Fo’ shfubble my bubble

“It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose,” China Investment Corp Chairman Lou Jiwei said, August 28, 2009.

According to Okishio 1961 and Van Parijs 1980, stabilizing the falling rate of profit and staving off snowballing economic crisis depend on:
1) opening new labor-intensive sectors (requires increasing rate of innovation, so it’s not feasible in the long run);
2) increasing division of labor and specialization of firms; and
3) holding back/reversing pace of technological change, via takeovers, patent laws, large reserve armies of labor.
None of this works very well when wages are stagnant.
Of course, geographer David Harvey reminds us that production can also be shifted around the globe, in effect spatially juggling buying low and selling high, and so staving off profit rate decline. This seems to have been effective throughout capitalist history, but it seems like a complex strategy over time, and possibly destabilizing. What happens if, in staunchly depressing wages and production in affluent Region A, and only insufficiently increasing wages and consumption in Region B, you lose a quantum level of aggregate demand? I’d imagine that’s possible, due to the complexity of the system.

A lot to look forward to!


The RePimpOCrats

The Republicans and Democrats are the two competitive organizations in the business of pimping out to capital and the military the US state and its tax collecting capacity as well as Americans’ aspirations for democratic citizenship. Below Glenn Greenwald describes the Democratic Party, and, inadvertently, why the liberal US political system is not democratic.

“If one were to analyze matters from a purely utilitarian perspective, one could find ways to justify the White House’s attempt to write a health care plan that accommodates the desires of the pharmaceutical and drug industries [mandates (i.e., 50 million forced new customers) plus government subsidies to pay their premiums plus no meaningful cost controls (i.e., no public option)]. All other things being equal, it’s better — from the White House’s political perspective — that those industries not spend vast sums of money trying to defeat Obama’s health care proposal, that they not pour their resources into the GOP’s 2010 midterm effort, that they not unleash their fully army of lobbyists and strategists to sabotage the Democratic Party. That’s the same calculating mindset that leads the White House to loyally serve the interests of the banking industry that caused the financial crisis (we don’t want to make enemies out of of Goldman Sachs or turn investment bankers into GOP funders). Indeed, that’s the same mindset that leads the White House to avoid any fights with the Right — and/or with the intelligence community and permanent military establishment — over Terrorism policies (there’s no political benefit to subjecting ourselves to accusations of being Soft on Terror and there’s plenty of reasons to cling to those executive powers of secrecy, detention and war-making).

In essence, this is the mindset of Rahm Emanuel, and its precepts are as toxic as they are familiar: The only calculation that matters is maximizing political power. The only “change” that’s meaningful is converting more Republican seats into Democratic ones. A legislative “win” is determined by whether Democrats can claim victory, not by whether anything constructive was achieved. The smart approach is to serve and thus curry favor with the most powerful corporate factions, not change the rules to make them less powerful. The primary tactic of Democrats should be to be more indispensable to corporate interests so as to deny the GOP that money and instead direct it to Democrats. The overriding strategy is to scorn progressives while keeping them in their place and then expand the party by making it more conservative and more reliant on Blue Dogs. Democrats should replicate Republican policies on Terrorism and national security — not abandon them — in order to remove that issue as a political weapon.”

(“The central pledges of the Obama campaign were less about specific policy positions and much more about changing the way Washington works — to liberate political outcomes from the dictates of corporate interests; to ensure vast new levels of transparency in government; to separate our national security and terrorism approaches from the politics of fear. With some mild exceptions, those have been repeatedly violated. Negotiating his health care reform plan in total secrecy and converting it into a gigantic gift to the pharmaceutical and insurance industries — which is exactly what a plan with (1) mandates, (2) no public option and (3) a ban on bulk negotiations for drug prices would be — would constitute yet another core violation of those commitments, yet another bolstering (a major one) of the very power dynamic he vowed to subvert.”)

Greenwald, Glenn. 2009. “Has Obama lost the trust of progressives, as Krugman says?”, August 21.

See also: Krugman, Paul. 2009. “Obama’s trust problem.” The New York Times, August 20.

I don’t see why Americans need to accept the RePimpOCrats as their pimps. What are the RePimpOCrats going to do? Beat the American people? Deny them their heroin? If you’re selling your votes, via the 2 political parties, to capital and the military, why not do it for a higher price?…Though, uh, you’ll need to organize to do that. Otherwise, there’s too much competition among vote-sellers. OK. Obviously, in a libertarian system the only people who can organize are capitalists and military folks, not the demos (AKA mob). Well, if they can’t get democracy, Americans need to learn to extract something substantial from their political parties in exchange for those parties using people’s vote-vaginas in their 2-way competition to become the top capital servicer.

Conventional Wisdom on the Hegemonic Battlefield

“What I have seen during more than three decades in Washington is that many truths remain effectively hidden, even if technically they have been revealed. A rare moment of truth-telling can be easily overwhelmed by a steady barrage of falsehoods and an infusion of well-calibrated doubts.

Before long, it is the oft-repeated faux reality that is remembered. It becomes Washington’s conventional wisdom and then the official history. [See Robert Parry’s book Lost History.]

In the United States today, there is a massive infrastructure for spreading lies and distortions–a right-wing media machine that reaches from newspapers, magazines and books to cable TV, talk radio and the Internet.

By simple repetition, this machine can transform any crazy theory or bald-faced lie into something that many Americans believe.”

Robert Parry, 8/16/2009, quoted at FAIR.

US Neoliberal Model: The Myths, The Toll

Mark Wiesbrot at MRZine lays out 4 top neoliberal myths about the neoliberal US economy, as well as 4 costs of living by those myths:

MYTH 1) Neoliberal policy in the US has encouraged entrepreneurship.
REALITY CHECK 1) Entrepreneurs are relatively rare in the US. The US has pretty much the lowest percentage of small businesses of all the high-income countries (CEPR 2009). Expensive private health care poses a profound disincentive to small business in the US.

MYTH 2) The US is a meritocracy with high economic/social mobility.
REALITY CHECK 2) The US has Latin American-style socio-economic sclerosis. The probability that an American can struggle her way out of her economic station is way below other affluent societies, thanks not only to the bankrupting cost of getting sick, but also to the US’s post-1970 privatization of educa$hun costs. Let’s all give a hand to the belligerent law’n’order uberalles politics of Reagan there, who helped us (re)learn that the free market ensures social stagnation just as efficiently as feudalism.

MYTH 3) Because they discipline labor, neoliberal policies make US production competitive in the world market.
REALITY CHECK 3) When not in economic crisis, the US trade deficit under neoliberal policies ballooned to very high 6% of GDP. Thanks to wealth concentration, escalating prices, and big debt, Americans were molded into big consumers, not competitive producers. China produces for the world. What neoliberal policies are designed to do in the US is make the US a secure place for global capitalists to keep/grow their wealth, by any means necessary.

MYTH 4) The US’s barely-regulated, “market-friendly,” financial system is most innovative and efficient.
REALITY CHECK 4) Regardless of the copious self-congratulation at the time (pre-crisis), the financial system wasn’t innovative. Gambling is as old as the hills. It was sort of “efficient” in a sense, a sense that is socially irrational, from a perspective of democracy, equality, and broad freedom. What the unregulated financial system was good at was using smoke and mirrors to draw wealth out of the broad society, facilitating increasing consumption costs alongside broadly stagnating incomes. Though neoliberals gave us a different song and dance, in truth an unregulated financial market doesn’t create wealth. Its function is to concentrate what wealth there is.

In exchange for living on this set of myths, Americans (and on point 4, the world) pay the following price:

1) Almost no holiday time, almost no affordable time off to care for family, community, and self. Almost no parental leave policies. Almost no sick days. In other words, Americans stagger through with the barest minimum of time and resources for social reproduction.

2) A medical system devoted to making profits, which costs twice what public health care systems cost yet produces worse health results, measured across health indicators such as longevity and infant mortality.

3) The highest inequality of all affluent countries. In social animals such as humans, inequality is the principal component of chronic stress and, in affluent countries, consequent damage to health.

4) Despite the lack of entrepreneurial or productive dynamism, Americans use double the energy and produce double the carbon emissions of other affluent peoples. This is principally due to the fact that Americans cannot take time off of work to enjoy less-energy-intensive leisure activities. The go-to methods used by the neoliberal model to improve productivity are to make people work longer hours and to blow through more natural assets. Thereby, Americans devastate the environment and create entropy more than anyone else on the planet–basically, at a horrifying pace.

Population bomb

Here are two world population charts. The first depicts actual world population growth. I blame capitalism, what with chronological convergence and all the incentive to amass cheap labor and no incentive to improve quality of life.

The second chart shows what were to happen to the world human population if the current world reproduction rate of 2.6 children/woman on average dropped to 2 children/woman (ascending trend line) and 1 child/woman (descending trend line). The population Y-axis ranges from 0 to 10 billion persons. Currently we’re at 6.7 billion humans on Earth, and every 4 minutes the world human population increases by 1 million.

The chart above is found on page 273 of Weisman, Alan. 2007. The world without us. New York: St. Martin’s Press.

Put the two charts together. How do we reduce the birthrate and the human load? We need to stop desperately trying to grow profits and instead start building systems bent on distributional and procedural justice: reducing inequality first and foremost, including gender inequality. The historical record is very clear: Women typically have lots of babies when women don’t have the freedom to develop themselves. Moreover, as the red-greens say, it aint the poor people f**king the Earth over.

Imperial War Stimulates Population Increase

“Did mounting population exhaust the land, tempting Petexbatun rulers to seize their neighbors’ property, leading to a cycle of response that spiraled into cataclysmic war? If anything, (Arthur) Demarest believes, it was the other way around: An unleashed lust for wealth and power turned them into aggressors, resulting in reprisals that required their cities to abandon vulnerable outlying fields and intensify production closer to home, eventually pushing land beyond its tolerance.

‘Society had evolved too many elites, all demanding exotic baubles.’ He describes a culture wobbling under the weight of an excess of nobles, all needing quetzal feathers, jade, obsidian, fine chert, custom polychrome, fancy corbeled roofs, and animal furs. Nobility is expensive, nonproductive, and parasitic, siphoning away too much of society’s energy to satisfy its frivolous cravings.

‘Too many heirs wanted thrones, or needed some ritual bloodletting to confirm their stature. So dynastic warfare heightened.’ As more temples need building, the higher caloric demand on workers requires more food production, he explains. Population rises to insure enough food producers. War itself often increases population–as it did in the Aztec, Incan, and Chinese empires–because rulers require cannon fodder.”

Excerpted from Pp. 228-229 of Weisman, Alan. 2007. The world without us. New York: St. Martin’s Press.

Corruption in the US at the 21st Century

Transparency International (TI), the international community’s foremost corruption watchdog, compiles a global Corruption Perception Index every year wherein a variety of “yes-no” questions are posed to respondents from 180 different countries. The results are telling, and they lead to TI’s overall corruption rank for each state…

TI’s corruption barometer found that in Europe, Latin America and sub-Saharan Africa, political parties are perceived to be most conducive to corruption. In Asia, the Middle East, North Africa and the Western Balkans, suspicions lie with the civil service. And in North America, it is the parliament or legislature.

Most police officers in America do not require greased palms for their services. But if one wishes to attend a chicken cordon bleu dinner with Sen. Max Baucus of Montana, it will cost him $10,000 (fly fishing and camping in Big Sky Montana with the same gentleman only costs a quarter of that though). Congressman Joe Crowley’s company, however, may be purchased for a piffling $100, including karaoke—unless one wishes to buy in bulk and also attend a “VIP After Party,” in which case the bill rises to $1,000.

The going rate for lunch with Congresswoman Suzanne Kosmas seems to be around $500, as is also the price for a savory “Taste of Michigan” luncheon with Congressman Bart Stupak. And for those who feel like splurging, a seat at the “Healthcare Community Dinner Honoring Pete Stark” will set one back a modest $2,500.

Charlie Palmer steaks and health-care talk with Republican Sens. Chuck Grassley, Mike Enzi and Richard Burr costs either $2,000 or $5,000, depending on one’s desired propinquity to the head of the table…

Has the $787,641 to Max Baucus’ coffers (and, to be fair, he is but one of 535) from the health professionals industry since 2005 played any role in his shaping health-care reform legislation? …

Such is also the case for conservative Blue Dog Democrats in the House, such as Mike Ross of Arkansas, who just days after voicing his criticism of the progressively minded health-care bills was wooed with extravagant fundraisers by health-care industry lobbyists. (The Blue Dogs received) 25 percent more in contributions from the health-care and insurance industries.”

Excerpted from Whatley, Stuart. 2009. “American Plutocracy.” The Huffington Post, July 31.