Breaking Windows…or the Whole Welfare State?

In Le Monde, Brotherton & Phillips argue that a criminology theory, Broken Windows, became distorted by vulgar American social speciation (The poor are evil. Their automatic small transgressions cascade into crimes against the Order), and this corruption is what resulted in a recent, tyrannical Supreme Court ruling.

I like this analysis, in that it points to how even materialist explanatory frameworks become distorted within a conservative culture. (And why materialist explanations can never serve as adequate substitutes for historical-materialist explanations.)

Nonetheless, at the end of the day, any Supreme Court decision must be assessed in the context of that body’s other contemporaneous decisions, and there, unless we are hopelessly immobilized by fear, we must recognize a stark pattern has emerged.

 It is not simply that the Supreme Court justices fell prey to a bowdlerization of Broken Windows theory. That would be a tough enough problem to address. But in fact the situation is much, much more dire. The justices were selected for the Supreme Court because they are far from innocents. The US Supreme Court has come to revert to pre-liberal, end-of-days feudal British legal traditions, and this is not through a series of mishaps. SCOTUS sanctioned election fraud at the highest level; it has recently ruled in favor of capitalist class totalitarianism in the workplace; it has come to rule repeatedly in favor of state tyranny over citizen liberties; it is positioning itself to revoke Congress’ capacity to create welfare institutions. Through its interpretations and rulings, the both conservative and fundamentally elitist US Supreme Court is actively, systematically creating the legal framework for the decisive blows that convert the US to a ferociously capitalist class-biased night watchman terror state.

The working elite theory is that the conservative initiatives will bolster the investor confidence that the US, its dollar and its debts rely on. But the conservative theory of investor confidence is superficial, a symptom of a larger conservative misreading of capitalist accumulation incentives. Because of the 40+ year dominance of conservatism, the US economy is going down like a stepwise-imploding dirigible, and its elites will not fall without scrambling together a new age of serfdom and primitive accumulation—concentrated accumulation by any means possible.

Though they are always enchanted by American capital’s money, networks, organization, ready policy models, hype, and marketeers’ assurance, the rest of the world would do well to continue to turn away and let the Americans alone erect their self-rape and -pillage legal framework in their “exceptionalist” (British serfdom and imperialism meets American slavery and nuclear chain-reaction exploitation) tradition.

Marxists are correct about what is happening here. Despite their emotional rejection of Marxists above all, American liberals need to start to assess whether they will withdraw from the real world to protect their visions of marginally-conflicted, equilibrium, civilized capitalism, or whether they will get back in there and organize to defend the pillars of their crumbling, limited-Enlightenment utopia—from conservatives this time, again.

You have to ask yourself: Are you really comfortable with slavery and serfdom?, because these remain fundamental conservative institutions–entirely complementary to, we can see plainly before us, capitalism, wretched capitalism. Absolute power corrupts absolutely; and under a system of concentrated power–such as is capitalism, there is no high, easy road to progress.

Greece, Pinatified

Yanis Varoufakis posts Marshall Auerback’s “Greece and the Rape by the Rentiers,” with Varoufakis’ caveat that the best option is for Greece to default.

More on the austerity debacle in Greece
What the (Troika–the European Commission, European Central Bank, and International Monetary Fund) MOU (with the Greek parliament) is really all about:

“It’s a corporate wish list; a mix of punitive belt tightening policies for working people and perks for big oil, big gas, electric, aviation, railroads, communications etc. ‘Fast track licensing’ and baby food have nothing to do with helping Greece reach its budget targets. It’s a joke. … None of this has anything to do with helping Greece. It’s just corporate pillaging gone haywire. Greece is a big pinata that’s just been cracked open and everyone (Euro capital) is pushing and shoving to grab their fistful of candy. All of this is coming soon to a neighborhood near you. If not’s already there, that is” (Mike Whitney, quoted by Chris Floyd).

Bustin’ open the Greeks. Who’s next?

Athens in flames, Michael Dussault (quoted by Naomi Wolf): “’The rebellion has begun,’ the Greek resistance hero and veteran left-winger Manolis Glezos told reporters. Indeed, as students and anarchists fought back waves of riot police assaults on the occupied University Law Department, as hundreds of outraged protesters took over a TV station, and as plumes of smoke and clouds of teargas filled up the Athenian night skies, one thing became overly clear: the social situation in Greece has spun entirely out of control.”

Damned if it shouldn’t be. As Chris Floyd says, what Greeks are facing is down a few levels of hell lower than the imposition of Sharia law.

 There is no (0) possibility that an Anglo-American intervention (which is what a NATO intervention would be) could improve the lives of Syrians in the oil era. However, pro-democracy North Americans can support the Greeks, perhaps Spanish Civil War style? Or what about support in Spain? Right now Spaniards and the Portuguese need help fighting against the conservative state-facilitated anti-labor crusade.

Billy Bragg once composed a little song, RE: serving as a fightin’ tool for Anglo-American capital.

New consensus in Berlin, according to Varoufakis: As soon as Sarkozy wins the French Presidency, Germany will amputate Greece & Portugal (maybe Ireland too) from the EU, and cauterize the wounds by printing money.

Varoufakis thinks the strategy won’t work because:

1) German financiers are underestimating the substantial links between Portuguese banks and Spanish banks, and between Greek banks and German and French banks.
2) Injecting massive liquidity into European banks will Japan1990s-ize them.
3) The problem is in the uneven nature of capitalism, here the geographic core-periphery, that creates systemic trade imbalances, and the lack of a GSRM (global surplus recycling mechanism) in Europe. This problem will not be addressed by the German financier’s solution. So when a couple of countries are amputated, the problem will move over and take up residence in the remaining periphery–Italy, Spain– requiring further amputations.

Richard Koo explains why the Japanese banks failed, and what that means for Europe.

Economic Leadership Today: A Report from the Trenches

 The tiny bit of progress in elite thought on institutionalized, socially-subsidized banking failure and Western working-class economic decline: Conservative economists and policymakers are finally acknowledging inequality, and vaguely entertaining the Occupy-introduced notion that inequality might not be all they fantasized for us after all.

Unfortunately, they have no conceptual tools or will to address it. Stale, refried 1991 Robert Reich (Such as is presented by the elite economic consensus in the OECD’s “Divided We Stand“. Yeah, that’s not a typo. Remember for capitalist conservatives, inequality is thought to create stability–by diversifying economic preferences and market niches.) aint going to do it.

I attended and wrote note notes last night at a panel on Canadian business’ relationship to inequality and Occupy protest, provided by the business school for the benefit of the business community in a Canadian city.

Businessmen in the audience said they wanted to stay with the “globalization makes inequality necessary” line. They like that, know it, don’t want to abandon it. Feels good.

 But it’s killing off your consumer market, and there can only be a few Walmarts in monopoly capitalism, replied the business profs. Can you businessmen at least think about maybe taking some of your profits and investing them in local charity works, or in Living Wages?

The progressive business profs tried to introduce the idea that inequality has costs, to human health,  to human capital, and economic costs in the form of consumer market decline.

The idea that inequality has human and economic costs did not appear to register with the businessmen and business students in the audience. On the one hand, the audience managed to respond that they expect the Chinese to replace failing Americans as the consumer market to the world; on the other hand, they expect to still keep super-exploiting starvation-wages Chinese labor. Cake; eat it too. So that’s the quality of plan you get from the leaders of a high-inequality regime.

The business school dean authoritatively lectured on how Canada should respond to economic inequality. He cribbed the OECD’s “Divided We Stand”. His takeaway OECD message? Stay the course; Occupy will fade; the problem is simply that some people just aren’t techno-skilled enough–ergo Canadian businesses should engage in more in on-the-job training. 

 It’s good to read this OECD report so you know how your elite are failing.

 The business dean refused to acknowledge parasitic over-financialization’s relationship to unyielding Western economic gout. Over-financialization, at the root of economic destruction and political sclerosis, is not on elites’ radar as a problem.

You might be interested in knowing that the business dean and business profs said that elites are hoping on securing the continued loyalty of the top 30-40% income earners, at least within Canada, to help maintain their order. Is that you?

 …Because I know 30-40%ers who are having their incomes actively suppressed right now by the neoliberal machinery in place. They’ve got big and growing education debt and housing debt–or they don’t live middle class in significant ways/aren’t bought off. Neoliberalism has a life of its own. The  middle class buy-off is in decline, and that means that the discipline that the middle class enforces is  slated to follow… and though they are still purportedly relying on it, this decline is off elites’ radar! Good thing they’re still over-“investing” in guard labor.

 Their leadership is not as irreplaceable as their money leads businessmen and their technocrati to believe they are.

Financial Economic Power = Political Stranglehold

The Crisis in the Eurozone
by James K. Galbraith
Salon.com

 “(T)he ECB refuses to solve the crisis at a stroke, which it could do by buying up the weak countries’ bonds and refinancing them. The argument against this is called “moral hazard,” buttressed by old-fashioned inflation fears, but the real issue is that to do so would admit loss of control by creditors over the central bank. Actions parallel to those taken by the Federal Reserve – nationalizing the entire commercial paper market, for instance – would repel the ECB, even though it does buy up sovereign bonds when it has to.

[MF: This is all a polite, econ-theoretical way of saying that the ECB is the tool of financial capital, not a manager of social or economic welfare.]

 So instead the zone has gone about creating a gigantic toxic CDO called the European Financial Stability Fund, which may shortly be turned into an even more gigantic toxic CDS (like AIG, they will call it “insurance”). This may defer panic at most for a little while.

 Technical solutions exist. The most-developed of these is the “Modest Proposal” of Yanis Varoufakis and Stuart Holland, widely backed by older political leaders in Europe. It would 1) convert the first 60 percent of GDP of every eurozone country’s debt to a common European bond, issued by the ECB; 2) recapitalize and Europeanize the banking system, breaking the hammerlock of national banks on national politicians; and 3) fund a New Deal-like program of investment projects through the European Investment Bank.

 Variant proposals include Kunibert Raffer’s call for a sovereign insolvency regime modeled on the U.S. municipal bankruptcy statute, Thomas Palley’s proposal for a new “government banker” and Jan Toporowski’s proposal for a tax on bank balance sheets to retire excess public debt.

 These are the best ideas and none of them will happen. Europe’s political classes exist these days in a vise forged by desperate bankers and angry voters, no less in Germany and France than in Greece or Italy. Discourse is sealed off from fresh ideas and political survival depends on kicking cans down roads so that the fact that this is a banking crisis does not have to be faced. The fate of the weak is at best incidental. Thus every meeting of finance ministers and prime ministers yields treacherous half-measures and legal evasions.

Political fragility also explains the fury in France and Germany when George Papandreou [the calmest man in Europe, by the way, having been born and raised in Minnesota] sought to cut the knot of his rebellious ministers, irresponsible opposition and angry public by putting the latest austerity package to a vote. God help the bankers! The move was fatal to Papandreou in short order, and Greece will now be turned over to a junta of creditors’ deputies if such can be found willing to take the job. It won’t be anyone who wants to continue to live in Greece afterward.

Greece and Ireland are being destroyed. Portugal and Spain are in limbo, and the crisis shifts to Italy – truly too big to fail – which is being put into an IMF-dictated receivership as I write. Meanwhile France struggles to delay the (inevitable) downgrade of its AAA rating by cutting every social and investment program.

If there were an easy exit from the Euro, Greece would be gone already. But Greece is not Argentina with soybeans and oil for the Chinese market, and legally exit from the Euro means leaving the European Union. It’s a choice only Germany can make. For the others, the choice is between cancer and heart attack, barring a transformation in Northern Europe that not even Socialist victories in the next round of French and German elections would bring.

[MF: Here, I would demur. This explains why Greece hasn’t exited so far. But at this point, why not choose exit? Everybody proper said, following orthodox theory, that exit wouldn’t work for Malaysia, Argentina, etc. as well. But it did. Considering the empirical evidence at this point in history, and adding to that game theory logic, I think exit is the only rational option now.]

So the cauldrons bubble. Debtor Europe is sliding toward social breakdown, financial panic and ultimately to emigration, once again, as the way out, for some. Yet – and here is another difference with the United States – people there have not entirely forgotten how to fight back. Marches, demonstrations, strikes and general strikes are on the rise. We are at the point where political structures offer no hope, and the baton stands to pass, quite soon, to the hand of resistance. It may not be capable of much – but we shall see.”

…..

There remains a popular or perhaps professional conservative economist’s insistence that the cause of economic crisis in Europe is immoral Greek consumer and political behaviour. That might be an opportune, EZ, resonant, discursive tactic if you’re a Greek with a meso-political axe to grind or a conservative economist clinging to the wire monkey mother of your dogma.

As someone who was hounded by bankers and real estate agents to buy a house in the US at the peak of the bubble (and of course I was! I was even given a whole book by the realtor explaining in simple terms that if I bought a home, I could be part of the Infinite Pyramid Scheme (TM) and someone would without fail buy that home from me for an even-more inflated price.), when I had just graduated from my PhD program with grotesque mounds of student debt, I know good and well that moralistic arguments about the consumer root of economic crises are full-on undiluted bullshit, toxic CDOs, if you will.

To still buy those toxic funds, you would have to be completely autistic; hallucinating nothingness in the face of mass marketing, highly-unequal social status and institutionally-flogged hegemony; utterly blind to the global quality of the economy; and abjectly deaf to the extreme variations in money-borrowing and -lending power. You would have to be a conservative economist, or the slave of some such defunct economist).

Debt + No Class Compromise > Delay > Asset Liquidation

If you get your rocks off by pursing your lips sourly and pointing fingers at more-or-less hapless pawns, here’s a link to Greg Palast’s observation of one of the proximate causes of Greek economic crisis. The conservatives had to borrow from financial capital in order to temporarily prop up the pretense that the financial capitalist’s order works, and the conservatives can operate it. The order, one of primitive accumulation, doesn’t, cannot work for most societies and people and environments. So what were conservatives supposed to do? Admit that, and lead the socialist revolution? THAT WAS NEVER GOING TO HAPPEN. Did I even have to caps-lock that? No. Conservatives’ only (pro-system) choice was debt-to-delay. So that is not a choice.

Now, should any working class person ever elect a liberal, let alone a conservative, to represent her in the political sphere? No. Absolutely not. Because that debt-to-delay non-choice is exactly what you get from them. Fetishizing the politicians’ systematic corruption is kind of perverse and creepy and stunted, given it’s about “catching” them doing what they are ideologically-constrained and coached to do.

Regardless of Keynesians’ belief that states can deficit spend, everyone believes in debt–or money liquidity, as it’s known when we’re not being manipulatively moralistic. It’s a fundamental part of economies, as well as pious, exploitative moral economies. Debt was the key to US military-economic dominance in the latter half of the 20th century, and this constrained everyone else’s options–especially in Europe, not to even mention how the financialization/debt model was sold, was saturation-marketed as the 1-Tru (TM) path to infinite economic expansion and happyness.

But of course the underlying problem is that actually-existing financialized capital is principally a tool for primitive accumulation–appropriating, concentrating and controlling value and exchange. In other words, debt-to-delay leads inexorably to wicked public and smallholder asset liquidation and a continuous and depleting debt-to-liquidation cycle, or else one helluva social fight to force garbage investors to take the losses on their garbage investments and to clean up their investment practices.

Our elites are very diligent at reminding us about the terms of their protection racket: that if investors are forced to be prudent, they will withhold liquidity and offload the costs onto the working class and the public. However, the traditional  threats have begun to mean nothing, because the primitive accumulation debt-to-liquidation cycle has resulted in withheld liquidity and economic crisis offloaded onto the working class and smallholders anyway. When there’s no class compromise, the hegemonic leverage wears down quickly, leaving bare brutality.

Unless we fight to reduce its power, we cannot escape capitalist primitive accumulation and our own over-determined economic dispossession and depletion. Yet we still have a wide range of commentators declaring TINA on austerity. There are alternatives. The alternatives simply do not support financial-military global monopoly capitalism.

Thus, faced with this impassible dilemma, (much like the 20% (a low) of Americans who still somehow believe that they will be in the top 1% of wealth accumulators) paid experts somehow still desperately pretend to believe that there is a universal, moral path to wealth accumulation in a fictitious 2-D world without power, and that little Greece, if they’d just been more moral, could have followed that yellow brick road, paved by the benevolent financial system devoted to unproductive accumulation and geo-political power moves undertaken by the financial capital centers of the US (US banks own over 10% of Greek risk), England, France and Germany in the west, and oil capitalists and China eastward. The level of political- economic and geopolitical naivete required to maintain this moral handwringing and within-Greece fingerpointing is flabberghasting at this point in history.

Within the context of global monopoly capitalism, nothing could have been done for the welfare of peripheral small economies (countries) like Greece. Financial-military capital has not been and is not aligned for this. That this mal-alignment destroys capital and undermines the Greek, European or global economy is not a problem to financial-military capital–especially not when the dollar as world reserve currency automatically secures such resolute US dependability for capital. (Which is why OWS is so important to disciplining global speculation.)

Someday, the capitalist lords and retainers claim, global monopoly capital may get in the mood or accidentally do something to benefit non-elites. You just never know. It’s happened (with some considerable drawbacks, including population explosion, scarcity and environmental catastrophe. But dammit some of us did get those nice SUVs for a while in some places.) In the face of their brutal solipsism and frigidity, the deity-bankers only ask for assurances that, as long as you or your politicians are worried about liquidity for your society’s survival (assuming of course that we’re not interested in bothering to establish a global network of rebellion), they are entitled to the wealth your society creates into the future. This is the blackmail of late monopoly capitalism. To really paraphrase Nixon all out of recognition, perhaps we all have Stockholm Syndrome now. You give your wealth. You get a steady supply of bloody fingers, etc. in the mailbox. It all ends when you open up the envelope to find your own bloody heart muscle wrapped in a tissue.

And for what? Regardless of what happens to the body, the economy or societies or the environment, as long as they get the wealth, financial capital wins. –Perhaps we go along with it because we think the capitalists are sexy (Thanks for the beer goggles, Frank Luntz!), because even all the militarized cops can’t follow all of us around in our daily rounds of assiduous obedience.

Class War with a Little Generation War on the Side

According to the recent Pew Social & Demographic Trends study,

The current (generational wealth) gap is unprecedented. In 1984, the age-based wealth gap had been 10:1. By 2009, it had ballooned to 47:1. Older people today have 47 times more money than younger people; and they have 42% more wealth than their same-aged counterparts in 1984, while the younger generation has 68% less than theirs.

Someone needs to use the Pew data and write on the Silent & Boomer Generations’ little cut of our era’s  class war. We should be able to talk about how the younger generations were sold out, without the Republicans co-opting the discussion for their anti- working class institutions (Medicare, social security) campaigns.

Sources of intergenerational (young to old) wealth transfer: housing bubble, privatized education & student loan debt, deunionization & stagnant incomes, pension funds & bank bailouts.

And that’s not even talking what devastation they wrought on the environment, just to keep floating atop their magical oil geyser kingdom. With sincerest apologies to that punk Tom Brokaw, the point is not that some generations are holier or more evil than others. The point is that we need to learn how to recognize when we’re selling out the future, stop ourselves from selling out the future, and formulate a real sense of wealth (cf J. Schor). In order to see class war, we need to be able to see how class warfare strategically manages (inter alia) generation divides.