Exporting HIgh-skill Workers

While Cuba exports doctors around the world to help people’s health, the US exports lawyers to Europe, to help with the neoliberal mergers-and-acquisitions boom.

And the ideologically-besotted will try to bullshit–with a fine artillery of liberal rhetoric– that exporting lawyers for this task helps everyone. But it only fucking helps elites and by now we all know it. Rake in your cash, parasites.

The cite is:

Tagliabue, John. 2007. “Law Firms from U.S. Invade Paris.” The New York Times. July 25.

Free Markets Never Were Fair

Here is a short article on the popular misconception that free markets are fair:

Blount-Lyon, Sally. 2002. “Grand Illusion: Contrary to Popular Belief, Free Markets Never Were Fair.” SternBusiness, Fall/Winter.

The New Suburban Historians such as Kevin Kruse (2005) and Thomas Sugrue (1996) have documented how racism has fueled campaigns against public goods and services in the U.S. Their work also allows us to see how racism undergirds the popular American myth that markets are “fair”, which neoliberal policy depends on for legitimacy.

neoliberalism wiki

“The standard neoliberal policy package includes cutting back on taxes and government social spending; eliminating tariffs and other barriers to free trade; reducing regulations of labor markets, financial markets, and the environment; and focusing macroeconomic policies on controlling inflation rather than stimulating the growth of jobs,” reports economist Robert Pollin (2003).[7] Arising out of a rejection of the class compromises embedded in previous liberal political-economic policies, including Keynesian and Active Labor Market Policies (ALMPs), neoliberal theory, institutions, policies, and practices are not politically neutral.

Opponents critique neoliberalism’s effects on wages, working class institutions, inequality, social mobility, working class well-being, health, the environment, and democracy. Notable opponents to neoliberalism in theory or practice include economists Joseph Stiglitz, Amartya Sen, and Robert Pollin,[8] linguist Noam Chomsky[9], geographer David Harvey, [10] the anti-globalization movement, including ATTAC ((Association pour la Taxation des Transactions pour l’Aide aux Citoyens, or the Association for the Taxation of Financial Transactions for the Aid of Citizens, which began by agitating for the Tobin Tax on foreign exchange transactions) in Europe. The economists and policy analysts at the Canadian Centre for Policy Alternatives (CCPA) offer progressive policy alternatives to neoliberal policies. In addition, a significant opposition to neoliberalism has grown in Latin America, a target of neoliberal policies. Prominent Latin American opponents include the Zapatista rebellion, and the governments of Venezuela, and Cuba.

Workers in the U.S. readily observe some of the symptoms of their decreasing welfare. Not only have many core countries’ labor aristocracy families been forced to have more than one bread-winner, but workers have been so heavily disciplined by capital and the capitalist state that, as Alan Greenspan said, they are “traumatized”.[11] Daniel Brook’s “The Trap: Selling Out to Stay Afloat in Winner-Take-All America” (2007) describes the anti-democratic political effect of decreased middle class welfare.[12] The massive U.S. military-industrial complex adds an extra layer of repression to working class traumatization, according to David Harvey (2005), making resistance seem unfeasible to most workers. A traumatized working class allows the capitalist class absolute reign, which modern history (the laissez-faire economic crises of 1873 and the 1920s) shows to be disastrous for economies around the globe, states, and working class people, but which is on average only beneficial or harmless for capitalists.[13]

Sometimes neoliberalism is referred to as the “American Model”, characterized by low wages and high inequality.[14] Neoliberal policies have contributed to a U.S. economy in which 30% of workers earn low wages (less than two-thirds the median wage for full-time workers), and 35% of the labor force is underemployed; only 40% of the working age population in the U.S. is considered adequately employed, according to economists David R. Howell and Mamadou Diallo (2007). The Center for Economic Policy Research’s (CEPR) Dean Baker (2006) has shown that the driving force behind rising inequality in the United States has been a series of deliberate, neoliberal policy choices including anti-inflationary bias, anti-unionism, and profiteering in the health industry.[15] However, countries have applied neoliberal policies at varying levels of intensity; for example, the OECD has calculated that only 6% of Swedish workers are beset with low wages. John Schmitt and Ben Zipperer (2006) of the CEPR have analyzed the deleterious effects of intensive Anglo-American neoliberal policies in comparison to continental European neoliberalism, concluding “The U.S. economic and social model is associated with substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration. At the same time, the available evidence provides little support for the view that U.S.-style labor-market flexibility dramatically improves labor-market outcomes…Despite popular prejudices to the contrary, the U.S. economy consistently affords a lower level of economic mobility” than all the continental European countries for which data is available.[16]

One of the most famous moments in neoliberal political history occurred when then-U.S. President Ronald Reagan’s advisors had him deregulate the thrift industry. This was promoted with the claim that a gigantic bonanza of growth and investment was sure to follow. Reagan signed the deregulation bill in 1982, grinning, “All in all, I think we’ve hit the jackpot.” The best reckoning is that deregulation bomb redistributed a trillion dollars from the public upward to capitalists’ private holdings.[17] While Reagan and the United Kingdom’s Margaret Thatcher laid the groundwork for working class traumatization through eliminating collective assets and giving away public assets to elites, destroying working class organizations like unions, and promoting insecurity, authoritarianism and militarization, less-flamboyantly anti-working class politicians have steadily continued the neoliberal tradition.

Neoliberalism under the U.S. Clinton administration–steered by Ayn Rand devotee Alan Greenspan and Robert Rubin– was the temporary and unstable policy inducement of economic growth via government-supported financial and housing market speculation, in conjunction with low unemployment and low inflation, made possible by the disorganization, disenfranchisement, and dispossession of the American working class.[18] Berkeley sociologist Angela Davis has argued and Princeton sociologist Bruce Western has shown that the astonishingly high rate of incarceration in the U.S. (1 out of every 37 American adults is in the prison system), heavily promoted by the Clinton administration, is the neoliberal U.S. policy tool for keeping unemployment statistics low, and stimulating economic growth through maintaining a contemporary slave population within the U.S. and promoting prison construction and militarized policing.[19]

Harvey (2005) sums up neoliberalism as a global capitalist class power restoration project. Neoliberalism, he writes, is a theory of political-economic practices that dedicates the state to championing private property rights, free markets, and free trade, while deregulating business and privatizing collective assets. Ideologically, neoliberals promote entrepreneurialism as the normative source of human happiness. Harvey also considers neoliberalization a form of capitalist “creative destruction”, a Schumpeterian concept.[20]

For Marxists, neoliberalism is a late-capitalist form of “primitive accumulation,” a collection of crisis-offloading and crisis-deferring mass strategies motivated by the conjuncture of the capitalist drive to appropriate social wealth and the inherent capitalist tendencies (overproduction/underconsumption, falling profit) to crisis. In the Marxist perspective, capitalism inherently tends to disruption and violence; so worker protest and insurrection is in effect coordinated disruption of automated disruption, to the end of replacing a a broadly disruptive and violent system with a more broadly-responsive social and environmental order.

Harvey observes that neoliberalism has become hegemonic world-wide, to a large extent by the constrained rationality imposed by capitalist incentives and culture, but also by extensive and intensive, and often violent, coercion. Opponents of neoliberalism argue that neoliberalism is the implementation of global capitalism through government/military interventionism to protect the interests of multinational corporations. Even neoliberal proponent Thomas Friedman has argued approvingly, “The hidden hand of the market will never work without a hidden fist.”[21] In its commitment to belligerent capitalism, neoliberalism is linked to neoconservatism.

Citations:

^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso: 196.
^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso.
^ Profit Over People: Neoliberalism and Global Order. Seven Stories Press. November, 1998. ISBN 1888363827
^ Harvey, David. 2005. A Brief History of Neoliberalism. Oxford: Oxford University Press.
^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso: 53.
^ Brooks, Daniel. 2007. The Trap: Selling Out to Stay Afloat in Winner-Take-All America. New York: Times Books.
^ Harvey 2005: 153
^ Howell, David r. and Mamadou Diallo. 2007. “Charting U.S. Economic Performance with Alternative Labor Market Indicators: The Importance of Accounting for Job Quality.” SCEPA Working Paper 2007-6.
^ Baker, Dean. 2006. “Increasing Inequality in the United States.” Post-autistic Economics Review 40.
^ Schmitt, John and Ben Zipperer. 2006. “Is the U.S. a Good Model for Reducing Social exclusion in Europe?” Post-autistic Economics Review 40.
^ Conason, Joe. 2004. “Reagan without Sentimentality.” Salon.com, June 8. http://dir.salon.com/story/opinion/conason/2004/06/08/reagan/index.html.
^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso.
^ Western, Bruce. 2006. Punishment and Inequality in America. New York: Russell Sage Foundation.
^ Harvey, David. 2005. A Brief History of Neoliberalism. Oxford: Oxford University Press: 2-3.
^ Friedman, Thomas. 2000. The Lexus and the Olive Tree. Anchor Press.

Junk Jobs

The New School’s Schwartz Center for Economic Policy Analysis has produced a working paper on accounting for job quality in assessments of labor market performance.

Here are some findings:

(1) The percentage of low wage workers in the US economy has remained the same since 1979; 30% of US workers earn low wages (operationalized as less than two-thirds of the median wage for full-time workers).
For comparison, the OECD measures Sweden with 6% low wage workers in its labor force (2005).

(2) About 35% of workers in the U.S. were underemployed in both 1979 and 2006.

(3) Only 40% of the working age population in the US is adequately employed. Is this the neoclassical econ goal?

The American Model is low wages and high inequality.

Here is the citation:

Howell, David R. and Mamadou Diallo. 2007. “Charting U.S. Economic Performance with Alternative Labor Market Indicators: The Importance of Accounting for Job Quality.” SCEPA Working Paper 2007-6. June 29.

Here is the link:

http://www.cepa.newschool.edu/publications/workingpapers/SCEPA%20Working%20Paper%202007-6.pdf

This data jibes with Esping-Anderson’s comparison of Anglosphere v. Scandinavian model labor markets.

enthralled

In this article below, a journalist reviews a book that shows the Right-wing political economy behind young people’s apathy today.

Caveat: I do not wholeheartedly recommend Salon.com, as it is infested with the foetid, dripping bile of virulent Democrats, only second in disgustingness and evil to Republicans. You have to be very careful not to hurt yourself by carelessly reading just anything on that website. The more those fucking Democrat assholes go after Cindy Sheehan, the more I like her. What would those sick bastards ever do if they weren’t protected by a two party system? In all the time I’ve tried to get Democrats I know to answer why the US even has two (2) capitalist parties, as opposed to one (1), they have been unable to produce an answer. Wonk jobs for sub-par liberals.

The Trap”

Are young Americans more interested in selling out than changing the world? Daniel Brook’s new book argues that 20-somethings are forced to choose between living by their ideals or making a living.
By Astra Taylor, in Salon.com

July 10, 2007 | Before I begin, I should confess to being one of those people prone to bemoaning the state of the world and wondering what’s wrong with my generation. At more than one antiwar event, geriatric radicals have far outnumbered young ones, which has left me feeling demoralized and forlorn. Dedicated young activists exist, but they’re a minority; my cohort’s general quiescence on Iraq and nonchalance about climate change — not to mention a zillion other issues — don’t reassure me about the future. (And don’t tell me the kids are all off organizing online. The median age of the average progressive blog reader — the backbone of the netroots — is my mother’s age.)

We’re accustomed to thinking of young people and students as the barometer of social change, so explaining this youthful inertia has become something of a national pastime, one that’s made it all the way to the opinion pages of the New York Times, the Washington Post, and the International Herald Tribune. Theories abound. Many point out that the war in Iraq is being fought by an all-volunteer army (which has even inspired some frustrated progressives to call for a reinstitution of the draft to invigorate campus activism). Others claim my peers’ cynicism stems from a lack of contemporary examples of successful collective action. But more often than not, the problem is conceived as cultural. Members of the emerging generation — post-Watergate, post-Monica Lewinsky, weaned on irony and satire — expect the government to deceive them and are hardly surprised, let alone outraged, when their expectations are met. Insulated from the suffering of the offline world by the virtual universe of Facebook, MySpace, and YouTube, some speculate that kids today are just too narcissistic, materialistic or distracted to care.

Daniel Brook, author of “The Trap: Selling Out to Stay Afloat in Winner-Take-All America,” would bristle at these descriptions of his age group. Instead, he provides ample evidence to back up another popular theory. Young people aren’t particularly self-absorbed or apathetic — they’re overworked and indebted. Today’s 20- and 30-somethings are so busy struggling to make ends meet, they simply don’t have time to take to the streets.

For anyone who read Tamara Straut’s “Strapped” or Anya Kamenetz’s “Generation Debt,” two excellent descriptions of the perilous economic realities assailing young people today, Brook’s primary point will be familiar: Compared with our parents at the same age, we’re working longer hours for less money, reduced job security, slashed benefits and fewer social services. Over the last four decades, as the income gap has exploded, opportunities for social mobility have declined — dramatically. But Brook, more than the other authors, is concerned with the social implications of this transformation. Given these unpalatable truths, what’s a youthful idealist to do?

“The Trap” opens with an anecdote hinting at one possible solution: Sell out. Milling about a wedding party, Brook sheepishly confesses his book’s thesis to a young man who works for Goldman Sachs. To Brook’s surprise, it turns out the guy’s a leftist who went to Wall Street only after years of trying, and failing, to make it as a muckraking journalist. “That’s how hegemony works,” the reluctant broker tells Brook. “The system can contain all of the dissenters.” The other option, to use Brook’s terminology, is to be a saint. Let your student loans fall into default, rent a cheap, dingy room, go without healthcare, plan on staying childless; that’s the price you pay for following your passion or adhering to your ethics.

To his credit, Brook isn’t out to pass judgment on his subjects or chastise them for the compromises they’ve made. Instead, his salient point is that the dichotomy foisted on us — becoming a sellout or a saint — is one that “has no place in a prosperous modern democracy.”

Beginning with the Gramsci-quoting Goldman Sachs employee, Brook tells countless stories of young people wrestling with similar trade-offs. He speaks to Claire, a 27-year-old New Yorker lucky enough to escape the purgatory of wage slavedom. She’s secured a 9-to-5 job at a nonprofit combating sex trafficking, but like so many altruistic industries — from public-interest law to social work — it doesn’t pay enough to cover necessities like rent and food. So Claire spends 14 hours each weekend working as a waitress on the Upper West Side. There’s also Karl, co-director of San Francisco’s Living Wage Coalition, who lives in a humble boarding house and has to take paying gigs on the side to make ends meet; and Brendan, a former lawyer at the progressive Center for the Study of Responsive Law, who switched career tracks for the bigger paycheck needed to buy a house within commuting distance of D.C.

Public service and penury, Brook demonstrates, too often go hand in hand. As a result, “the activist community has become an assemblage of idealistic young people taking a few years off before professional school or a corporate job, a handful of liberal trustfunders, and a slew of eccentric nonconformists.”

Brook’s analysis is strongest — and most shocking — when he compares the current situation to the experiences of the previous generation. The 1960s and 1970s were a high-water mark of social mobility in the United States, with education serving as the great equalizer. In those days a Pell Grant covered nearly three-quarters of a student’s college tuition; today, the portion has fallen to one-third. It’s difficult to fathom that many high-quality public schools like CUNY and Berkeley were once free, and private ones reasonably priced. Brook points out that Ronald Reagan instituted tuition at Berkeley — reversing a 100-year-old tradition — only after the Free Speech Movement of the early 1960s, a ploy to punish radicals. “In the end,” Brook writes, “tuition and other conservative economic policies did more to undermine student activism than any CIA-style investigation ever could.”

“In 1970, when starting teachers in New York City made just $2,000 less than starting Wall Street lawyers, people who wanted to teach taught,” Brook explains. “Today, when starting teachers make $100,000 less than starting corporate lawyers and have been priced out of the region’s homeownership market, the considerations are very different.” Brook also cites Ellen Willis, the cultural critic and feminist, who savored reminding readers that she could once live for months in the East Village off the fee she made from one magazine feature. Salaries in many fields that attract creative, liberally educated people — teaching and journalism to name only two — have stagnated while the costs of education, housing and healthcare have gone through the roof. All of which raises a few questions: What would the social movements of the 1960s have looked like if baby boomer collegians had been stifled by the same educational debt as their children? What if they hadn’t been buoyed by the broadly shared prosperity of the postwar era, or subsidized by a ratio of minimum wage to living expenses far more forgiving than what their offspring face in most metropolitan centers today?

Similar questions were asked — and answered — decades ago by prescient right-wing organizers. As Brook explains in his introduction: “Conservatives saw what America looked like in the 1960s, with the most equal distribution of wealth in its history and liberals sitting-in and marching for even more, and they didn’t like what they saw. The wealthy were being taxed to open up their elite colleges to bring middle- and working-class students. The students were questioning authority, not cozying up to it in hopes of landing a job.”

“The Trap” devotes one chapter to tracing the ensuing backlash (William F. Buckley founds the National Review, Barry Goldwater runs for president, Reagan’s political star begins to climb in California) and outlining the economic policies it implemented (slashing income tax rates for the rich).

The outcome is a concentration of wealth not seen since the Gatsby era. “On Reagan’s watch,” Brook writes, “the number of households with incomes over $50,000 doubled, the number of millionaires nearly tripled, and the number of billionaires quadrupled.” America’s transformation into a nation with “literally millions of millionaires” has driven prices sky-high as working- and middle-class people compete with the ultra-affluent for finite goods like slots at prestigious colleges for their children and housing in desirable metropolitan areas. The postwar America, where progressive taxation meant blue-collar folk could afford to live in the same neighborhood as doctors and lawyers, or where an inner-city public school teacher’s yearly salary could pay the annual tuition at an eminent private university more than twice over, is long gone.

Thus “The Trap” isn’t solely about would-be revolutionaries — it’s about anyone who aspires to become or stay a part of America’s crumbling middle class. Besides education, we’re often told that the quickest path to achieving the American dream is entrepreneurship. In his chapter on self-employment, Brook convincingly documents the disconnect between dream and reality. Surveys show that almost twice as many Americans as Europeans have considered starting their own business, yet only 7.3 percent of our workforce takes the leap, compared with 14.7 percent across the pond.

Brook has an explanation for this seeming paradox: universal healthcare. “In Europe, working for yourself doesn’t affect your healthcare coverage,” he explains. “America is thwarting the very ambition that has long defined its people.”

No doubt Brook will take some heat from people who dismiss him on biography alone: a Yale graduate whining about the plight of other privileged, private school alumni. Aren’t there a lot of people worse off we should be worrying about? Granted, it’s not always easy to muster sympathy for the Ivy League “sellouts” profiled, many of whom seem a little too eager to believe that yuppiedom has become compulsory in this country. But by illuminating the economic realities that have compelled their compromises — and avoiding sanctimoniously siding with the “saints” — Brook convincingly argues that the problem is political, not personal. Many 20- and 30-somethings are unable to accept the sacrifices now entailed by the activist path, which is just how the architects of the conservative backlash wanted it.

So the question becomes, what kind of future’s in store when even children of relative privilege can’t afford to work for the public good? The answer is a scary one.

After reading “The Trap,” I’d wager the future we’re facing overflows with anxiety and self-loathing. When a generation reared to revere the idea of a meritocracy finds that a college degree — even one with honors from an Ivy — doesn’t guarantee middle-class comfort, let alone career fulfillment, cognitive dissonance ensues. Parents blame their offspring for failing to succeed (they gave them every advantage, after all), the offspring blame themselves (they jumped through all the right hoops), and few blame the system. As the competition to join or stay middle-class becomes fiercer, solidarity disappears and the barriers to membership in this insecure and apprehensive class grow higher. According to the New York Times, 2007 was the “most selective spring in modern memory at America’s elite schools.” You can bet that next year another record will be set.

While I have no quibbles with Brook’s prognosis or diagnosis (that we need a “new New Deal”: equitable access to higher education, reduced working hours, a less obscene salary gap, universal healthcare), I remain conflicted. On the one hand, the tale of would-be activists and artists — forced to choose between living by their ideals or making a living — is one I can relate to. In order to pursue my interests, I’ve followed in the footsteps of many of Brook’s subjects: leaving New York City for greener (that is, cheaper) pastures, a stint back with Mom and Dad, going without insurance, and paying only the monthly minimum to keep my in student loan debt from mushrooming ($40,000 is more than enough, let me tell you).

But I also know that social movements have long been made by people far worse off than this indebted generation. Two powerful revolts currently under way in this country — the Iraq Veterans Against the War and the push for immigrants’ rights — are led by individuals without wealth or privilege, though they have much to lose. Protesting vets risk seeing their meager benefits revoked, a prospect that puts their mental and physical health and their ability to afford college in serious jeopardy. Immigrants brave enough to speak out put their jobs on the line and gamble with the possibility of deportation. We need the new New Deal that Brook eloquently argues for. But some committed individuals — call them saints, if you must — are going to have to make some major sacrifices if we’re ever going to win it.