I was very glad this week when Barack Obama was elected the 44th President. While I did not support him in this election, I supported the Green Party, there is no doubt that he was the better of the two major party candidates. I was also happy to know that a multi-ethnic “mixed-race” family will be in the White House. These facts alone will make for a better political climate than we have seen for the past 8 years.
While the latest financial crisis has become the main issue for politicians and citizens alike, I hope that this new Obama administration begins to deal with another major crisis: the environmental crisis. As climate change has become the top environmental issue, this is obviously the place to start. A majority of Americans finally understand the gravity of this situation, even after years of privately funded media and political campaigns that attempted to obscure and confuse the public about the science. It worked for the most part, but the science has become stronger and much, much more difficult to refute and obsure. A recent article written by a number of climate scientists, and lead by James Hanson (one of the foremost experts on climate science), sates that:
“If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted, paleoclimate evidence and ongoing climate change suggest that CO2 will need to be reduced from its current 385 ppm to at most 350 ppm, but likely less than that.”
This is a serious issue and requires major social changes in order to begin to address it. Scientists are saying we have basically past the tipping point. This means we need to act fast. This cannot be put off any longer.
Today’s NY Times includes an op-ed by Al Gore on this issue. I think it is a pretty good piece. He also recently wrote one for the Wall Street Journal, which I don’t think was as good. Obviously, he knows his audience and the WSJ article is all about “sustainable capitalism.” In the NYT, Gore points out that a transformation in our energy system is possible. It will take huge government investment, but this is not unprecedented. Government has always played a role in investing in technology, albeit mostly military technology. The most recent government investment in the financial sector is another example of how government can spend lots of money any way it wants to in order to pursue certain goals. In the case of the financial bailout the goal happens to be to maintain the powerful Wall Street order, and prop up the capitalist system.
We have seen what government can do if it is motivated to act fast. Money printed, handed out, and invested. I won’t get into a critique of this bailout, as I think it is written by the wealthy and powerful and heavily skewed towards the wealthy and powerful. But clearly, government can develop a new energy infrastructure if it deems that it is necessary. The NYT piece points towards government investment and leadership in dealing with a major crisis that is already impacting global society. We need to realize that the notion that capitalism will adopt sustainable approaches because they are profitable ignores the extant power relations that drive our current energy industry and climate crisis.
The government, with the support of the people and in the name of the people, must step in to plan a better energy system that helps to resolve this impending crisis. For instance, if the government is going to be handing out money to banks, and other financial institutions, and now is talking about bailing out Detroit, why don’t they attach some strings such as promoting alternative energy projects and better public transport? Car companies can be pushed towards changing technology and finance towards important social investments. We have seen what the idea of unbridled “free” markets bring. Wealth for the few elites, struggle for the rest of us, and climate destruction.
However, we cannot rely solely on the government to fix this problem. It will take community action and movements to make it happen, but the amount of money necessary will also require some larger institutions. What is more, it is not only about technological fixes and new infrastructure. There is no way that we can address this problem without including energy conservation measures, and this will likely be the most important component. This requires more than replacing old light bulbs with high efficiency light bulbs, but changing the way we live our lives. These changes will be enormous as well, and will require a major transformation in our social goals. But that is for another blog.
Regular people and communities need to be politically active in order for new measures to be successful. The environmental crisis we face is at least as serious as (in the long-run more serious than) the financial crisis that we are witnessing. I am hopeful that the new climate of revived interest in political processes and issues will translate into increased awareness and action by the people on serious environmental concerns.
Sunday, November 9, 2008
Saturday, October 11, 2008
Is this Socialism?
With all of the bailouts and public infusions of cash into the private sector, the word “socialism” has been tossed around throughout the media. This is quite an interesting turn of events. Free market ideologues, including the point figures on the bailout, are now asking government to fund the buying of private debt, and infusing cash into private banks. These ideologues have been fueled by economic theory that has been labeled “scientific” and “value-free.” They were supporting their arguments by saying that the free market capitalist system is the “end of history,” implying that the system works harmoniously with the laws of nature and there was no other system that could supersede, what Adam Smith called, “obvious and natural system of liberty.” Now they are making an about face. So much so that Dana Perino the White House spokesperson stated that Bush was going against his “instinct” in order to deal with the financial meltdown. They are overtly looking to government to resolve another crisis of capitalism.
But is this socialism? Hardly. Maybe some would cynically call it financial socialism or socialism for the wealthy, but socialism cannot be simply characterized as the government infusion of cash into markets. Government in the United States has been propping up capitalism and capitalists for years. Whether through public spending programs on infrastructure, military spending, or tax laws, the idea that the free market has been unfettered is quite ridiculous. Forget about “the invisible hand” guiding rational decisions in the marketplace, there has been a visible arm that has been keeping capitalism from drowning for many, many decades. This "bailout" stuff is just more obvious.
These recent policy decisions to bailout Wall Street have been called socialism, but socialism involves a lot more than simply government involvement in propping up the economy. In fact, labeling the recent actions as “socialist” only furthers the misconceptions about what socialism means and, in many ways, further alienates people from moving to change a clearly broken system. This is policy dictated by Wall Street bankers and conservative economists in order to maintain the status-quo. This is not about change at all. Furthermore, this is not a democratic process in any way. Contrary to popular conceptions, socialism can and should be democratic, emerging from ordinary peoples needs and directed by grass roots activity. This current policy does not resemble this in any way. Sure Congress voted on it, but by now it should be clear who the represent.
I don’t know what a new and better system will look like, but certainly keeping the foxes guarding the hen house cannot resolve this and move us into a better social situation. We need to begin to actively change this abominable system in a democratic way. Socialism may be one direction for us to consider; basing a system on people’s needs and ecological principles rather than simply the need to expand of profits. Certainly what we have right now does not work, and it is quite impossible to argue the contrary considering the current crisis. Maybe this will begin to break down the misconceptions about capitalism, and hopefully this will open our eyes to the possibilities of a truly new way to think about society: politically, economically, and culturally.
But is this socialism? Hardly. Maybe some would cynically call it financial socialism or socialism for the wealthy, but socialism cannot be simply characterized as the government infusion of cash into markets. Government in the United States has been propping up capitalism and capitalists for years. Whether through public spending programs on infrastructure, military spending, or tax laws, the idea that the free market has been unfettered is quite ridiculous. Forget about “the invisible hand” guiding rational decisions in the marketplace, there has been a visible arm that has been keeping capitalism from drowning for many, many decades. This "bailout" stuff is just more obvious.
These recent policy decisions to bailout Wall Street have been called socialism, but socialism involves a lot more than simply government involvement in propping up the economy. In fact, labeling the recent actions as “socialist” only furthers the misconceptions about what socialism means and, in many ways, further alienates people from moving to change a clearly broken system. This is policy dictated by Wall Street bankers and conservative economists in order to maintain the status-quo. This is not about change at all. Furthermore, this is not a democratic process in any way. Contrary to popular conceptions, socialism can and should be democratic, emerging from ordinary peoples needs and directed by grass roots activity. This current policy does not resemble this in any way. Sure Congress voted on it, but by now it should be clear who the represent.
I don’t know what a new and better system will look like, but certainly keeping the foxes guarding the hen house cannot resolve this and move us into a better social situation. We need to begin to actively change this abominable system in a democratic way. Socialism may be one direction for us to consider; basing a system on people’s needs and ecological principles rather than simply the need to expand of profits. Certainly what we have right now does not work, and it is quite impossible to argue the contrary considering the current crisis. Maybe this will begin to break down the misconceptions about capitalism, and hopefully this will open our eyes to the possibilities of a truly new way to think about society: politically, economically, and culturally.
Sunday, September 21, 2008
The Crisis of Inequality
I f I recall correctly, both Greenspan and Bernanke made statements in 2005 that either the housing bubble was not necessarily going to be a problem, that no intervention was needed, and that drops in housing prices would have a limited effect on the broader economy. To those of us that have seen that this house of cards was going to crash and that it would have huge effects, this is, unfortunately, a moment of vindication.
But this is barely pessimistic guessing about our economy and financial systems future. This top-heavy house of cards has been building for decades not a few years. It is interesting that politicians, such as McCain last week, like to state that the economic “fundamentals” are sound, in their attempt to maintain confidence in a failing system. It becomes very clear in a situation like this that the economic fundamentals of this economy on are undermining themselves.
So-called pessimists have in fact developed a critical analysis of the systemic problems that face our social system. So even when economists and media pundits have lauded the growing economy, we have understood that it was based on smoke on mirrors. Record private and public debt, stagnating wages for working class, environmental destruction and mass exploitation, intimidation, and terrorization of peoples of the global South, have been some of the “fundamentals” that have propped up this system
This economy is built on the mass accumulation of wealth by a small class of investors and owners, as well as their close circles of associates. Interestingly, as record numbers of Americans are defaulting on loans, hundreds of thousand losing jobs, losing healthcare, struggling to pay the bills, the rich have never been richer. The easiest way to see this is by looking at census data for the last 40 or so years. This information comes from United States government data: Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households, All Races: 1967 to 2006.
Between 1967 and 2006 the share of income received by the top 5 percent grew from 17.2% to 22.3%; the top 20 percent from 43.6% to 55.5%. At the same time the middle fifth’s income dropped from 17.3 to 14.5 percent and the bottom 20 percent dropped from 4.0 to 3.4%. In fact every income group saw a drop in income (naturally, adjusted for inflation) except for the top 20 percent. This of course is only income and does not consider wealth, which includes all assets and income, and shows much greater disparities.
In a March 29, 2007 NY Times article entitled “Income Gap Is Widening, Data Shows” stated that
“Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.
The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression….
The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.
The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980….”
This growing inequality has impacted the American economy in countless ways. In one testimony to Congress, even Bernanke alluded to the fact that it may cause some problems, but didn't , as I recall, go into too much detail. However, I imagine that his problems are different than those that I have in mind. The fact of the matter is the system is geared towards exacerbating inequality. It is built on sucking wealth to the upper class. That is what it is, in essence, supposed to do.
This crisis is no different. Million or likely billions of dollars were being made based on speculation and when the game is over, we will suffer the consequences. The elite class made a killing on this speculation; everyone else will pay for it.
Unless we address these fundamentals, the fact that we have a economic system that thrives on wealth for the few and struggle for the many, these crisis will continue and the middle class and particularly the poor (global as well as American) will continue to suffer the effects of them. Borrow to make ends meet and increase debt. Get another credit card, consolidate debt, and take a second mortgage.
But this is barely pessimistic guessing about our economy and financial systems future. This top-heavy house of cards has been building for decades not a few years. It is interesting that politicians, such as McCain last week, like to state that the economic “fundamentals” are sound, in their attempt to maintain confidence in a failing system. It becomes very clear in a situation like this that the economic fundamentals of this economy on are undermining themselves.
So-called pessimists have in fact developed a critical analysis of the systemic problems that face our social system. So even when economists and media pundits have lauded the growing economy, we have understood that it was based on smoke on mirrors. Record private and public debt, stagnating wages for working class, environmental destruction and mass exploitation, intimidation, and terrorization of peoples of the global South, have been some of the “fundamentals” that have propped up this system
This economy is built on the mass accumulation of wealth by a small class of investors and owners, as well as their close circles of associates. Interestingly, as record numbers of Americans are defaulting on loans, hundreds of thousand losing jobs, losing healthcare, struggling to pay the bills, the rich have never been richer. The easiest way to see this is by looking at census data for the last 40 or so years. This information comes from United States government data: Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households, All Races: 1967 to 2006.
Between 1967 and 2006 the share of income received by the top 5 percent grew from 17.2% to 22.3%; the top 20 percent from 43.6% to 55.5%. At the same time the middle fifth’s income dropped from 17.3 to 14.5 percent and the bottom 20 percent dropped from 4.0 to 3.4%. In fact every income group saw a drop in income (naturally, adjusted for inflation) except for the top 20 percent. This of course is only income and does not consider wealth, which includes all assets and income, and shows much greater disparities.
In a March 29, 2007 NY Times article entitled “Income Gap Is Widening, Data Shows” stated that
“Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.
The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression….
The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.
The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980….”
This growing inequality has impacted the American economy in countless ways. In one testimony to Congress, even Bernanke alluded to the fact that it may cause some problems, but didn't , as I recall, go into too much detail. However, I imagine that his problems are different than those that I have in mind. The fact of the matter is the system is geared towards exacerbating inequality. It is built on sucking wealth to the upper class. That is what it is, in essence, supposed to do.
This crisis is no different. Million or likely billions of dollars were being made based on speculation and when the game is over, we will suffer the consequences. The elite class made a killing on this speculation; everyone else will pay for it.
Unless we address these fundamentals, the fact that we have a economic system that thrives on wealth for the few and struggle for the many, these crisis will continue and the middle class and particularly the poor (global as well as American) will continue to suffer the effects of them. Borrow to make ends meet and increase debt. Get another credit card, consolidate debt, and take a second mortgage.
Saturday, September 20, 2008
Obamanomics
Down below at the end of this I pasted something I sent out a while ago, but it very relevant right now. As the financial crisis comes to a head, we see that neither of the leading candidates has any real critique of the systemic problems that we face. McCain is, by his own admission, completely ignorant of these things. Although, he does know all about how to make war. So that is his contribution to the economy. Obama does not offer any real solutions either. Yesterday he said
"Today, I fully support the effort of Secretary Paulson and Federal Reserve Chairman Bernanke to work in a bipartisan spirit with Congress to find this kind of solution.
What we’re looking at right now is to provide the Treasury and the Federal Reserve with as broad authority as necessary to stabilize markets and maintain credit. We need a more institutional response to create a system that can manage some of the underlying problems with bad mortgages, help homeowners stay in their homes, protect the retirement and savings of working Americans."
He basically agrees with what the administration is doing to address the financial crisis. He agrees with Bush, Paulson, Bernanke, etc.. all Republicans. All people of the party that is supposed to be so different than the party that he represents. How strange. I don't know how it could be made clearer that they are all beholden to the same financial institutions, i.e. corporate america, i.e. the elite class, i.e. the capitalist class. This is a major problem and a major reason why Obama is not about real change. This is tied to a number of concerns including why we are fighting wars in the Middle East and why we are the only industrialized nation without a national healthcare system, why wages have stagnated for working americans, and why many of us are in so much debt.
The comments about home owners and working Americans is lip service. Ask yourself, who does this bailout stuff help? It helps the working class only in that we are stuck. Stuck trying to make ends meet in a system stacked against us. It surely helps the credit industry and huge finance corporations (think Golman-Sachs Paulson's old pals). McCain has been using the same jargon for political reasons, making them appear as populists. Partisan politics hears what it wants from its own side, and sadly buy this ridiculous rhetoric. But the the fact is that middle class people will be feeling the pain from this fall out for a long time to come.
Below are some quotes from an article about Obama from the NY Times, entitled Obamanomics.
The sub-title is " A Free-Market-Loving, Big-Spending, Fiscally-Conservative Wealth Redistributionist"
http://www.nytimes.com/2008/08/24/magazine/24Obamanomics-t.html?_r=1&oref=slogin&ref=magazine&pagewanted=print
Keeping it short, I think these two excerpts sum it up:
Compared with many other Democrats, Obama simply is more comfortable with the apparent successes of laissez-faire economics.
Sunstein, now on the faculty at Harvard, has a name for this approach: “I like to think of him as a ‘University of Chicago’ Democrat.”
...
He [Obama] paused for a few seconds and then said this:
“I think I can tell a pretty simple story. Ronald Reagan ushered in an era that reasserted the marketplace and freedom. He made people aware of the cost involved of government regulation or at least a command-and-control-style regulation regime. Bill Clinton to some extent continued that pattern, although he may have smoothed out the edges of it. And George Bush took Ronald Reagan’s insight and ran it over a cliff. And so I think the simple way of telling the story is that when Bill Clinton said the era of big government is over, he wasn’t arguing for an era of no government. So what we need to bring about is the end of the era of unresponsive and inefficient government and short-term thinking in government, so that the government is laying the groundwork, the framework, the foundation for the market to operate effectively and for every single individual to be able to be connected with that market and to succeed in that market. And it’s now a global marketplace."
The market will save us... Why didn't I think of that?! Put the liberal back in neoliberal!
This is not hope, but a hopeless situation unless we work towards addressing the roots of the problems.
"Today, I fully support the effort of Secretary Paulson and Federal Reserve Chairman Bernanke to work in a bipartisan spirit with Congress to find this kind of solution.
What we’re looking at right now is to provide the Treasury and the Federal Reserve with as broad authority as necessary to stabilize markets and maintain credit. We need a more institutional response to create a system that can manage some of the underlying problems with bad mortgages, help homeowners stay in their homes, protect the retirement and savings of working Americans."
He basically agrees with what the administration is doing to address the financial crisis. He agrees with Bush, Paulson, Bernanke, etc.. all Republicans. All people of the party that is supposed to be so different than the party that he represents. How strange. I don't know how it could be made clearer that they are all beholden to the same financial institutions, i.e. corporate america, i.e. the elite class, i.e. the capitalist class. This is a major problem and a major reason why Obama is not about real change. This is tied to a number of concerns including why we are fighting wars in the Middle East and why we are the only industrialized nation without a national healthcare system, why wages have stagnated for working americans, and why many of us are in so much debt.
The comments about home owners and working Americans is lip service. Ask yourself, who does this bailout stuff help? It helps the working class only in that we are stuck. Stuck trying to make ends meet in a system stacked against us. It surely helps the credit industry and huge finance corporations (think Golman-Sachs Paulson's old pals). McCain has been using the same jargon for political reasons, making them appear as populists. Partisan politics hears what it wants from its own side, and sadly buy this ridiculous rhetoric. But the the fact is that middle class people will be feeling the pain from this fall out for a long time to come.
Below are some quotes from an article about Obama from the NY Times, entitled Obamanomics.
The sub-title is " A Free-Market-Loving, Big-Spending, Fiscally-Conservative Wealth Redistributionist"
http://www.nytimes.com/2008/08/24/magazine/24Obamanomics-t.html?_r=1&oref=slogin&ref=magazine&pagewanted=print
Keeping it short, I think these two excerpts sum it up:
Compared with many other Democrats, Obama simply is more comfortable with the apparent successes of laissez-faire economics.
Sunstein, now on the faculty at Harvard, has a name for this approach: “I like to think of him as a ‘University of Chicago’ Democrat.”
...
He [Obama] paused for a few seconds and then said this:
“I think I can tell a pretty simple story. Ronald Reagan ushered in an era that reasserted the marketplace and freedom. He made people aware of the cost involved of government regulation or at least a command-and-control-style regulation regime. Bill Clinton to some extent continued that pattern, although he may have smoothed out the edges of it. And George Bush took Ronald Reagan’s insight and ran it over a cliff. And so I think the simple way of telling the story is that when Bill Clinton said the era of big government is over, he wasn’t arguing for an era of no government. So what we need to bring about is the end of the era of unresponsive and inefficient government and short-term thinking in government, so that the government is laying the groundwork, the framework, the foundation for the market to operate effectively and for every single individual to be able to be connected with that market and to succeed in that market. And it’s now a global marketplace."
The market will save us... Why didn't I think of that?! Put the liberal back in neoliberal!
This is not hope, but a hopeless situation unless we work towards addressing the roots of the problems.
Some questions?
So we can't afford a national health care system, but we can afford to bail out huge corporations, costs that will surely be over a trillion dollars? So, welfare mothers are burdening the system, not robber barons and war mongers? So, we pay too much in taxes because the government funds inefficient social programs? So we should privatize social programs like social security and education? So privatizing is more efficient and costs the taxpayers less money? So basically, we should believe everything that politicians, corporate leaders, talking heads, and the media tell us and ignore reality? So, we should not be outraged, right? Just checking.
The Universal Market online
I have officially started blogging! The title is taken from a chapter in Harry Braverman's famous book Labor and Monopoly Capital. Braverman was an amazing thinker and I am always reminded of this chapter as I watch history unfold. In that sense, I think it will be a fitting title for the type of discussions I plan to post. Maybe it sets the expectations too high.
I don't know how well I will keep up this blog, but I figured it was better than e-mailing thoughts, ideas, and political-economic tirades to friends and family. I hope that someone out there finds it of interest.
I don't know how well I will keep up this blog, but I figured it was better than e-mailing thoughts, ideas, and political-economic tirades to friends and family. I hope that someone out there finds it of interest.
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