Bare knuckle economics

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  • Posted on: 29 May 2011
  • By: Tony Wikrent

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.

Bare knuckle economics

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":

We should stop pining after the days when millions of Americans stood along assembly lines and continuously bolted, fit, soldered or clamped what went by. Those days are over.

I remember reading Reich's article at the time and just becoming increasingly furious. Now, I really like and admire Reich, but his position on manufacturing is not just entirely erroneous but actively harmful to the prosperity of this country and the rest of the world. It is extremely troubling that trained economists can believe such nonsense as a "post-industrial society"; it demonstrates how far removed they are from the actual economic processes, we depend on everyday to sustain and support human life. Take the task of procuring clean water supplies: we need pipes, valves, pumps, gaskets, filters, motors, faucets, etc, etc., and the materials that go into them: steel, copper, aluminum, rubber, plastics, etc. If the entire world went post-industrial and stopped producing this stuff, what do you think would be the chances of finding clean, safe water to drink in about 2 or 3 years?

Clearly, the hypothetical example is absurd, but it is useful to illustrate that the idea of a post-industrial society is even more absurd.

But many progressives and liberals defend Reich by arguing that the loss of manufacturing jobs is driven largely by higher manufacturing productivity. It is an argument Reich himself makes in the his article. But this higher productivity argument is a smokescreen for hiding the fact that over half the world's population still does not have access to clean drinking water, sanitary waste disposal, proper medical care, and other goods and services we westerners take for granted. Have you never seen those pictures of people lined up at a water source with a strange variety of plastic and steel containers to collect water and trudge home with it? Try sitting down and figuring out what the bill of goods is for a water and sanitation system for a town of 10,000, including all the piping and faucets in each residence. Take, for example, the tons of steel required, divide it by 10,000 for a per capita figure. Then multiply it by 3.5 billion. There is not enough steel production capacity in the entire world to do what is actually required.

And we haven't even addressed the problems of transforming all the economies of the world to deal with peak oil and global climate change. What do you think is going to be required just in the U.S. to entirely replace the retail gasoline distribution system? Or if you shut down every nuclear power plant and fossil-fueled power plant in the world, do you really propose that most people just do without electricity for hours or even days? What is required to replace all those power plants with wind turbines and solar cells and other forms of more environmentally benign forms of energy generation?

From a diary of mine in May 2008, Can the U.S. achieve 20% wind energy by 2030?:

In 2007, there were 3,188 new wind turbines installed in the United States, for an additional 5,244 MW capacity. These required 9,564 rotor blades; 17,425 miles of steel rebar, between two and three percent of total U.S. steel production, and 805,000 cubic yards of concrete. The total weight of a wind turbine is 230 to 340 tons. 89.1 percent of that is steel. 5.8% is glass-reinforced plastic (almost all for the rotor blades); 1.6% is copper, 1.3% concrete, and 1.1% is adhesives. The remaining 0.4% is aluminum and various other materials. These ratios are expected to shift slightly as designs are refined and new materials, such as advanced permanent magnets, are introduced.

So, the entire "higher productivity" argument is a nothing but a propagandistic rationalization to protect the predatory bastards who do not want to reorganize the world's financial and monetary systems to actually fund what the world's people actually need to be built if we are to survive as a species.


"If the entire world went post-industrial and stopped producing this stuff..."

Just imagine when everyone gets to be a knowledge worker, of the Information Age. We all be know-it-alls and dead cause no one is making hard goods anymore, everyone's in finance!
Great piece, still thinking about it...

"I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country." - Thomas Jefferson