn't come up in the morning now,"someguy , says: September 10, 2016 at 9:25 pmCollin, this is straight ridiculous.Rick , says: September 12, 2016 at 3:05 pm
"Trump's voters were most strongly characterized by their "racial isolation": they live in places with little ethnic diversity. "
During the primaries whites in more diverse areas voted Trump. The only real exception was West Virginia. Utah, Wyoming, Iowa? All voted for Cruz and "muh values".
In white enclaves like Paul Ryans district, which is 91%, whites are able to signal against white identity without having to face the consequences.Collin said:Craig , says: September 13, 2016 at 10:11 am
"All three major African, Hispanic, & Asian-American overwhelming support HRC in the election."
That doesn't mean they actually support Hillary's policies and position. What do they really know about either? These demographics simply vote overwhelmingly Democrat no matter who is on the ticket. If Alfred E. Newman were the candidate, this particular data point would look just the same."On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would benefit hard industry and managerial interests."
This doesn't ring true. Hard industry, and the managers that run it had no problem with moving jobs and factories overseas in pursuit of cheaper labor. Plus, it solved their Union issues. I feel like the divide is between large corporations, with dilute ownership and professional managers who nominally serve the interests of stock fund managers, while greatly enriching themselves versus a multitude of smaller, locally owned businesses whose owners were also concerned with the health of the local communities in which they lived.
The financial elites are a consequence of consolidation in the banking and finance industry, where we now have 4 or 5 large institutions versus a multitude of local and regional banks that were locally focused.
Mar 30, 2016 | www.nakedcapitalism.comBy Thomas Frank, author of the just-published Listen, Liberal, or What Ever Happened to the Party of the People? (Metropolitan Books) from which this essay is adapted. He has also written Pity the Billionaire , The Wrecking Crew , and What's the Matter With Kansas? among other works. He is the founding editor of The Baffler . Originally published at TomDispatch
When you press Democrats on their uninspiring deeds - their lousy free trade deals, for example, or their flaccid response to Wall Street misbehavior - when you press them on any of these things, they automatically reply that this is the best anyone could have done. After all, they had to deal with those awful Republicans, and those awful Republicans wouldn't let the really good stuff get through. They filibustered in the Senate. They gerrymandered the congressional districts. And besides, change takes a long time. Surely you don't think the tepid-to-lukewarm things Bill Clinton and Barack Obama have done in Washington really represent the fiery Democratic soul.
So let's go to a place that does. Let's choose a locale where Democratic rule is virtually unopposed, a place where Republican obstruction and sabotage can't taint the experiment.
Let's go to Boston, Massachusetts, the spiritual homeland of the professional class and a place where the ideology of modern liberalism has been permitted to grow and flourish without challenge or restraint. As the seat of American higher learning, it seems unsurprising that Boston should anchor one of the most Democratic of states, a place where elected Republicans (like the new governor) are highly unusual. This is the city that virtually invented the blue-state economic model, in which prosperity arises from higher education and the knowledge-based industries that surround it.
The coming of post-industrial society has treated this most ancient of American cities extremely well. Massachusetts routinely occupies the number one spot on the State New Economy Index, a measure of how "knowledge-based, globalized, entrepreneurial, IT-driven, and innovation-based" a place happens to be. Boston ranks high on many of Richard Florida's statistical indices of approbation - in 2003, it was number one on the "creative class index," number three in innovation and in high tech - and his many books marvel at the city's concentration of venture capital, its allure to young people, or the time it enticed some firm away from some unenlightened locale in the hinterlands.
Boston's knowledge economy is the best, and it is the oldest. Boston's metro area encompasses some 85 private colleges and universities, the greatest concentration of higher-ed institutions in the country - probably in the world. The region has all the ancillary advantages to show for this: a highly educated population, an unusually large number of patents, and more Nobel laureates than any other city in the country.
The city's Route 128 corridor was the original model for a suburban tech district, lined ever since it was built with defense contractors and computer manufacturers. The suburbs situated along this golden thoroughfare are among the wealthiest municipalities in the nation, populated by engineers, lawyers, and aerospace workers. Their public schools are excellent, their downtowns are cute, and back in the seventies their socially enlightened residents were the prototype for the figure of the "suburban liberal."
Another prototype: the Massachusetts Institute of Technology, situated in Cambridge, is where our modern conception of the university as an incubator for business enterprises began. According to a report on MIT's achievements in this category, the school's alumni have started nearly 26,000 companies over the years, including Intel, Hewlett Packard, and Qualcomm. If you were to take those 26,000 companies as a separate nation, the report tells us, its economy would be one of the most productive in the world.
Then there are Boston's many biotech and pharmaceutical concerns, grouped together in what is known as the "life sciences super cluster," which, properly understood, is part of an "ecosystem" in which PhDs can "partner" with venture capitalists and in which big pharmaceutical firms can acquire small ones. While other industries shrivel, the Boston super cluster grows, with the life-sciences professionals of the world lighting out for the Athens of America and the massive new "innovation centers" shoehorning themselves one after the other into the crowded academic suburb of Cambridge.
To think about it slightly more critically, Boston is the headquarters for two industries that are steadily bankrupting middle America: big learning and big medicine, both of them imposing costs that everyone else is basically required to pay and which increase at a far more rapid pace than wages or inflation. A thousand dollars a pill, 30 grand a semester: the debts that are gradually choking the life out of people where you live are what has made this city so very rich.
Perhaps it makes sense, then, that another category in which Massachusetts ranks highly is inequality. Once the visitor leaves the brainy bustle of Boston, he discovers that this state is filled with wreckage - with former manufacturing towns in which workers watch their way of life draining away, and with cities that are little more than warehouses for people on Medicare. According to one survey, Massachusetts has the eighth-worst rate of income inequality among the states; by another metric it ranks fourth. However you choose to measure the diverging fortunes of the country's top 10% and the rest, Massachusetts always seems to finish among the nation's most unequal places.
Seething City on a Cliff
You can see what I mean when you visit Fall River, an old mill town 50 miles south of Boston. Median household income in that city is $33,000, among the lowest in the state; unemployment is among the highest, 15% in March 2014, nearly five years after the recession ended. Twenty-three percent of Fall River's inhabitants live in poverty. The city lost its many fabric-making concerns decades ago and with them it lost its reason for being. People have been deserting the place for decades.
Many of the empty factories in which their ancestors worked are still standing, however. Solid nineteenth-century structures of granite or brick, these huge boxes dominate the city visually - there always seems to be one or two of them in the vista, contrasting painfully with whatever colorful plastic fast-food joint has been slapped up next door.
Most of the old factories are boarded up, unmistakable emblems of hopelessness right up to the roof. But the ones that have been successfully repurposed are in some ways even worse, filled as they often are with enterprises offering cheap suits or help with drug addiction. A clinic in the hulk of one abandoned mill has a sign on the window reading simply "Cancer & Blood."
The effect of all this is to remind you with every prospect that this is a place and a way of life from which the politicians have withdrawn their blessing. Like so many other American scenes, this one is the product of decades of deindustrialization, engineered by Republicans and rationalized by Democrats. This is a place where affluence never returns - not because affluence for Fall River is impossible or unimaginable, but because our country's leaders have blandly accepted a social order that constantly bids down the wages of people like these while bidding up the rewards for innovators, creatives, and professionals.
Even the city's one real hope for new employment opportunities - an Amazon warehouse that is now in the planning stages - will serve to lock in this relationship. If all goes according to plan, and if Amazon sticks to the practices it has pioneered elsewhere, people from Fall River will one day get to do exhausting work with few benefits while being electronically monitored for efficiency, in order to save the affluent customers of nearby Boston a few pennies when they buy books or electronics.
But that is all in the future. These days, the local newspaper publishes an endless stream of stories about drug arrests, shootings, drunk-driving crashes, the stupidity of local politicians, and the lamentable surplus of "affordable housing." The town is up to its eyeballs in wrathful bitterness against public workers. As in: Why do they deserve a decent life when the rest of us have no chance at all? It's every man for himself here in a "competition for crumbs," as a Fall River friend puts it.
The Great Entrepreneurial Awakening
If Fall River is pocked with empty mills, the streets of Boston are dotted with facilities intended to make innovation and entrepreneurship easy and convenient. I was surprised to discover, during the time I spent exploring the city's political landscape, that Boston boasts a full-blown Innovation District, a disused industrial neighborhood that has actually been zoned creative - a projection of the post-industrial blue-state ideal onto the urban grid itself. The heart of the neighborhood is a building called "District Hall" - "Boston's New Home for Innovation" - which appeared to me to be a glorified multipurpose room, enclosed in a sharply angular façade, and sharing a roof with a restaurant that offers "inventive cuisine for innovative people." The Wi-Fi was free, the screens on the walls displayed famous quotations about creativity, and the walls themselves were covered with a high-gloss finish meant to be written on with dry-erase markers; but otherwise it was not much different from an ordinary public library. Aside from not having anything to read, that is.
This was my introduction to the innovation infrastructure of the city, much of it built up by entrepreneurs shrewdly angling to grab a piece of the entrepreneur craze. There are "co-working" spaces, shared offices for startups that can't afford the real thing. There are startup "incubators" and startup "accelerators," which aim to ease the innovator's eternal struggle with an uncaring public: the Startup Institute, for example, and the famous MassChallenge, the "World's Largest Startup Accelerator," which runs an annual competition for new companies and hands out prizes at the end.
And then there are the innovation Democrats, led by former Governor Deval Patrick, who presided over the Massachusetts government from 2007 to 2015. He is typical of liberal-class leaders; you might even say he is their most successful exemplar. Everyone seems to like him, even his opponents. He is a witty and affable public speaker as well as a man of competence, a highly educated technocrat who is comfortable in corporate surroundings. Thanks to his upbringing in a Chicago housing project, he also understands the plight of the poor, and (perhaps best of all) he is an honest politician in a state accustomed to wide-open corruption. Patrick was also the first black governor of Massachusetts and, in some ways, an ideal Democrat for the era of Barack Obama - who, as it happens, is one of his closest political allies.
As governor, Patrick became a kind of missionary for the innovation cult. "The Massachusetts economy is an innovation economy," he liked to declare, and he made similar comments countless times, slightly varying the order of the optimistic keywords: "Innovation is a centerpiece of the Massachusetts economy," et cetera. The governor opened "innovation schools," a species of ramped-up charter school. He signed the "Social Innovation Compact," which had something to do with meeting "the private sector's need for skilled entry-level professional talent." In a 2009 speech called "The Innovation Economy," Patrick elaborated the political theory of innovation in greater detail, telling an audience of corporate types in Silicon Valley about Massachusetts's "high concentration of brainpower" and "world-class" universities, and how "we in government are actively partnering with the private sector and the universities, to strengthen our innovation industries."
What did all of this inno-talk mean? Much of the time, it was pure applesauce - standard-issue platitudes to be rolled out every time some pharmaceutical company opened an office building somewhere in the state.
On some occasions, Patrick's favorite buzzword came with a gigantic price tag, like the billion dollars in subsidies and tax breaks that the governor authorized in 2008 to encourage pharmaceutical and biotech companies to do business in Massachusetts. On still other occasions, favoring inno has meant bulldozing the people in its path - for instance, the taxi drivers whose livelihoods are being usurped by ridesharing apps like Uber. When these workers staged a variety of protests in the Boston area, Patrick intervened decisively on the side of the distant software company. Apparently convenience for the people who ride in taxis was more important than good pay for people who drive those taxis. It probably didn't hurt that Uber had hired a former Patrick aide as a lobbyist, but the real point was, of course, innovation: Uber was the future, the taxi drivers were the past, and the path for Massachusetts was obvious.
A short while later, Patrick became something of an innovator himself. After his time as governor came to an end last year, he won a job as a managing director of Bain Capital, the private equity firm that was founded by his predecessor Mitt Romney - and that had been so powerfully denounced by Democrats during the 2012 election. Patrick spoke about the job like it was just another startup: "It was a happy and timely coincidence I was interested in building a business that Bain was also interested in building," he told the Wall Street Journal . Romney reportedly phoned him with congratulations.
At a 2014 celebration of Governor Patrick's innovation leadership, Google's Eric Schmidt announced that "if you want to solve the economic problems of the U.S., create more entrepreneurs." That sort of sums up the ideology in this corporate commonwealth: Entrepreneurs first. But how has such a doctrine become holy writ in a party dedicated to the welfare of the common man? And how has all this come to pass in the liberal state of Massachusetts?
The answer is that I've got the wrong liberalism. The kind of liberalism that has dominated Massachusetts for the last few decades isn't the stuff of Franklin Roosevelt or the United Auto Workers; it's the Route 128/suburban-professionals variety. (Senator Elizabeth Warren is the great exception to this rule.) Professional-class liberals aren't really alarmed by oversized rewards for society's winners. On the contrary, this seems natural to them - because they are society's winners. The liberalism of professionals just does not extend to matters of inequality; this is the area where soft hearts abruptly turn hard.
Innovation liberalism is "a liberalism of the rich," to use the straightforward phrase of local labor leader Harris Gruman. This doctrine has no patience with the idea that everyone should share in society's wealth. What Massachusetts liberals pine for, by and large, is a more perfect meritocracy - a system where the essential thing is to ensure that the truly talented get into the right schools and then get to rise through the ranks of society. Unfortunately, however, as the blue-state model makes painfully clear, there is no solidarity in a meritocracy. The ideology of educational achievement conveniently negates any esteem we might feel for the poorly graduated.
This is a curious phenomenon, is it not? A blue state where the Democrats maintain transparent connections to high finance and big pharma; where they have deliberately chosen distant software barons over working-class members of their own society; and where their chief economic proposals have to do with promoting "innovation," a grand and promising idea that remains suspiciously vague. Nor can these innovation Democrats claim that their hands were forced by Republicans. They came up with this program all on their own.allan , March 30, 2016 at 1:34 amPookah Harvey , March 30, 2016 at 11:28 am
As if on cue:
Boston Welcomes General Electric As Company Disputes EPA Cleanup Plan
When Massachusetts officials put on a luncheon feting General Electric CEO Jeffrey Immelt last week, they were celebrating the company's decision to accept hundreds of millions of dollars worth of taxpayer incentives and move to the state. At the same time, however, GE is not backing off its refusal to fully remove the toxins it dumped in one of Massachusetts' largest waterways.
Innovative!Pookah Harvey , March 30, 2016 at 12:01 pm
GE will move 800 jobs to Mass.with a tax incentive of $145,000,000. http://www.nytimes.com/2016/01/14/technology/ge-boston-headquarters.html?_r=0
This comes to over $181,000 per job.Pookah Harvey , March 30, 2016 at 1:10 pm
P.S. From the above NYT story:
"What does GE's headquarters bring? There are the jobs, for sure. About 800 people work at the Fairfield headquarters. Its new Boston office will include 200 corporate jobs and about 600 tech-oriented jobs: designers, programmers and the like."
"But GE is closing down a valve factory in Avon, eliminating roughly 300 local, largely blue-collar jobs - and shifting the work that's done there to a new plant in Florida."
What a deal for Mass middle class taxpayers.fresno dan , March 30, 2016 at 2:13 pm
Sorry about multiple replies but decided to check out the valve plant move. GE got a $15,400,000 tax incentive from Florida and Jacksonville for making the move.
"I grew up in a family that struggled to get a job,"(Gov.)Scott said during his stop at the JAX Chamber's office in downtown. "My parents struggled to get jobs. It's the most important thing you can do for a family."
The race to the bottom is obvious. Middle class tax payers make up for tax losses due to these incentives. Taking jobs away from middle class people in Massachusetts to give them to middle class people in Florida just so a giant multinational can cut its tax load is nothing to be proud of.
http://jacksonville.com/news/metro/2014-09-26/story/ge-announces-move-jacksonville-plant-will-bring-least-500-employeesJohnnyGL , March 30, 2016 at 2:49 pm
Thanks for the links Pookah, and of course, you bring up a great point – the lack of examination of how much these jobs cost, and who the JOBS are FOR, and who is actually paying for them.
Attributed to Marx that capitalists will sell communists the ropes with which to hang them but probably should be updated that Dems will hang the poor to make the capitalists richer .Bill Pilgrim , March 30, 2016 at 2:30 am
Good link!animalogic , March 30, 2016 at 3:07 am
Does Martin Skreli live there, too?Lambert Strether , March 30, 2016 at 3:36 am
I guess, the expression: "the D's are no better than the R's" can never be repeated enough. And certainly the concrete evidence of Massachusetts, putting the lie to the nonsense of "the Republicans made us do it" (sook-sook) is useful.
But, I feel sure, most NC readers are way beyond discussion of the character and differences between the kabuki appearances of the one sorry, TWO institutional business parties.animalogic , March 30, 2016 at 4:49 am
Two parties (many of whose members genuinely hate each other). One system.David , March 30, 2016 at 9:38 am
Sibling hatred.EmilianoZ , March 30, 2016 at 10:01 am
The Clinton Bush Establishment Party is just about dividing the spoils. They don't need 320 million people – it will work with 30 million or lessfresno dan , March 30, 2016 at 2:14 pm
They hate each other because they compete for the same corporate money.hunkerdown , March 30, 2016 at 2:28 pm
+ one (dare I say it) squillionNotorious P.A.T. , March 30, 2016 at 3:07 pm
But they're still members of the same player's union, so taking one for the sport now and again is part of the package.Benedict@Large , March 30, 2016 at 11:26 am
And what do we hate most about others? What we hate about ourselves.jhallc , March 30, 2016 at 11:27 am
I feel for people on the wrong side of our social issues, but the fact is that you're never going to come up wit a governing majority unless you are talking about putting food on the dinner table.
As soon as you bring the social issues into that group, the group will start to fracture, losing strength until it no longer has that majority. This is how the elite's divide-and-conquer strategy works.Pookah Harvey , March 30, 2016 at 12:28 pm
The "Social" liberal piece is the only plank left in a rotting Democratic house.Ulysses , March 30, 2016 at 12:39 pm
This is Nader's two headed snake. The parties can differentiate on God, guns and gays as long as they both agree to corporate control of the economy. This is the Clinton Third Way legacy that left the Democrats kowtowing to the corporate elites. Hillary continues this tradition.
Education and healthcare as rights are "unrealistic" in the richest nation the world has ever seen for Hillary. Even while every other advanced nation on the planet provides for it. Why is it unrealistic? Maybe because it will cut into corporate profits.Notorious P.A.T. , March 30, 2016 at 3:08 pm
"It shouldn't be an either/or proposition." Absolutely right! Yet I think many working class people are beginning to realize how they have been played by identity politics.
I heard a self-identified "blue-collar conservative" express it this way: "the republicans always talking about Jesus, but they never try to help the people our Lord cared about. People who are sick, in jail, whatever."Ray , March 30, 2016 at 3:47 am
Don't women and homosexuals need jobs, too?Disturbed Voter , March 30, 2016 at 5:18 am
Deindustrialization has been occurring in all advanced OECD nations for the last 40 years, including before and after trade liberalization, before NAFTA, the WTO, Most-Favored Nation Status for China, in countries with strong interventionist industrial policy, and even in countries with strong labor unions.
De-industrialization, like De-agriculturalism that preceded it, in which 98% of the populace moved from farming to factory jobs, seems to be a fundamental aspect of massive increases in productivity , and advanced economies moving to services.
The forces that were responsible for this really can't be laid on the Democrats or Republicans, since it's occurring everywhere at roughly the same rate. You can see a graph here: http://s17.postimg.org/bha27d6xb/worldmfg.jpg
This can only get worse with the likes of self-driving cars and trucks, mobile e-commerce, warehouse automation, AI based customer support, etc. Moving into the future, fewer people will be needed to produce more with less, in addition to a demographic inversion from a low birth rate producing countries where 30-40% of the population are 65 or older.
It's really time to stop playing with partisan politics and past models that imagine a return to the Ozzie and Harriet days of large blue collar labor in manufacturing. Our populations are getting older, and our technology is making work less relevant.
If anything, we should be looking at a move to universal living income model in which no one needs to work to live, it becomes optional.hunkerdown , March 30, 2016 at 2:30 pm
What you are describing is a non-authoritarian fulfillment of Marxist communism. Except unlike Marx, you left out all the conflict that happens in a class society. Pray tell, you seem to be expecting a classless society to appear out of the fulfillment of automation. Human beings aren't classless creatures. We love division into classes, and the resulting conflict between them, if we aren't loving ethnic, religious or national conflict.Massinissa , March 30, 2016 at 6:32 am
Another evo-soc just-so story? Tell me, how many generations does it take to turn selective breeding into "human nature"?tony , March 30, 2016 at 6:37 am
What Disturbed Voter is trying to say, is that no major change ever goes unnopposed by those who benefit from the existing system. Be prepared for the oligarchs and their quislings to fight you tooth and nail. If you expect the Masters of the Universe who benefit from modern capitalism to 'stop playing with partisan politics' then im afraid youre believing a fairy tale.
Its called class WARfare for a reasonnowhere , March 30, 2016 at 3:28 pm
The assumption that increasing automation will continue in a world of diminishing natural and energy resources is highly dubious. In societies which do not have privileged access to energy, a lot of work is still performed with human muscle. If the energy resources the rich countries rely upon become scarcer, the same is likely to be the case in what are now rich societies.Left in Wisconsin , March 30, 2016 at 12:43 pm
Agreed. That automation still requires energy – whether you want to account for the human (food, shelter, etc.) or the machine (resources to produce the machine, resources to program the logic, resources to power the computation, etc.) you can't escape the 2nd Law.Eric , March 30, 2016 at 1:13 pm
You are not correct that that US deindustrialization has been primarily a function of massive increases in productivity. First of all, mfg productivity has decreased in the US since 2004. (See recent Brookings paper). Second, the vast majority of the increase in overall mfg productivity over recent decades is has been due to giant measured increases in one sector – computers – and those giant measured increases (which are probably mismeasurements) have been accompanied by massive offshoring of manufacturing jobs in this sector, not the elimination of work.
Also, deindustrialization is not like de-farming because farmers could move to higher productivity work, where as laid off factory workers are having to move, when they can find work at all, from high productivity work to low productivity work.
fewer people will be needed to produce more with less : this has been the case for the last 100+ years at least yet has never led to the elimination of work. Indeed, average workdays are longer now than they were 50 years ago and most families have more people working today than families did 50 years ago.pfitzsimon , March 30, 2016 at 5:54 pm
Tony: Increasing automation will absolutely occur and increase, irrespective of current rates of resource extraction from the ground. Here is why: as resource prices increase, capital will begin to apply AI, etc. to the task of maximizing efficiency in recycling, etc – in order to continue the march towards elimination of the variable price input they despise most (humans). As far as energy goes, keep in mind that solar is rapidly increasing in efficiency too. Add to that, the following: there are trillions of tons of scrap metal that, absent the need to pay humans to harvest and handle them for recycling, can be reused to make more robots. If you are a 95% automated company, you locate your factories in hellholes like Death Valley where solar is cheap. You make robots whose task is to make more robots from scavenged metal, precious metals, rare-earths, etc.
The thing is, the holders of capital are now (or are all becoming) fundamentally sociopathic. Ultimately, in order to stem the tide of automation (that, goshdarnit, they wish they wouldn't have to resort to, but darn those pesky wages and benefits and so on), minimum wage laws will be eliminated. I see this in comment sections all the time – if you allow people to compete on price, the lowest will always win.
If, following a long period of rentier-extraction of all economic value (i.e. forced liquidiation of any assets the workers hold, sales of personal belongings, you fill in the blanks), the final answer is dystopian nightmare. Eventually, it will be accepted that people will be allowed to indenture themselves again. Those agreements become currency – tradeable like bonds or other instruments. Eventually, the rich, having used up everything else to buy/sell/crapify will resort to the outright trading in human lives – it's easy to envision a world in which one obligates oneself at, say, 16, to 30 years of labor and your contract is then bought or sold by the rich depending on your apparent worth.
All of this will be sanctioned and embraced by the collective sufferers of Stockholm Syndrome that we are all becoming.I Have Strange Dreams , March 30, 2016 at 4:45 am
But why do those negotiating our trade deals do everything possible to protect agriculture even though it employs few while telling us that manufacturing is gotta go because it's too productive?Massinissa , March 30, 2016 at 6:28 am
Frank finally gets it: Liberalism still means the same thing it did 150 years ago.DakotabornKansan , March 30, 2016 at 6:50 am
Curious, other than things like Free Trade and voting rights for white men, what else does it mean? Are there things Im forgetting? Because those are what come to mind.diptherio , March 30, 2016 at 10:39 am
What Thomas Frank writes is a measure of our civilization.
It is the best of times, it is the worst of times, it is the age of wisdom, it is the age of foolishness, it is the epoch of belief, it is the epoch of incredulity, it is the season of light, it is the season of darkness, it is the spring of hope, it is the winter of despair.
Everyone wants the American dream. But the dream isn't there anymore. Most fall more than they climb.
Robert Putnam, Our Kids: The American Dream in Crisis, writes that "Growing class segregation means that rich Americans and poor Americans are living, learning, and raising children in increasingly separate and unequal worlds, removing the stepping-stones to upward mobility."
The politicians and the media tell us that we have to further tighten our belts and live on hay, while the collapse of the middle class continues to accelerate, and promise us pie in the sky. What a mockery!
The masses, having been deceived, are now agitated and in ferment.
"Long ago it was said that "one half of the world does not know how the other half lives." That was true then. It did not know because it did not care. The half that was on top cared little for the struggles, and less for the fate of those who were underneath, so long as it was able to hold them there and keep its own seat. There came a time when the discomfort and consequent upheavals so violent, that it was no longer an easy thing to do, and then the upper half fell to inquiring what was the matter. Information on the subject has been accumulating rapidly since, and the whole world has had its hands full answering for its old ignorance." – Jacob A. Riis, How the Other Half Lives
To future times the face of what now is!Larry , March 30, 2016 at 7:09 am
What a great (and apropos) quote! Thanks. Now I'm going to have to look into what else went down around 1890 the more things change.
en.wikipedia.org/wiki/How_the_Other_Half_Livescojo , March 30, 2016 at 2:06 pm
Politicians ultimately serve their most important constituents, which across the country means the wealthy. In traditional Democratic enclaves where getting out the vote meant giving out benefits like housing and health care, the pressure from the masses is no longer there. Rather, whoever raises the most money for campaign cash is able to win most elections. Scott Brown tapped into the dissatisfied and down trodden of the state for his brief turn as our Republican representative in the Senate, but he turned out to be nothing more than a barn jacket driving an F150. Moreover, witness the massive rewards that are now possible for retired technocrats. Deval Patrick made a fantastic wage as a lawyer prior to being governor and now waltzes into Bain Capital to continue harvesting economic gains. Why would a politician do anything to bite the hand that feeds it?Harry , March 30, 2016 at 8:09 am
Another fitting quote from "that" time:
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Upton Sinclair Jr.John , March 30, 2016 at 8:14 am
It's the same as the reason for robbing banks. ..DWD , March 30, 2016 at 8:21 am
"Google's Eric Schmidt announced that "if you want to solve the economic problems of the U.S., create more entrepreneurs."'
Entrepreneurs are going to solve the problem that Americans
only have money for gas, food, health insurance and rent?
Yeah.diptherio , March 30, 2016 at 10:52 am
The thing that gets lost in all of these discussions concerning inequality and the changing nature of work and education is that all of these things are the result of policy changes.
Yes. We did it.
Willfully and purposefully.
And those who benefit the most and therefore are able to contribute the most to professional associations and personal giving continue to demand that these policies not only continue on the same track but that new wrinkles be added to aid the people giving the money to do even better – whether it is regulatory, statute, or enforcement of existing laws; all of these can be enhanced for the rich and successful.
At this point the working class person (whether by choice or necessity) has no champion. A few years ago The Onion posted a faux news story detailing how the American People had hired lobbyists to influence policy.
Like too much of the Onion's Stuff, the lampoon becomes the harpoon as it flies directly to the heart of the matter.
Again what is missing is that these things are the result of policy not some organic sea-change as the poster above delineates. (For the policies that are fomenting these changes are copied around the world – "improved" – in come cases and sent back creating an endless loop of denigration for working folks)
IOW, change the policies, change the outcome.
It really is that simple.
Well, the idea is simple anyway.Massinissa , March 30, 2016 at 10:49 pm
We did it.
Willfully and purposefully.
Who's this "we" you speak of, kemosabe? Those with the power to influence policy have designed these outcomes. I have never been among them. Have you?
But you are correct in asserting that what we are seeing is the result purposeful action. The policies are bad, but before we will be able to really change them, I think, we'll need to re-frame the debate in such a way that every possible solution turns out to be a win for the elites. We need to get back to basics. What is the economy for? Hint, not making money.mad as hell. , March 30, 2016 at 8:30 am
Are you an oligarch of some kind? If not, then saying that 'we did it' is wrong, because the oligarchs bought all the politicians and had them enact these changes. To blame the electorate when the majority of choices available to vote for were pre-selected to be answerable only to the masters of capital seems to me to be disingenuous.Torsten , March 30, 2016 at 8:58 am
I'm glad Mr. Frank didn't mention "Boston Strong". There's a term that makes the hairs on the back of my neck stand up. The Boston that was so strong that it was shut down and stilled for a while by two brothers then one remaining brother, the teenager. A primer for how to apply Marshall law to populous American cities during times of trouble. "Coming soon to a city near you", if need be.mle detroit , March 30, 2016 at 9:07 am
The attitudes were no different in Massachusetts fifty years ago, but you had to venture into Southie or Roxbury or Fall River to see past the liberal rhetoric and observe the contempt the gownies held for the townies. All that has changed is that now the manufacturing jobs are gone; only the contempt remains.notinlaborforce , March 30, 2016 at 9:13 am
Same essay posted at theamericanconservative com (!), also with thoughtful comments like these: go look.farrokh bulsara , March 30, 2016 at 9:56 am
Massachusetts is a 'Commonwealth.' Maybe they ought to change that.Tim , March 30, 2016 at 9:57 am
Whither the bolsheviks? This sure explains how HRC won the MA primary essentially by winning only the Boston metro area.
freddieLexington , March 30, 2016 at 1:54 pm
Frank doesn't really mention though that de-industrialization in places like Fall River started even before World War II. To be fair at this point it was textile mills and tanneries moving to other places in the US with cheaper labor(i.e. the South). So Massachusetts historically was really not hurt per say by free trade with other countries but free trade within the United States.michael k phippen , March 30, 2016 at 10:04 am
That's a reductionist argument, like saying that since you already had a cold the fact you've now been diagnosed with cancer really isn't that big a deal. It's important to disaggregate different trends and analyze their distinct contributions to changes in economic fortunes. Such an analysis is likely to show that while the migration of some industries from the North to the South, largely to exploit cheap labour, did have some non negligible regional impact the effect was completely swamped by the subsequent shock of trade liberalization and globalization. The initial movement involved labour intensive low skill light industries while the latter saw the decimation of the heavy industries that were once the bedrock of the American economy. Moreover, fluctuations in employment patterns within the US doesn't effect aggregate employment and output, while the outsourcing of jobs overseas represents the dead loss of both, not to mention the negative impact on the trade account of having to import all the things that were once produced domestically.Brindle , March 30, 2016 at 10:09 am
Thanks for your comparison article on MA, maybe you should look at Minnesota the only state that has been mostly democrat for the longest period. Of course if you did you could not manage your theme it just would not play-michael , March 30, 2016 at 10:09 am
The Nation has mostly the same excerpt of Frank's book and gives it a headline that is a misdirect-"Why Have Democrats Failed in the State Where They're Most Likely to Succeed?" .The Democrats didn't "fail", the leaders of the party were successful in their desired outcome.hreik , March 30, 2016 at 2:11 pm
I guess you forgot to look at Minnesota, it would be uncomfortable for you to so as it would not support your theme –Ranger Rick , March 30, 2016 at 10:54 am
why don't you explain? I'm interested what you mean. tyflora , March 30, 2016 at 10:56 am
Remember when Boston wanted to bankroll the corrupt Olympic Games and the general population rose up as one and said "no!" in much less polite terms?
There's hope yet.Keith , March 30, 2016 at 11:12 am
Great post. Thanks.Keith , March 30, 2016 at 11:26 am
If only it was just a US phenomenon.
A two party system has been rolled out globally where the choice is:
1) Neo-Liberal (Left flavour)
2) Neo-Liberal (Right flavour)
In the UK we used to have three parties Labour, Conservative and Liberal. Now there is no room between the slightly left and slightly right parties and the Liberals have been squeezed out of existence.
Unfortunately the Neo-liberal ideology failed in 2008.
Everyone has now noticed the Neo-Liberal, Centrist main parties are not working in the interests of the electorate.
Unconditional bailouts for bankers and austerity for the people.
How can there be any doubt?
New parties or leaders are required that aren't, Neo-Liberal centrists.
In Europe we have Podemos, Syriza and Five Star with a myriad of right wing parties including Golden Dawn.
In the UK, UKIP and Corbyn.
In the US, Trump, Sanders and the Tea Party.
The elite haven't quite worked out how badly they have failed their electorate.
Get out of your ivory towers and discover the new reality.Massinissa , March 30, 2016 at 10:51 pm
It is important to establish the difference between Liberal and Labour/Socialist.
Where even the UK term Labour, and US term Socialist, are just versions of Capitalism that lie on the Left, not true Socialism.
Liberals are left leaning elitists who are always using words like "populist" to show their disdain for the masses.
They want those lower down to have reasonable lives but very much believe the elite should run things, people like them.
New Labour were really Liberals, but the UK election system meant they had to hide under the Labour banner to get into power. They lived in places like Hampstead where they never had to mix with the hoi polloi and believed in private schools, so their children don't have to mix with the great unwashed.
Labour/Socialists represent the people and identify with them.
With the technocrat elite messing things up globally it is time for real Labour and Socialists to make their presence felt.
There is a world of difference between Liberals and the real Left and a three party system makes sense.
The New Labour sympathisers need to get themselves under the correct banner, Liberal.
The US needs a third party too.
Clinton – elitist Liberal
Sanders – Leftsusan the other , March 30, 2016 at 11:18 am
Have you not been reading news about Greece for several years? Syriza is neoliberal to the core, it was a Trojan horse of a political party.James Levy , March 30, 2016 at 12:22 pm
All those innovative new spin-off businesses will fail. Most of them. There are only so many things an economy needs. A bubble of innovation isn't one of them. But it is good for the "consumer" as Hillary tells us, because competition. Progress. So everyone can have more cheap crap. Who says we have been deindustrialized? All this misbegotten innovation is going to bury us under mountains of garbage. Just to keep the economy churning. We are not just wasting time and resources for the sake of a bad idea, we are creating critical mass. It's almost as if policy makers think that if we don't all run around in a frenzy of creativity the world will stop turning. Liberalism is a silly, self indulgent thing.Lexington , March 30, 2016 at 1:33 pm
I think you are largely right but let's give the devil his due: most of us would not like to return to the world of 1760 before the first stuttering steps of industrial innovation. It was a world even more unequal and authoritarian than our own. So when people talk about progress and innovation, they have history and some powerful evidence from the past to call upon. The question now is appropriateness, which I think is what you are driving at. We need to determine as a community what is appropriate for our future well-being and how we want to use the technology we have, under democratic control, to make a better future than the consumerist ecological disaster looming close on our horizon.Punta Pete , March 30, 2016 at 11:21 am
"Innovation" is what limousine liberals propose to offer the masses in place of secure employment and a decent standard of living. It's effectively old fashioned social Darwinism -innovate or die- dressed up in fadish contemporary buisiness-speak that provides an ideological justification for throwing the masses overboard while flattering their own prejudices about "meritocracy", "flexible labour markets", and what have you.
As you said most of these businesses will fail, because the idea that innovation is an end in itself is a conceit dreamed up by business school professors who have never spent a day running the day to day operations (like meeting payroll) of an actual business. In reality innovation is largely a serendipitous process that can't be taught in classrooms and is at best only slightly responsive to external support ("incubation"). Very often it is largely dependent on dumb luck – the proverbial being "in the right place at the right time". People like Deval Patrick are never going to acknowledge that however because to do so would be to admit -first of all to themselves- that having championed policies that stripped workers of security and a respectable livelihood what they are offering them in its place amounts to a handful of beans.Dave , March 30, 2016 at 2:42 pm
For at least 30 years Democrats have run on a platform of 'Identity Politics' which pits gays against straits, people of color against whites, skeptics against the religious, immigrants against nativists, etc. In short, deviding the country against itself in almost every demographic category except the one that really counts – labor against capital. The party once led by FDR who famously welcomed the hatred and wrath of Wall Street is now led by the likes of Chuck Shumer and Steney Hoyer who have their heads so far up the ass-end of Wall Street that it's amazing that either one of them can still breathe.JohnnyGL , March 30, 2016 at 2:46 pm
"Gays against straits"? Almost as good as "marshall law".
Remember, he who controls language, controls thoughts. Notice how the use of language forces concepts?
"Gay," and "straight," in a sexual sense, are words invented, promoted and used by homosexuals.They are biased words.
"Homosexual" and "heterosexual" are neutral terms and are thus more democratic and unloaded with preconceptions, bias or hate.JohnnyGL , March 30, 2016 at 2:52 pm
$145M in tax breaks for 800 jobs that we stole from CT! Innovation!!!
I'm guessing employees aren't going to get paid the $181,250 a year that that comes out to? Perhaps the state could have just hired 800 people and saved a bundle. But then we couldn't brag about how we have so many world class businesses based right here!!!
So, where's the money coming from???
"The city's education budget is $50 million short, despite a $13 million hike in school spending."
"Schools are facing the deficit due to rising costs and declining state and federal aid."
Oh right, that's where. Sometimes, it's like you can actually watch our wonderful leaders making our society worse, more unequal right before your very eyes?!?!?!Notorious P.A.T. , March 30, 2016 at 3:04 pm
It's also worth pointing out that this is one of the few states (possibly the only) where Trump has exceeded 50% of the Republican Primary vote.Paul Tioxon , March 30, 2016 at 6:10 pm
Great article. Thomas Frank does it again.Political Economist , March 30, 2016 at 9:05 pm
I just got Thomas Frank's new book, and so far it seems to have gathered together in a coherent narrative the journey of the leadership of the Democratic party to split off from the blue collar workers who used to fill the factories. We no longer have the factories to occupy the time of the least educated, and the dems have done precious little to confront this problem. I don't know what else he has to say about his ideas towards the middle and end of his book, but I know the real conclusion should be that the work week needs to continue to drop down another couple of days. The level of automation and smart manufacturing design from the past 100 years has steady improvements in productivity. The vast majority of our time is simply no longer required to sustain the standard of living and increases in productivity. We may need to give over 3 Eight hour days to work for the economy, the rest of the time should be left to own pursuit of happiness while we live the short span allotted to us in the world.
The economic restructuring is a political decision making process that so far, no one party as a whole has picked up as their primary unifying cause. While there are plenty of dems who have a working class politics, they are in a minority within the dems.And while they understand the value of supporting a tech based new economy, that doesn't mean we still don't needs tables and chairs, refrigerators and stoves and other manufactured goods. It may mean we need fewer people to make them, but the other alternatives for people without college or professional degrees needs to be supported in numbers required to give everyone a decent paying job.
There is enough deferred maintenance of falling down buildings, homeless people that can be housed in abandoned homes, potholes in roads, bad bridges, not to mention the enormous transition to solar and wind power. The social order needs to change to allow people a quality standard of living from our economic activity. And our economic activity can not just be based upon apps, video games and 3-D printed birthday cakes. We still need to eat, so we did not abandon agriculture. We still like to live in comfortable homes, so we do not have to abandon furniture making. And we all benefit from being educated and healthy. All of our industrial base does not have to be jettisoned for the sake of computers and the internet of everything. We still need something manufactured if we are going to put the internet inside of it, whatever it maybe.gary , March 31, 2016 at 2:12 am
The best way to encourage innovation is to assure a strong safety net so that everyone can innovate. The Scandinavian countries lead in measures of innovation (look it up). The US is also a leader but only because of the large presence of government (read the book, "The Entrepreneurial State).
Artisanal furniture, Artisanal coffee. Artisanal this and Artisanal that
but Artisanal Liberals, Artisanal Democrates, now that's where it's at!
~ a forgotten forklift driver who doesn't deserve a decent life because a decent life costs more here than it does in Asia, with the difference going to those who don't need it for anything more than cocktail party bragging rights
May 26, 2015 | http://www.theguardian.com/us-news/2015/may/26/bernie-sanders-launches-presidential-campaignNad Gough
This is a good man. He is Independent, running as a Democrat as 3rd party candidates are doomed from the start. He is elderly, so choosing his running mate will be extremely important in terms of his electibility. Elizabeth Warren? If she won't run for President, maybe this is the ticket?lutesongs
So far this is the ONLY candidate whose desire for "change" matches what folks want. The other potential candidates are known sleight of hand change artists. And I use the word "artist" in the way one might describe someone who draws stick figures. Badly.
Bernie Sanders is the first candidate since Carter to actually project a sense of positive values and integrity. He is the frontrunner for most Americans who care about fairness and a sustainable future. Don't allow the corporate media to marginalize him by innuendo or non-coverage. Don't allow the Democratic Party to turn a blind eye to the issues. Don't allow the Repubs to steal another election through blatant electronic voter fraud, hacking the voting machines and gaming the results. Start a campaign for voters to photograph their results and compile independent vote counts. An honest election would likely favor a populist with integrity. Bernie Sanders is the one.BabyLyonThe country is ruled by greedy corporation, all governmental authorities are corrupted to the limit, unstoppable wars and overall torpidity and all these candidates are able to offer is doubtful solutions for two-or three "serious" problems. Either they're blind or just fool American people.PhilippeOrlandoThis population is too stupid to elect a guy like Sanders. With a median household income of 50K/year it will vote, one more time, for people who don't represent it. The only two running candidates who represents 99% of the population are Sanders and Stein, the Green candidate. All others will cater first to the wealthy. Clinton will be chosen over Sanders because for some weird reason 'mericans vote for the guy they think will fight for who they think they'll be one day, not for whom they are now. I think it's about time to stop feeling sorry for most Americans, half of them won't bother to go vote anyway, and a huge majority will keep voting for the wrong guys.Justin Weaver -> PhilippeOrlandoI totally get you, but I think that a lot of Americans truly believe that they ARE prosperous even if they have minimal savings, no job security, and are only one medical disaster away from bankruptcy. Many American's have really bought the American dream narrative even if they have little chance of achieving it.patimac54Bernie's brother Larry, long time UK resident, stood for the Green Party in my constituency in the recent elections. He has spent his adult life working for others, particularly carers, and is a man of great integrity and intelligence. Of course he didn't win but was by far the most impressive candidate at the local hustings, and thereby exposed the audience to a viewpoint most will not have experienced previously.amorezu
If Bernie is half the man his brother is, US voters have a fine candidate, and similarly he may open up the electorate's eyes to the idea that it is possible to believe in something better.A man that openly calls himself a 'democratic socialist' will never win in the USA. People here have an allergy to the word 'socialism'. Unfortunately that allergy is causing them to be OK with living in a de-facto oligarchy.Observer453Something I love about Bernie Sanders is that he is straight forward, honest in his views and cannot be bought. I imagine he's something of a mystery to the many 'politicians', as Barack Obama recently described himself.jdanforth
Someone that actually thinks about what is best for the people, not for himself. Bernie calls himself a Socialist, if that is what Socialism means - and caring for the environment - sign me up.
Part of an analysis of the Sanders campaign, written three weeks ago by Bruce A. Dixon:Doro Wynant jdanforth
Bernie Sanders is this election's Democratic sheepdog. The sheepdog is a card the Democratic party plays every presidential primary season when there's no White House Democrat running for re-election. The sheepdog is a presidential candidate running ostensibly to the left of the establishment Democrat to whom the billionaires will award the nomination. Sheepdogs are herders, and the sheepdog candidate is charged with herding activists and voters back into the Democratic fold who might otherwise drift leftward and outside of the Democratic party, either staying home or trying to build something outside the two party box.
1984 and 88 the sheepdog candidate was Jesse Jackson. In 92 it was California governor Jerry Brown. In 2000 and 2004 the designated sheepdog was Al Sharpton, and in 2008 it was Dennis Kucinich. This year it's Vermont senator Bernie Sanders. The function of the sheepdog candidate is to give left activists and voters a reason, however illusory, to believe there's a place of influence for them inside the Democratic party,...Jon Phillips
1. Not one of the candidates cited had the legislative background that Sanders has -- not the duration in office, not the proven appeal to a diverse constituency, not the proven ability to work respectfully with unlike-minded peers.
2. Al Sharpton and Jesse Jackson clearly never had a chance; they're not at all in the same category.
3. Poverty is at a 50-year high in the US, and many once-middle-class, educated, professional persons (myself included) are -- thanks to the recession -- part of the nouveau poor. Even the formerly-non-activist-types are angry, and they're paying attention to his talk of income inequality -- and Sanders has more credibility as a potential reformer than does wealthy insider HRC.
4. What Dixon condescendingly refers to as "left activists and voters [who have no influence in the party]" are in fact people with mainstream ideas about building and maintaining a stable society. The right, having skewed the debate over the past 25 years, luvvvvvs to pretend that these centrist, humane ideas are wacky and way-out when in fact they're, well, mainstream ideas. Who among us doesn't want a safe, clean world in which to live, love, work, raise our families?
Not only is that not a wacky idea, it's a very -- GASP -- Christian idea/ideal!RickyRat
If you vote for Hillary you are accepting that America is now an oligarchy. How else can you explain the amount of time the Bush & Clinton families have occupied the White House?
300 million Americans and 2 families have occupied the White House for 20 of the last 28 years........Bertmax RickyRat
This business comes down to just two choices: You can vote for Pennywise the Clown in either his Republican or her Democratic persona, along with the creature's Robber Baron backers, or you can vote for Sanders. You could cast a protest vote somewhere else, but doing that will just further the cause of the Robber Barons. Let's take back the wheel of the American political process!Doro Wynant Needsmorecow
That is a fallacy called "false equivalency". It is wrong to say that both parties are to blame. Sure, both have their share of corruption, but at least the Democrats are pushing legislation that actually benefits the 90%. I am a member of neither party, since I don't believe in supporting only a narrow set of ideals one way or the other, but the GOP are the true scourge of my country. People like Sanders and Warren actually care about this country.
This site links you to legislation he sponsored or co-sponsored, to his bio, and to his website:
https://www.congress.gov/member/bernard-/bernie_sanders.S000033A recent poll had Bernie "lagged behind the favorite by a margin of 63% to 13%" Is that among the fake people "Hillary Who" has supporting her?RickyRat Chris Plante
He's probably doing much better among real people.
There is a machine out there, running full blast. Sanders is the wrench the machine's owners fear.Jeannie ParkerI take offense at the suggestion he's from far left field. It's absurd to say in the least. He's been drafted by us. He's running for us. All of us. I admin on few Bernie Sanders' pages on FB and I can tell you with all certainty that the folks getting behind this man and his campaign are coming from across the political spectrum.
The beauty of it is, he has a thirty some odd years long record that cannot be altered.
This man has and always will work for the interests of everyone.
No one can listen to him and his policy positions and not get behind him.
Bernie Sanders is coming and a revolution is coming with him.
No amount of money can sway us or turn us from our goal of seeing this fine gentleman ascend to the highest office of our Land. Cheers.
May 13, 2015 | RT NewsThe White House is determined to block the rise of the key nuclear-armed nations, Russia and China, neither of whom will join the "world's acceptance of Washington's hegemony," says head of the Institute for Political Economy, Paul Craig Roberts.
The former US assistant secretary of the Treasury for economic policy, Dr Paul Craig Roberts, has written on his blog that Beijing is currently "confronted with the Pivot to Asia and the construction of new US naval and air bases to ensure Washington's control of the South China Sea, now defined as an area of American National Interests."
Roberts writes that Washington's commitment to contain Russia is the reason "for the crisis that Washington has created in Ukraine and for its use as anti-Russian propaganda."
The author of several books, "How America Was Lost" among the latest titles, says that US "aggression and blatant propaganda have convinced Russia and China that Washington intends war, and this realization has drawn the two countries into a strategic alliance."
Dr Roberts believes that neither Russia, nor China will meanwhile accept the so-called "vassalage status accepted by the UK, Germany, France and the rest of Europe, Canada, Japan and Australia." According to the political analyst, the "price of world peace is the world's acceptance of Washington's hegemony."
"On the foreign policy front, the hubris and arrogance of America's self-image as the 'exceptional, indispensable' country with hegemonic rights over other countries means that the world is primed for war," Roberts writes.
He gives a gloomy political forecast in his column saying that "unless the dollar and with it US power collapses or Europe finds the courage to break with Washington and to pursue an independent foreign policy, saying good-bye to NATO, nuclear war is our likely future."
Russia's far-reaching May 9 Victory Day celebration was meanwhile a "historical turning point," according to Roberts who says that while Western politicians chose to boycott the 70th anniversary of the defeat of Nazi Germany, "the Chinese were there in their place," China's president sitting next to President Putin during the military parade on Red Square in Moscow.
A recent poll targeting over 3,000 people in France, Germany and the UK has recently revealed that as little as 13 percent of Europeans think the Soviet Army played the leading role in liberating Europe from Nazism during WW2. The majority of respondents – 43 percent – said the US Army played the main role in liberating Europe.
"Russian casualties compared to the combined casualties of the US, UK, and France make it completely clear that it was Russia that defeated Hitler," Roberts points out, adding that "in the Orwellian West, the latest rewriting of history leaves out of the story the Red Army's destruction of the Wehrmacht."
The head of the presidential administration, Sergey Ivanov, told RT earlier this month that attempts to diminish the role played by Russia in defeating Nazi Germany through rewriting history by some Western countries are part of the ongoing campaign to isolate and alienate Russia.
Dr Roberts has also stated in his column that while the US president only mentioned US forces in his remarks on the 70th anniversary of the victory, President Putin in contrast "expressed gratitude to 'the peoples of Great Britain, France and the United States of America for their contribution to the victory.'"
The political analyst notes that America along with its allies "do not hear when Russia says 'don't push us this hard, we are not your enemy. We want to be your partners.'"
While Moscow and Beijing have "finally realized that their choice is vassalage or war," Washington "made the mistake that could be fateful for humanity," according to Dr Roberts.Read more Perverted history: Europeans think US army liberated continent during WW2
Read more US mulls sending military ships, aircraft near South China Sea disputed islands – report
Aug 30, 2016 | BreitbartOn the surface, it appears that Hillary Clinton and Donald Trump, for all their mutual antipathy, are united on one big issue: opposition to new trade deals. Here's a recent headline in The Guardian: "Trump and Clinton's free trade retreat: a pivotal moment for the world's economic future."
And the subhead continues in that vein:
Never before have both main presidential candidates broken so completely with Washington orthodoxy on globalization, even as the White House refuses to give up. The problem, however, goes much deeper than trade deals.
In the above quote, we can note the deliberate use of the loaded word, "problem." As in, it's a problem that free trade is unpopular-a problem, perhaps, that the MSM can fix. Yet in the meantime, the newspaper sighed, the two biggest trade deals on the horizon, the well-known Trans Pacific Partnership (TPP), and the lesser-known Trans Atlantic Trade Investment Partnership (TTIP), aimed at further linking the U.S. and European Union (EU), are both in jeopardy.
Indeed, if TPP isn't doing well, TTIP might be dead: Here's an August 28 headline from the Deutsche Welle news service quoting Sigmar Gabriel, the No. 2 in the Berlin government: "Germany's Vice Chancellor Gabriel: US-EU trade talks 'have failed.'"
So now we must ask broader questions: What does this mean for trade treaties overall? And what are the implications for globalism?
More specifically, we can ask: Are we sure that the two main White House hopefuls, Clinton and Trump, are truly sincere in their opposition to those deals? After all, as has been widely reported, President Obama still has plans to push TPP through to enactment in the "lame duck" session of Congress after the November elections. Of course, Obama wouldn't seek to do that if the president-elect opposed it-or would he?
Yet on August 30, Politico reminded its Beltway readership, "How Trump or Clinton could kill Pacific trade deal." In other words, even if Obama were to move TPP forward in his last two months in office, the 45th president could still block its implementation in 2017 and beyond. If, that is, she or he really wanted to.
Indeed, as we think about Clinton and Trump, we realize that there's "opposition" that's for show and there's opposition that's for real.
Still, given what's been said on the presidential campaign trail this year, it seems fair to say: Globalism isn't quite the Wave of the Future that most observers thought it was, even just a year ago. And so before we attempt to divide the true intentions of Clinton and Trump, we might first step back and consider how we got to this point.
2. The Free Trade Orthodoxy
It's poignant that the headline, "Trump and Clinton's free trade retreat", lamenting the decay of free trade, appeared in The Guardian. Until recently, the newspaper was known as The Manchester Guardian, as in Manchester, England. And Manchester is not only a big city, population 2.5 million, it is also a city with a fabled past: You see, Manchester was the cradle of the Industrial Revolution, which transformed England and the world. It was that city that helped create the free trade orthodoxy that is now crumbling.
Yes, in the 18th and 19th centuries, Manchester was the leading manufacturing city in the world, especially for textiles. It was known as "Cottonopolis."
Indeed, back then, Manchester was so much more efficient and effective at mass production that it led the world in exports. That is, it could produce its goods at such low cost that it could send them across vast oceans and still undercut local producers on price and quality.
Over time, this economic reality congealed into a school of thought: As Manchester grew rich from exports, its business leaders easily found economists, journalists, and propagandists who would help advance their cause in the press and among the intelligentsia.
The resulting school of thought became known, in the 19th century, as "Manchester Liberalism." And so, to this day, long after Manchester has lost its economic preeminence to rivals elsewhere in the world, the phrase "Manchester Liberalism" is a well-known in the history of economics, bespeaking ardent support for free markets and free trade.
More recently, the hub for free-trade enthusiasm has been the United States. In particular, the University of Chicago, home to the Nobel Prize-winning economist Milton Friedman, became free trade's academic citadel; hence the "Chicago School" has displaced Manchesterism.
And just as it made sense for Manchester Liberalism to exalt free trade and exports when Manchester and England were on top, so, too, did the Chicago School exalt free trade when the U.S. was unquestionably the top dog.
So back in the 40s and 50s, when the rest of the world was either bombed flat or still under the yoke of colonialism, it made perfect sense that the U.S., as the only intact industrial power, would celebrate industrial exports: We were Number One, and it was perfectly rational to make the most of that first-place status. And if scribblers and scholars could help make the case for this new status quo, well, bring 'em aboard. Thus the Chicago School gained ascendancy in the late 20th century. And of course, the Chicagoans drew inspiration from a period even earlier than Manchesterism,
3. On the Origins of the Orthodoxy: Adam Smith and David Ricardo
The beginnings of an intellectually rigorous discussion of trade can be traced to 1776, when Adam Smith published his famous work, An Inquiry into the Nature and Causes of the Wealth of Nations.
One passage in that volume considers how individuals might optimize their own production and consumption:
It is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy.
Smith is right, of course; everyone should always be calculating, however informally, whether or not it's cheaper to make it at home or buy it from someone else.
We can quickly see: If each family must make its own clothes and grow its own food, it's likely to be worse off than if it can buy its necessities from a large-scale producer. Why? Because, to be blunt about it, most of us don't really know how to make clothes and grow food, and it's expensive and difficult-if not downright impossible-to learn how. So we can conclude that self-sufficiency, however rustic and charming, is almost always a recipe for poverty.
Smith had a better idea: specialization. That is, people would specialize in one line of work, gain skills, earn more money, and then use that money in the marketplace, buying what they needed from other kinds of specialists.
Moreover, the even better news, in Smith's mind, was that this kind of specialization came naturally to people-that is, if they were free to scheme out their own advancement. As Smith argued, the ideal system would allow "every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice."
That is, men (and women) would do that which they did best, and then they would all come together in the free marketplace-each person being inspired to do better, thanks to, as Smith so memorably put it, the "invisible hand." Thus Smith articulated a key insight that undergirds the whole of modern economics-and, of course, modern-day prosperity.
A few decades later, in the early 19th century, Smith's pioneering work was expanded upon by another remarkable British economist, David Ricardo.
Ricardo's big idea built on Smithian specialization; Ricardo called it "comparative advantage." That is, just as each individual should do what he or she does best, so should each country.
In Ricardo's well-known illustration, he explained that the warm and sunny climate of Portugal made that country ideal for growing the grapes needed for wine, while the factories of England made that country ideal for spinning the fibers needed for apparel and other finished fabrics.
Thus, in Ricardo's view, we could see the makings of a beautiful economic friendship: The Portuguese would utilize their comparative advantage (climate) and export their surplus wine to England, while the English would utilize their comparative advantage (manufacturing) and export apparel to Portugal. Thus each would benefit from the exchange of efficiently-produced products, as each export paid for the other.
Furthermore, in Ricardo's telling, if tariffs and other barriers were eliminated, then both countries, Portugal and England, would enjoy the maximum free-trading win-win.
Actually, in point of fact-and Ricardo knew this-the relationship was much more of a win for England, because manufacture is more lucrative than agriculture. That is, a factory in Manchester could crank out garments a lot faster than a vineyard in Portugal could ferment wine.
And as we all know, the richer, stronger countries are industrial, not agricultural. Food is essential-and alcohol is pleasurable-but the real money is made in making things. After all, crops can be grown easily enough in many places, and so prices stay low. By contrast, manufacturing requires a lot of know-how and a huge upfront investment. Yet with enough powerful manufacturing, a nation is always guaranteed to be able to afford to import food. And also, it can make military weapons, and so, if necessary, take foreign food and croplands by force.
We can also observe that Ricardo, smart fellow that he was, nevertheless was describing the economy at a certain point in time-the era of horse-drawn carriages and sailing ships. Ricardo realized that transportation was, in fact, a key business variable. He wrote that it was possible for a company to seek economic advantage by moving a factory from one part of England to another. And yet in his view, writing from the perspective of the year 1817, it was impossible to imagine moving a factory from England to another country:
It would not follow that capital and population would necessarily move from England to Holland, or Spain, or Russia.
Why this presumed immobility of capital and people? Because, from Ricardo's early 19th-century perspective, transportation was inevitably slow and creaky; he didn't foresee steamships and airplanes. In his day, relying on the technology of the time, it wasn't realistic to think that factories, and their workers, could relocate from one country to another.
Moreover, in Ricardo's era, many countries were actively hostile to industrialization, because change would upset the aristocratic rhythms of the old order. That is, industrialization could turn docile or fatalistic peasants, spread out thinly across the countryside, into angry and self-aware proletarians, concentrated in the big cities-and that was a formula for unrest, even revolution.
Indeed, it was not until the 20th century that every country-including China, a great civilization, long asleep under decadent imperial misrule-figured out that it had no choice other than to industrialize.
So we can see that the ideas of Smith and Ricardo, enduringly powerful as they have been, were nonetheless products of their time-that is, a time when England mostly had the advantages of industrialism to itself. In particular, Ricardo's celebration of comparative advantage can be seen as an artifact of his own era, when England enjoyed a massive first-mover advantage in the industrial-export game.
Smith died in 1790, and Ricardo died in 1823; a lot has changed since then. And yet the two economists were so lucid in their writings that their work is studied and admired to this day.
Unfortunately, we can also observe that their ideas have been frozen in a kind of intellectual amber; even in the 21st century, free trade and old-fashioned comparative advantage are unquestioningly regarded as the keys to the wealth of nations-at least in the U.S.-even if they are so no longer.
4. Nationalist Alternatives to Free Trade Orthodoxy
As we have seen, Smith and Ricardo were pushing an idea, free trade, that was advantageous to Britain.
So perhaps not surprisingly, rival countries-notably the United States and Germany-soon developed different ideas. Leaders in Washington, D.C., and Berlin didn't want their respective nations to be mere dependent receptacles for English goods; they wanted real independence. And so they wanted factories of their own.
In the late 18th century, Alexander Hamilton, the visionary American patriot, could see that both economic wealth and military power flowed from domestic industry. As the nation's first Treasury Secretary, he persuaded President George Washington and the Congress to support a system of protective tariffs and "internal improvements" (what today we would call infrastructure) to foster US manufacturing and exporting.
And in the 19th century, Germany, under the much heavier-handed leadership of Otto von Bismarck, had the same idea: Make a concerted effort to make the nation stronger.
In both countries, this industrial policymaking succeeded. So whereas at the beginning of the 19th century, England had led the world in steel production, by the beginning of the 20th century century, the U.S. and Germany had moved well ahead. Yes, the "invisible hand" of individual self-interest is always a powerful economic force, but sometimes, the "visible hand" of national purpose, animated by patriotism, is even more powerful.
Thus by 1914, at the onset of World War One, we could see the results of the Smith/Ricardo model, on the one hand, and the Hamilton/Bismarck model, on the other. All three countries-Britain, the US, and Germany, were rich-but only the latter two had genuine industrial mojo. Indeed, during World War One, English weakness became glaringly apparent in the 1915 shell crisis-as in, artillery shells. It was only the massive importing of made-in-USA ammunition that saved Britain from looming defeat.
Yet as always, times change, as do economic circumstances, as do prevailing ideas.
As we have seen, at the end of World War II, the U.S. was the only industrial power left standing. And so it made sense for America to shift from a policy of Hamiltonian protection to a policy of Smith-Ricardian export-minded free trade. Indeed, beginning in around 1945, both major political parties, Democrats and Republicans, solidly embraced the new line: The U.S. would be the factory for the world.
Yet if times, circumstances, and ideas change, they can always change again.
5. The Contemporary Crack-Up
As we have seen, in the 19th century, not every country wanted to be on the passive receiving end of England's exports. And this was true, too, in the 20th century; Japan, notably, had its own ideas.
If Japan had followed the Ricardian doctrine of comparative advantage, it would have focused on exporting rice and tuna. Instead, by dint of hard work, ingenuity, and more than a little national strategizing, Japan grew itself into a great and prosperous industrial power. Its exports, we might note, were such high-value-adds as automobiles and electronics, not mere crops and fish.
Moreover, according to the same theory of comparative advantage, South Korea should have been exporting parasols and kimchi, and China should have settled for exporting fortune cookies and pandas.
Yet as the South Korean economist Ha-Joon Chang has chronicled, these Asian nations resolved, in their no-nonsense neo-Confucian way, to launch state-guided private industries-and the theory of comparative advantage be damned.
Yes, their efforts violated Western economic orthodoxy, but as the philosopher Kant once observed, the actual proves the possible. Indeed, today, as we all know, the Asian tigers are among the richest and fastest-growing economies in the world.
Leading them all, of course, is China. As the economic historian Michael Lind recounted recently,
China is not only the world's largest economy in terms of purchasing power parity (PPP), but also the world's largest manufacturing nation-producing 52 percent of color televisions, 75 percent of mobile phones and 87 percent of the world's personal computers. The Chinese automobile industry is the world's largest, twice the size of America's. China leads the world in foreign exchange reserves. The United States is the main trading partner for seventy-six countries. China is the main trading partner for 124.
In particular, we might pause over one item in that impressive litany: China makes 87 percent of the world's personal computers.
Indeed, if it's true, as ZDNet reports, that the Chinese have built "backdoors" into almost all the electronic equipment that they sell-that is to say, the equipment that we buy-then we can assume that we face a serious military challenge, as well as a serious economic challenge.
Yes, it's a safe bet that the People's Liberation Army has a good handle on our defense establishment, especially now that the Pentagon has fully equipped itself with Chinese-made iPhones and iPads.
Of course, we can safely predict that Defense Department bureaucrats will always say that there's nothing to worry about, that they have the potential hacking/sabotage matter under control (although just to be sure, the Pentagon might say, give us more money).
Yet we might note that this is the same defense establishment that couldn't keep track of lone internal rogues such as Bradley Manning and Edward Snowden. Therefore, should we really believe that this same DOD knows how to stop the determined efforts of a nation of 1.3 billion people, seeking to hack machines-machines that they made in the first place?
Yes, the single strongest argument against the blind application of free- trade dogma is the doctrine of self defense. That is, all the wealth in the world doesn't matter if you're conquered. Even Adam Smith understood that; as he wrote, "Defense . . . is of much more importance than opulence."
Yet today we can readily see: If we are grossly dependent on China for vital wares, then we can't be truly independent of China. In fact, we should be downright fearful.
Still, despite these deep strategic threats, directly the result of careless importing, the Smith-Ricardo orthodoxy remains powerful, even hegemonistic-at least in the English-speaking world.
Why is this so? Yes, economists are typically seen as cold and nerdy, even bloodless, and yet, in fact, they are actual human beings. And as such, they are susceptible to the giddy-happy feeling that comes from the hope of building a new utopia, the dream of ushering in an era of world harmony, based on untrammeled international trade. Indeed, this woozy idealism among economists goes way back; it was the British free trader Richard Cobden who declared in 1857,
Free trade is God's diplomacy. There is no other certain way of uniting people in the bonds of peace.
And lo, so many wars later, many economists still believe that.
Indeed, economists today are still monolithically pro-fee trade; a recent survey of economists found that 83 percent supported eliminating all tariffs and other barriers; just 10 percent disagreed.
We might further note that others, too, in the financial and intellectual elite are fully on board the free-trade train, including most corporate officers and their lobbyists, journalists, academics, and, of course, the mostly for-hire think-tankers.
To be sure, there are always exceptions: As that Guardian article, the one lamenting the sharp decrease in support for free trade as a "problem," noted, not all of corporate America is on board, particularly those companies in the manufacturing sector:
Ford openly opposes TPP because it fears the deal does nothing to stop Japan manipulating its currency at the expense of US rivals.
Indeed, we might note that the same Guardian story included an even more cautionary note, asserting that support for free trade, overall, is remarkably rickety:
Some suggest a "bicycle theory" of trade deals: that the international bandwagon has to keep rolling forward or else it all wobbles and falls down.
So what has happened? How could virtually the entire elite be united in enthusiasm for free trade, and yet, even so, the free trade juggernaut is no steadier than a mere two-wheeled bike? Moreover, free traders will ask: Why aren't the leaders leading? More to the point, why aren't the followers following?
To answer those questions, we might start by noting the four-decade phenomenon of wage stagnation-that's taken a toll on support for free trade. But of course, it's in the heartland that wages have been stagnating; by contrast, incomes for the bicoastal elites have been soaring.
We might also note that some expert predictions have been way off, thus undermining confidence in their expertise. Remember, this spring, when all the experts were saying that the United Kingdom would fall into recession, or worse, if it voted to leave the EU? Well, just the other day came this New York Post headline: "Brexit actually boosting the UK economy."
Thus from the Wall Street-ish perspective of the urban chattering classes, things are going well-so what's the problem?
Yet the folks on Main Street have known a different story. They have seen, with their own eyes, what has happened to them, and no fusillade of op-eds or think-tank monographs will persuade them to change their mind.
So we can see that there's been a standoff: Wall Street vs. Main Street; nor is this the first time this has happened.
However, because the two parties have been so united on the issues of trade and globalization-the "Uniparty," it's sometimes called-the folks in the boonies have had no political alternative. And as they say, the only power you have in this world is the power of an alternative. And so, lacking an alternative, the working/middle class has just had to accept its fate.
Indeed, it has been a bitter fate, particularly bitter in the former industrial heartland. In a 2013 paper, the Economic Policy Institute (EPI) came to some startling conclusions:
Growing trade with less-developed countries lowered wages in 2011 by 5.5 percent-or by roughly $1,800-for a full-time, full-year worker earning the average wage for workers without a four-year college degree.
The paper added, "One-third of this total effect is due to growing trade with just China."
Continuing, EPI found that even as trade with low-wage countries caused a decrease in the incomes for lower-end workers, it had caused an increase in the incomes of high-end workers-so no wonder the high-end thinks globalism in great.
To be sure, some in the elite are bothered by what's been happening. Peggy Noonan, writing earlier this year in The Wall Street Journal-a piece that must have raised the hackles of her doctrinaire colleagues-put the matter succinctly: There's a wide, and widening, gap between the "protected" and the "unprotected":
The protected make public policy. The unprotected live in it. The unprotected are starting to push back, powerfully.
Of course, Noonan was alluding to the Trump candidacy-and also to the candidacy of Sen. Bernie Sanders. Those two insurgents, in different parties, have been propelled by the pushing from all the unprotected folks across America.
We might pause to note that free traders have arguments which undoubtedly deserve a fuller airing. Okay. However, we can still see the limits. For example, the familiar gambit of outsourcing jobs to China, or Mexico-or 50 other countries-and calling that "free trade" is now socially unacceptable, and politically unsustainable.
Still, the broader vision of planetary freedom, including the free flow of peoples and their ideas, is always enormously appealing. The United States, as well as the world, undoubtedly benefits from competition, from social and economic mobility-and yes, from new blood.
As Stuart Anderson, executive director of the National Foundation for American Policy, notes, "77 percent of the full-time graduate students in electrical engineering and 71 percent in computer science at U.S. universities are international students." That's a statistic that should give every American pause to ask: Why aren't we producing more engineers here at home?
Moreover, Reuters reported in 2012 that 44 percent of all Silicon Valley startups were founded by at least one immigrant, and a 2016 study found that more than half of all billion-dollar startups were founded by immigrants. No doubt some will challenge the methodology of these studies, and that's fine; it's an important national debate in which all Americans might engage.
We can say, with admiration, that Silicon Valley is the latest Manchester; as such, it's a powerful magnet for the best and the brightest from overseas, and from a purely dollars-and-cents point of view, there's a lot to be said for welcoming them.
So yes, it would be nice if we could retain this international mobility that benefits the U.S.-but only if the economic benefits can be broadly shared, and patriotic assimilation of immigrants can be truly achieved, such that all Americans can feel good about welcoming newcomers.
The further enrichment of Silicon Valley won't do much good for the country unless those riches are somehow widely shared. In fact, amidst the ongoing outsourcing of mass-production jobs, total employment in such boomtowns as San Francisco and San Jose has barely budged. That is, new software billionaires are being minted every day, but their workforces tend to be tiny-or located overseas. If that past pattern is the future pattern, well, something will have to give.
We can say: If America is to be one nation-something Mitt "47 percent" Romney never worried about, although it cost him in the end-then we will have to figure out a way to turn the genius of the few into good jobs for the many. The goal isn't socialism, or anything like that; instead, the goal is the widespread distribution of private property, facilitated, by conscious national economic development, as I argued at the tail end of this piece.
If we can't, or won't, find a way to expand private ownership nationwide, then the populist upsurges of the Trump and Sanders campaigns will be remembered as mere overtures to a starkly divergent future.
6. Clinton and Trump Say They Are Trade Hawks: But Are They Sincere?
So now we come to a mega-question for 2016: How should we judge the sincerity of the two major-party candidates, Clinton or Trump, when they affirm their opposition to TPP? And how do we assess their attitude toward globalization, including immigration, overall?
The future is, of course, unknown, but we can make a couple of points.
First, it is true that many have questioned the sincerity of Hillary's new anti-TPP stance, especially given the presence of such prominent free-traders as vice presidential nominee Tim Kaine and presidential transition-planning chief Ken Salazar. Moreover, there's also Hillary's own decades-long association with open-borders immigration policies, as well as past support for such trade bills as NAFTA, PNTR, and, of course, TPP. And oh yes, there's the Clinton Foundation, that global laundromat for every overseas fortune; most of those billionaires are globalists par excellence-would a President Hillary really cross them?
Second, since there's still no way to see inside another person's mind, the best we can do is look for external clues-by which we mean, external pressures. And so we might ask a basic question: Would the 45th president, whoever she or he is, feel compelled by those external pressures to keep their stated commitment to the voters? Or would they feel that they owe more to their elite friends, allies, and benefactors?
As we have seen, Clinton has long chosen to surround herself with free traders and globalists. Moreover, she has raised money from virtually every bicoastal billionaire in America.
So we must wonder: Will a new President Clinton really betray her own class-all those Davos Men and Davos Women-for the sake of middle-class folks she has never met, except maybe on a rope line? Would Clinton 45, who has spent her life courting the powerful, really stick her neck out for unnamed strangers-who never gave a dime to the Clinton Foundation?
Okay, so what to make of Trump? He, too, is a fat-cat-even more of fat-cat, in fact, than Clinton. And yet for more than a year now, he has based his campaign on opposition to globalism in all its forms; it's been the basis of his campaign-indeed, the basis of his base. And his campaign policy advisers are emphatic. According to Politico, as recently as August 30, Trump trade adviser Peter Navarro reiterated Trump's opposition to TPP, declaring,
Any deal must increase the GDP growth rate, reduce the trade deficit, and strengthen the manufacturing base.
So, were Trump to win the White House, he would come in with a much more solid anti-globalist mandate.
Thus we can ask: Would a President Trump really cross his own populist-nationalist base by going over to the other side-to the globalists who voted, and donated, against him? If he did-if he repudiated his central platform plank-he would implode his presidency, the way that Bush 41 imploded his presidency in 1990 when he went back on his "read my lips, no new taxes" pledge.
Surely Trump remembers that moment of political calamity well, and so surely, whatever mistakes he might make, he won't make that one.
To be sure, the future is unknowable. However, as we have seen, the past, both recent and historical, is rich with valuable clues.
Read More Stories About:2016 Presidential Race, Big Government, 2016, Donald Trump, globalism, Hillary Clinton
Libsareclowns -> Pattée Cross
Clinton will say anything then she'll sell you out. I hope we never get a chance to see how she will sell us out on TPP
Ellen Bell -> HoosierMilitia
You really do not understand the primitive form of capitalism that the moneyed elites are trying to impose on us. That system is mercantilism and two of its major tenets are to only give the workers subsistence level wages (what they are doing to poor people abroad and attempting to do here) and monopolistic control of everything that is possible to monopolize. The large multi-nationals have already done that. What we would be headed for under Hillary Clinton is fascism--Mussolini's shorthand definition of fascism was the marriage of industry and commerce with the power of the State. That is what the plutocrats who run the big banks (to whom she owes her soul) aim to do. President, Thomas Jefferson knew the dangers of large European-style central banks. He said:
"...The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered..."
The power to create money was given to the private banking system of the Federal Reserve in 1913. Nearly every bit of our enormous debt has been incurred since then. The American people have become debt-slaves. In the Constitution, only Congress has the right to issue currency. That's why the plutocrats want to do away with it--among other reasons.
Aug 30, 2016 | www.breitbart.comTom Coyne, a lifelong Democrat and the mayor of Brook Park, Ohio, spoke about his endorsement of Republican presidential nominee Donald Trump with Breitbart News Daily SiriusXM host Matt Boyle.
The parties are blurred. What's the difference? They say the same things in different tones. At the end of the day, they accomplish nothing. Donald Trump is challenging the very fabric of the institutional elites in this country on both sides that have, quite frankly, just straight up screwed this country up and made the world a mess.
Regarding the GOP establishment's so-called Never Trumpers, Coyne stated, "If it's their expertise that people are relying upon as to advice to vote, people should go the opposite."
Coyne has been described as "a blue-collar populist, blunt and politically incorrect":
In an interview last week, Coyne said that Democrats and Republicans have failed the city through inaction and bad trade policies, key themes Trump often trumpets.
"He understands us," Coyne said of Trump. "He is saying what we feel, and therefore, let him shake the bedevils out of everyone in the canyons of Washington D.C. The American people are responding to him."
Breitbart News Daily airs on SiriusXM Patriot 125 weekdays from 6:00 a.m. to 9:00 a.m. Eastern.
Jul 24, 2016 | www.nakedcapitalism.com
Brindle, July 24, 2016 at 10:09 amabynormal , July 24, 2016 at 4:51 am
I've tuned out Warren-she has become the "red meat" surrogate for Clinton. Just because Taibbi was excellent on exposing Wall St. doesn't mean he really knows s**t about politics. I find the depiction of Trump as some kind of monster-buffoon to be simply boring and not very helpful.
Norb , July 24, 2016 at 10:54 am
for all the run around Hillary, Trump's chosen circle of allies are Wall Street and Austerity enablers. actually, Trump chaos could boost the enablers as easily as Hillary's direct mongering. War is Money low hanging fruit in this cash strapped era and either directly or indirectly neither candidate will disappoint.
So I Ask Myself which candidate will the majority manage sustainability while assembling to create different outcomes? (might be the Trump Chaos bc Hillary will strategically turn our war machine on us can't believe this is as good as it gets, sighed out)Plenue , July 24, 2016 at 6:32 am
War is only good for the profiteers when it can be undertaken in another territory. Bringing the chaos home cannot be good for business. Endless calls for confidence and stability in markets must reflect the fact that disorder effects more business that the few corporations that benefit directly from spreading chaos. A split in the business community seems to be underway or at least a possible leverage point to bring about positive change.
Even the splits in the political class reflect this. Those that benefit from spreading chaos are loosing strength because they have lost control of where that chaos takes place and who is directly effected from its implementation. Blowback and collateral damage are finally registering.cm , July 24, 2016 at 11:28 am
Trump may be a disaster. Clinton will be a disaster. One of these two will win. I won't vote for either, but if you put a gun to my head and forced me to choose, I'd take Trump. He's certainly not a fascist (I think it was either Vice or Vox that had an article where they asked a bunch of historians of fascism if he was, the answer was a resounding no), he's a populist in the Andrew Jackson style. If nothing else Trump will (probably) not start WW3 with Russia.Lambert Strether Post author , July 24, 2016 at 12:46 pm
And war with Russia doesn't depend just on Hillary, it depends on us in Western Europe agreeing with it.
A laughable proposition. The official US policy, as you may recall, is fuck the EU .
Where was Europe when we toppled the Ukrainian govt? Get back to me when you can actually spend 2% GDP on your military. At the moment you can't even control your illegal immigrants.Steve C , July 24, 2016 at 5:09 pm
The political parties that survive display adaptability, and ideological consistency isn't a requirement for that. Look at the party of Lincoln. Or look at the party of FDR.
If the Democrats decapitate the Republican party by bringing in the Kagans of this world and Republican suburbanites in swing states, then the Republicans will go where the votes are; the Iron Law of Institutions will drive them to do it, and the purge of the party after Trump will open the positions in the party for people with that goal.
In a way, what we're seeing now is what should have happened to the Republicans in 2008. The Democrats had the Republicans down on the ground with Obama's boot on their neck. The Republicans had organized and lost a disastrous war, they had lost the legislative and executive branches, they were completely discredited ideologically, and they were thoroughly discredited in the political class and in the press.
Instead, Obama, with his strategy of bipartisanship - good faith or not - gave them a hand up, dusted them off, and let them right back in the game, by treating them as a legitimate opposition party. So the Republican day of reckoning was postponed. We got various bids for power by factions - the Tea Party, now the Liberty Caucus - but none of them came anywhere near taking real power, despite (click-driven money-raising) Democrat hysteria.
And now the day of reckoning has arrived. Trump went through the hollow institutional shell of the Republican Party like the German panzers through the French in 1939. And here we are!
(Needless to say, anybody - ***cough*** Ted Cruz ***cough*** - yammering about "conservative principles" is part of the problem, dead weight, part of the dead past.) I don't know if the Republicans can remake themselves after Trump; what he's doing is necessary for that, but may not be sufficient.Older & Wiser , July 24, 2016 at 8:37 am
Republicans won Congress and the states because the Democrats handed them to them on a silver platter. To Obama and his fan club meaningful power is a hot potato, to be discarded as soon as plausible.cm , July 24, 2016 at 11:35 am
Having the establishment, the military-industrial complex and Wall Street against him helps Trump a lot.
Pro-Sanders folks, blacks, and hispanics will mostly vote for Trump.
Having Gov. Pence on the ticket, core Republicans and the silent majority will vote for Trump.
Women deep inside know Trump will help their true interests better than the Clinton-Obama rinse repeat
Young people, sick and tired of the current obviously rigged system, will vote for change.
You can fool part of the people all the time, and all people part of the time, but Brexit won, so will Trump, politician extraordinaire
Even Michael Moore gets itJohn k , July 24, 2016 at 10:48 am
Trump has intimated that he is not going to deal with the nuts and bolts of government, that will be Pence's job.
Given his family, a Trump presidency may look more like JFK's, where Bobby had more power than LBJ.
Also, given Trump's negotiating expertise, I would certainly not believe any assertion of support he proclaims for the VP. I expect he had little choice in the matter, and that he also plans to send the VP to the hinterlands at the first opportunity. I'm unclear why so many appear to believe the VP has any influence whatsoever; I believe GWB was the only post-WW2 president who let the VP have any power.Uahsenaa , July 24, 2016 at 12:59 pm
Minorities will benefit at least as much as whites with infrastructure spending, which trump says he wants to do It would make him popular, which he likes, why not believe him? And if pres he would be able to get enough rep votes to get it passed. No chance with Hillary, who anyway would rather spend on wars, which are mostly fought by minorities.
What is a populist? Somebody that tries to do what the majority want. Current examples:
Less wars and military spending. More infrastructure spending. Less support for banks and corps (imagine how many votes trump would gain if he said 'as pres I will jail bankers that break the law' And how that repudiates Obama and both parties.) Gun control (but not possible from within the rep party)
What is a fascist? Somebody that supports corporations, military, and military adventures.EndOfTheWorld , July 24, 2016 at 8:19 am
I'm saying you have a much better chance to pressure Clinton
Sorry, but this argues from facts not in evidence and closely resembles the Correct the Record troll line (now substantiated through the Wikileaks dump) that Clinton "has to be elected" because she is at least responsive to progressive concerns.
Except she isn't, and the degree to which the DNC clearly has been trying to pander to disillusioned Republicans and the amount of bile they spew every time they lament how HRC has had to "veer left" shows quite conclusively to my mind that, in fact, the opposite of what you say is true.
Also, when NAFTA was being debated in the '90s, the Clintons showed themselves to be remarkably unresponsive both to the concerns of organized labor (who opposed it) as well as the majority of the members of their own party, who voted against it. NAFTA was passed only with a majority of Republican votes.
I have no way of knowing whether you're a troll or sincerely believe this, but either way, it needs to be pointed out that the historical record actually contradicts your premise. If you do really believe this, try not to be so easily taken in by crafty rhetoric.EndOfTheWorld , July 24, 2016 at 7:12 am
BTW, I'll take Trump's record as a husband over HRC's record as a wife. He loves a woman, then they break up, and he finds another one. This is not unusual in the US. Hillary, OTOH, "stood by her man" through multiple publicly humiliating infidelities, including having to settle out of court for more than $800,000, and rape charges. No problem with her if her husband was flying many times on the "Lolita Express" with a child molester. Could be she had no idea where her "loved one" was at the time. Do they in fact sleep in the same bed, or even live in the same house? I don't know.
RE: calling Donald Trump a "sociopath"-this is another one of those words that is thrown around carelessly, like "nazi" and "fascist". In the Psychology Today article "How to Spot a Sociopath", they list 16 key behavioral characteristics. I can't see them in Trump-you could make a case for a few of them, but not all. For example: "failure to follow any life plan", "sex life impersonal, trivial, and poorly integrated", "poor judgment and failure to learn by experience", "incapacity for love"-–you can't reasonably attach thes