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Almost every major advance of the US economy has been nurtured or facilitated at some point by the active involvement and encouragement of the national government. It's been a partnership - sometimes uneasy, sometimes close, but a partnership - between government and free enterprise, that has led the development of the US economy. This role of the national government was deliberately written into the Constitution, and touches directly on Constitutional issues that the left has ignored, but which the wrong-wing has long waged a smear campaign against. These issues go to the heart of the question: What is the role and purpose of government? They include such specific issues as the General Welfare clause, states rights, implied versus enumerated powers, and the reach and scope of the Commerce clause.
Contrary to the idealized wrong-wing myth of the U.S. economy being founded on the principles of laissez-faire, the framers of the Constitution deliberately set out to create a central government strong enough to force the thirteen states into one national economy. To do this, the national government undertook a number of programs and policies to build and strengthen the national economy by encouraging and protecting manufactures and commerce, establishing a national banking system, and promoting and directly assisting the development of transportation. Make the jump»
Cross posted from Real Economics.
Without issuing a single concrete demand, the Occupy movement has already scored a significant victory: it has shifted the political discourse in USA back in a more progressive direction, examining real problems. Less than two months ago, most Americans watched morosely as USA elites “debated” the debt ceiling and vied to come up with the most “acceptable” program of austerity, including cuts in Social Security and Medicare at the federal level, and education and police and fire protection at the state and local levels.
Now, the focus of political discourse are the inequalities of wealth and income, and how they cripple our economy and democracy by allowing the rich a disproportionate role in setting national policies.
That is a monumental shift in political direction. Especially considering the billions of dollars the rich and wealthy have poured into trying to dominate the political process and public perceptions, such as by astro-turfing the so-called Tea Party.
Many people have wondered just who is behind the Occupy movement. If you don’t know, the idea of occupying Wall Street was first proposed by the Canadian culture-jammers, Adbusters. I have known about Adbusters for a few years now, because of their excellent work on revealing the darker sides of economic neo-liberalism, and our consumerist culture. (One of the best articles attacking neo-liberalism was Adbusters’ November 2007 take-down of leading economist Gregory Mankiw, Economic Indoctrination.) Make the jump»
#OccupyWallStreet has issued an emergency appeal for support tonight, after New York City mayor (and billionaire) Michael Bloomberg directed NYPD to force the #OWS protesters out of the public space they have been camping in for over three weeks. Ostensibly, Mayor Billionberg wants the park area to be "cleaned," and so the protesters need to leave "temporarily."
The situation at the site of the #OWS camp is reportedly tense as police gather to begin their assault.
So, tonight, October 13, 2011, one more time, Mayor Billionberg and USA elites are showing us just how outrageously corrupt they have made America. A corporation giving unlimited contributions towards political campaigns: according to these elites, that is "free speech," and they even have a Supreme Court ruling, the notorious Citizens United v. FEC, that explicitly says so. Corporations have free speech rights, and no one can interfere, no matter how obviously corrupt our political system is made by the billions of dollars of corporate campaign contributions, and secret funding of attack ads.
But, American citizens camping in a public space to make an explicitly political message? Oh, no, no, NO, that is NOT free speech. Not in the United States of America, home of the free and land of the brave, on October 13, 2011.
I feel only shame and disgust for this sorry spectacle of cruelly twisted definitions of freedom. Corporations have rights. People don’t. And I feel loathing and contempt for the conservatives and economists and MBAs and rentiers and speculators and usurers, who have brought the republic to this nadir, with their evil, anti-human "free market" theology. Make the jump»
It has now been three days since riots began in North London after police shot and killed a man reported to be involved with a local drug gang. According to at least one source, the fact that the riots appear to be organized using the relatively secure Blackberry network is evidence that British drug gangs are leading the riots in reaction to recent, highly successful police efforts to terminate many drug gang operations. The reasoning is that unemployed teen punks would not be able to afford Blackberry's. So, it must be drug gang members. Supposedly, the British police are "allowing" the riots to continue (for three days now?!?) so they can get plenty of photos of gang members organizing riots on their Blackberries. Oh, and to sway the "civil liberty types" toward further expansion of an already oppressive police state in Britain:
Wall Street’s Euthanasia of Industry, by Michael Hudson: Obama is selling out his constituency to his campaign contributors: that's what politicians do. But even worse, the President is a fully committed acolyte of neo-liberal economics and "has bought into the idea that the only way to get recovery is to cut wages by about 30 percent." Make the jump»
Cross-posted from Real Economics.
During negotiations over the federal government's debt limit this past week, President Obama appears to have achieved a major tactical victory over the Republican ideologues. I use the term "tactical" because in my view, the fundamental economic problem confronting the country remains not only unsolved, but entirely unheeded: after a half century of "neo-liberal" economic reforms, a.k.a., conservative economic deregulation, the economy is now structurally skewed to benefit a new financial and corporatist oligarchy, at the expense of everyone else. What I have striven to do, in posts such asWealth and Income Inequalities are Markers of Oligarchy, is to force the concept of oligarchy back into the national discourse. I cannot claim this as my idea: Simon Johnson's May 2009 article The Quiet Coup was a notable effort at forcing us to face up to the unpleasant fact of a new American oligarchy, and Michael Hudson has been ferocious in a number of recent posts: How Financial Oligarchy Replaces Democracy. So it was gratifying to read Mike Konczal's A Response to Corey Robin on The Political Idea of Monetary Policy:
Corey Robin has a negative response to Matt Yglesias’ argument that setting an inflation target is one of the most important goals progressives and liberals should push for, which lead to an email exchange and a second response.
The economics of monetary policy are one topic. In a balance sheet recession, with a zero-lower bound, a broken financial system and the various commitment problems the Fed faces in these moments, monetary policy is not easy. We discuss many of these economic issues here in an interview with Joe Gagnon, and that’s a debate that has been going on for a while.
Robin notes that fiscal policy is important: “The government hiring people, in other words, is a lot cheaper—and more economically beneficial—than tax cuts or employer tax credits or the stimulus bill.” I agree completely, but let’s say we get a dream infrastructure deal through Congress. If that helps the economy, and the economy starts to pick up, Bernanke and a conservative Fed could use that as an excuse to raise interest rates sooner, which would immediately cancel out that stimulus. Regardless of fiscal policy, monetary policy is never neutral in a moving economy, and thus progressives need an answer.
But Robin, a political theorist (whose book on political fear is fantastic and one of the better arguments for strong unionization that I’ve seen), is more interested in the political theory and ideas surrounding the issue, which I agree needs to be discussed more. Robin:
What both of these reasons [for monetary policy] have in common is that instead of putting money into the hands of people who not only need it but would spend it, thereby stimulating demand and more jobs, they keep (or put more) money into the hands of people who already have it and don’t need to spend it in economically beneficial ways. Presumably because they are, in Yglesias’ eyes, the real movers and shakers of the economy, as opposed to the vast majority of middle- and working-class people or the government that represents them…Share and spread the wealth, in other words, among the wealthy….
If you wanted a purer distillation of the Reaganite temper of our times, you’d be hard pressed to find it in any other notion than this: get more money into the hands of people with money, for they are the truly productive agents in our society, rather than into the hands of the people who might actually spend more money if they had more money to spend….
Cross-posted from Real Economics. Posted on ePluribus Media at 2011-06-05 22:33:23 -0400. Bumped and promoted. - GH
At the beginning of the American experiment in self-government, concentrations of wealth and large inequalities in income and wealth were viewed suspiciously as dangerously subversive vestiges of the royalty and oligarchies of Europe. But today, conservatives would have us believe, concentrations of wealth and inequalities in income and wealth should be viewed as the natural result of a social Darwinian struggle between those who work hard, and those who do not. Thus are Americans slowly but steadily being led to acceptance of the rise of a new oligarchy,
In one of the most famous of the Federalist Papers, No. 10, James Madison discussed the problem of factions, and noted that they most often arise based on economic interests. In preparation for the Constitutional Convention, Madison made notes of the defects of the Articles of Confederation. Vices of the Political System of the United States These short notes amplify and clarify Madison’s thinking on the formation of a new government. Here is a section dealing with the problem of emerging oligarchies:
Long-time activist Gar Alperovitz has an interesting article in The Nation about the emerging structure of "The New-Economy Movement.," a mostly uncoordinated group of non-profits companies and foundations, and citizen co-operatives, that have explicitly rejected the central tenet of modern Anglo-American capitalism that the profit motive reigns supreme. These are new, and some old, "institutions whose priorities are broader than those that typically flow from the corporate emphasis on the bottom line."
Among groups mentioned are the The American Sustainable Business Council, an alliance of 150,000 business professionals and thirty business organizations, whose "members are “triple bottom line” companies and social enterprises committed to the environment and social outcomes as well as profits"; the Business Alliance for Local Living Economies (BALLE); and Mondragon, one of the largest and most successful cooperative enterprises in the world, based in the Basque region of Spain, with almost 100,000 workers.
Alperovitz notes that these types of organizations are signs of a growing realization that our current economic system is not sustainable. The financial and economic crisis of the past three years has forced more and more people to question the basic principles of Anglo-American capitalism and its over-weening emphasis on profit.
The 150th anniversary of the Fort Sumter bombardment that formally began the Civil War is tomorrow, and wrong-wingers throughout the South and the rest of America are fixing a big celebration. There’s going to be a seemingly infinite issuance of blogs, articles, radio interviews, and television appearances that will proffer a prettified picture of a brave and stolid South, courageously defending the “true conservative Constitutional” principles of states rights, individual responsibility, and limited government.
If you’re one of the many Americans who don’t really know that much about the Civil War, you have probably been perplexed by the number of wrong-wing Republican politicians who have made open statements of admiration the past year or two for the Confederate ideas of states rights and secession. This very lengthy diary is designed to fully inform you what the Confederacy was really like – a society suffering acutely from class differences; a society ruled by a slave holding oligarchy that was sickeningly arrogant and grasping, as well as racist. A number of myths about have been developed about the “Lost Cause” of the Confederacy for over a century, and those myths and lies are probably going to be repeated so often the coming days and weeks that you’re going to want to puke. My intent for this diary is to help shatter those myths and lies.
Cross posted from Real Economics.
I have generally been highly critical of the Obama administration and its economic policies. However, below I link to an unique and very informative DailyKos diary that examines the little-heralded efforts of the administration to improve the economic lot of average Americans by trying to support the manufacturing sector of the economy. Now, while I could easily argue that these efforts are "too little, too late," they do constitute evidence that there are some in the Obama administration who have not entirely fallen victim to the Leisure Class (Predatory Class) mentality described by Thorstein Veblen and our own Jon Larson. In this case, the writer identifies the individual: Ron Bloom, former official of the United Steel Workers Union, and currently special advisor to Tim Geithner and White House director of manufacturing policy.
Previously published on The People's View.
If you read the Wall Street Journal or right wing blogs, you know who Ron Bloom is. He is special advisor to Tim Geithner and White House director of manufacturing policy. He's a former official at the United Steel Workers Union who helped manage the auto rescue.
Mr. Bloom attended Harvard Business School, where he gravitated to populist business cases and was keenly interested in employee buyouts. After 10 years at investment banks, among them Lazard, he became special assistant to the USW president in 1996.
Both inside and outside the USW, Mr. Bloom is known as a financially savvy negotiator — with a tendency to spout profanities WSJ
Right wing blogs are more straightforward
Is there really any doubt that Obama and his administration are a pack of radical Leftists?
Look for Bloom on Youtube and you'll see - they really really hate him. Here's what got our right wing compatriot's underwear in a twist. Speaking as a union official at " 6th Annual Distressed Investing Forum" Bloom said:
Generally speaking, we get the joke. We know that the free market is nonsense. We know that the whole point is to game the system, to beat the market or at least find someone who will pay you a lot of money, 'cause they're convinced that there is a free lunch.
We know this is largely about power, that it's an adults only no limit game. We kind of agree with Mao that political power comes largely from the barrel of a gun. And we get it that if you want a friend you should get a dog.
Absolutely nothing that Bloom said is even controversial on Wall Street, but according to American Right Wing Propagandists, working people are supposed to naively believe in the stories told to them by the economists. Read more.
The author also performs the excellent service of criticizing Robert Reich, and liberals and progressives in general, for ignoring and even disliking the manufacturing sector. As the author notes, back in June 2009, Reich opined on the auto bailout by diving fully into the cesspool of a "post-industrial policy": Make the jump»
In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.
Speaking to an audience at St Paul's Cathedral in London about morality in the marketplace last night, Griffiths said the British public should "tolerate the inequality as a way to achieve greater prosperity for all"Make the jump»
A big tip o' the hat to disrael on DailyKos, who caught the latest from economist Thomas Palley, America’s Exhausted Paradigm: Macroeconomic Causes of the Financial Crisis and Great Recession.
Palley's introduction sets the hook quite well:
Most commentary has therefore focused on market failure in the housing and credit markets. But what if the house price bubble developed because the economy needed a bubble to ensure continued growth? In that case the real cause of the crisis would be the economy’s underlying macroeconomic structure. A focus on the housing and credit markets would miss that.
Cross-posted from The Economic Populist
A big tip'o the hat to okanogen at CorrenteWire for picking up this one: Death by Math.
Taunter analyzes the statement by Assurant CEO Don Hamm’s that "Rescission is rare." Rescission is when a health insurer cancels a policy, usually because the insured "lied" on the original application, usually by failing to disclose a previous condition. If you haven't heard the horror stories of people who required costly medical care only to be dropped by their health insurer, you haven't been paying attention to the world around you. In fact, the insurers have computer programs that screen their policy holders for a list of diseases and illnesses in order to drop those policy holders. Here is what Hamm told Congress in his prepared remarks to the Hearing of the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee on June 16 this year:,P. Make the jump»
LQD = Lazy Quote Diary
Matt Taibbi has been wading through the objections to his Rolling Stone article a few weeks ago detailing how Goldman Sachs has profited obscenely by using its political influence to help create, then prick, a series of financial bubbles over the past century. Taibbi's reply is very much worth reading, to see the depths to which defenders of the financial status quo will stoop, such as hurling the "anti-semitic" charge. But, here is the conclusion, which I consider the best part: Make the jump»
Suggestions to solve the financial crises by basically shutting down most of Wall Street are always shouted down by howls of “How are companies going to raise money?” or “How are people going to invest in companies?”
Well, take a good, long look at this graph, which shows the percentage of capital expenditures by U.S. non-financial companies that was raised in U.S. financial markets from 1952 to 2006. Make the jump»