Sunday, July 24, 2016

The Historical Context of Mercantilism, Republicanism, Liberalism and Neoliberalism


After the financial crash of 2007-2008 caused an economic collapse, and after it became clear that the Bush and Obama administrations were unwilling to actually investigate, prosecute and incarcerate financial and banking executives for the crimes committed, many politically active people in USA and other countries began to dig deep into the philosophy of political economy that had allowed the financial industry to occupy such an overwhelming position of dominance over the rest of the economy.

The philosophical wreckage they have been excavating has generally come to be called "neoliberalism." It is a word which confuses many people, because it serves as a name for a set of economic beliefs and policies which are more easily recognized as being associated with political conservatism and libertarianism: the opening of the Wikipedia entry on "neoliberalism" is accurate enough on these economic beliefs and policies, which "include extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy." Generally, neoliberals believe that markets with untrammeled pricing mechanisms are a much fairer and more efficient means of allocating society's resources than any level of government oversight and intervention.

Neoliberals themselves actively seek to add to the confusion by denying they have a shared, coherent philosophy. A good, recent example—and from someone who is a self-professed "liberal" not a conservative—was this comment on DailyKos this past week: “Neoliberalism is not actually a thing.” It is exactly what neo-liberals themselves say. It is a smokescreen, intended to confuse and stymie inquiry. Philip Mirowski, a historian of economic thought at Notre Dame, and co-editor of one of the best expositions of neo-liberalism (The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective, Harvard University Press, 2009; now available in paperback), took on this deception earlier this year in a paper entitled, The Political Movement that Dared not Speak its own Name.

Mirowski’s response to the severe reaction of neoliberals to his paper was posted to Naked Capitalism in April 2016: Philip Mirowski: This is Water, or Is It the Neoliberal Thought Collective?
I do not recommend anyone go read the above links right now, unless you are already familiar with the debate over neoliberalism and are prepared for some hefty intellectual lifting. For those people unfamiliar with the term “neoliberalism” and seeking to understand how it differs from liberalism, I recommend this excellent review of another book, including many of the comments in the thread, on
Naked Capitalism in March 2015: Comments on David Harvey’s “A Brief History of Neoliberalism”.

These are all excellent discussions and expositions of neoliberalism. Also excellent is the work of Corey Robin. See, for example, When Neoliberalism Was Young: A Lookback on Clintonism before Clinton, from April 2016, and Robin's response to critics. Robin puts his finger on a diseased main artery in our political discourse today, when he writes neoliberals, even those, such as Barack Obama and the Clintons, who refuse to call themselves neoliberals,
would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.”

My own conclusion thus far is that much confusion will persist until neoliberalism is understood in the historical context of USA political economy, along with three other terms crucial to understanding this history:

Mercantilism

Republicanism

and

Liberalism.

My firm conviction is that people cannot, and do not, understand what an insidious, and potent, danger neoliberalism thought is, until they understand republicanism. And in political economy, you also need to understand mercantilism, and how the USA theory and practice of republicanism interacted with, and changed, mercantilism. As for liberalism, for now suffice it to note that contemporary neoliberal  thought has more to do with economic liberalism, than it does political liberalism. In fact, to some extent—and at the risk of my only adding further to the confusion—it may be useful to assert here that there is a strain of European political liberalism that developed in opposition to the USA theory and practice of republicanism. This strain of European political liberalism resulted in granting the right to vote to most subjects of polities which remained monarchies, as an expedient for the necessity imposed by modern warfare for mass mobilization of a country's male population. The obvious period is that of World War One. In USA, at similar type of political liberalism arose in response to the acquisition and consolidation of monopolistic economic power by the trusts led by John D. Rockefeller, the Morgan banking interests, and other misnamed, so called "captains of industry" of the Gilded Age.

In my Introduction to my annotated abridgement of The Power to Govern: The Constitution -- Then and Now, by Douglass Adair and Walton H. Hamilton (W.W. Norton & Co., New York, NY, 1937, available on Amazon as a Kindle ebook, here), I write that the creation the American republic and its Constitution must be understood in the
context of the shift from the economic and political systems of feudalism, to mercantilism and modern nationalism. The ecclesiastical and warlord authoritarianism of feudal Europe was being reluctantly and painfully dragged off the stage of world history, making way for national states. In the process, these national states developed—without, Hamilton and Adair note, much theoretical foundation—an accretion of laws and policies generally called mercantilism, intended to ensure economic activity added to, rather than detracted from, a nation’s wealth and power. Hamilton and Adair present the evidence that the Framers were entirely familiar with mercantilist policies, and that the intent behind the Constitution was most emphatically not laissez faire and unregulated market capitalism, but a careful and deliberate plan to ensure that all economic activity was channeled and directed to the promotion of the general welfare and national development….
The words “mercantilist” and “mercantilism” are generally used whenever government powers are used to promote a state’s economic powers. By specifying in the Constitution that government powers are used to promote a state’s economic powers in promotion of the general welfare, the American republic made a sharp break from European mercantilism, in which the welfare of a sole monarch or small group of oligarchs was often conflated with the general welfare of a state or nation….
As a body of economic thought, liberalism developed as the economic and political philosophy of a revolt by a rising middle class against the power and privileges of European ruling oligarchs and monarchs, who used their connections and influence at royal courts to gain economic monopolies and other privileges (in other words, the system of mercantilism.) The intent of classical economic liberalism was to sweep away, or at least greatly circumscribe, the power of these oligarchical and monarchical elites and states to make room for greater economic freedoms and property rights for the rising middle class.

In this sense, the culmination of liberalism was the creation of the American republic,  However—let me stress again—it is crucial to note that under the Constitution of the new American republic, economic freedoms and property rights were subject to the Constitutional mandate to promote the general welfare.

In advanced industrial economies, the way a sovereign nation-state promotes and protects the general welfare is by imposing environmental, workplace, and consumer regulations on economic activity.
This is where we should discuss the concept of republicanism. Remember, the United States is established as a republic, not as a democracy. But what does that mean?

In a monumental book that is crucial to understanding the historical and cultural context we are here examining, The Creation of the American Republic, 1776-1787 (Chapel Hill: University of North Carolina Press, 1969), Gordon Wood wrote, "Republicanism meant more for Americans than simply the elimination of a king and the institution of an elective system. It added a moral dimension, a utopian depth, to the political separation from England - a depth that involved the very character of their society."

Wood continues:
To eighteenth-century American and European radicals alike, living in a world of monarchies, it seemed only too obvious that the great deficiency of existing governments was precisely their sacrificing of the public good to the private greed of small ruling groups.... The sacrifice of individual interests to the greater good of the whole formed the essence of republicanism and comprehended for Americans the idealistic goal of their Revolution.... "The word republic," said Thomas Paine, "means the public good, or the good of the whole, in contradistinction to the despotic form, which makes the good of the sovereign, or of one man, the only object of the government." 

(The first two thirds of "Republicanism," Chapter II from Gordon Wood's The Creation of the American Republic, has been posted online here. I highly recommend it as a very productive and uplifting Sunday read. Also, here is the Wiki-summary of the entire book.)

In the closing decades of the 1700s, there was general agreement that for republicanism to work as a system of government, the citizens of the republic needed to be virtuous. There were two types of virtue: private virtue and public virtue. Political theorists of the time insisted that the two were intertwined, but for sake of brevity, we need only look at public virtue, which simply meant that an individual citizen was willing to suppress his or her own self-interest when the greater good of society required it.

What this meant in practice was that individuals must submit to the authority of the state out of the self-abnegation which flowed from understanding—and desiring—that the consideration the general welfare must rule supreme. This required that the citizens develop an entirely different character than subjects in a monarchy, in which obedience to the state flowed from the awe and fear of the immense, regal power of the monarch and his supporting military apparatus. As Wood explains, loyalists warned that  
by resting the whole structure of government on the unmitigated willingness of the people to obey, the Americans were making a truly revolutionary transformation in the structure of authority. In shrill and despairing pamphlets [the Tories] insisted that the [Revolutionaries] ideas were undermining the very principle of order. If respect and obedience to the established governments were refused and if republicanism were adopted, then... "the bands of society would be dissolved, the harmony of the world confounded, and the order of nature subverted." [The tories insisted that ]The principles of the Revolutionaries  were directed "clearly and literally against authority." They were destroying "not only all authority over us as it now exists, but any and all that it is possible to constitute." The Tory logic was indeed frightening. Not only was the rebellion rupturing the people's habitual obedience to the constituted government, but by the establishment of republicanism the [Revolutionaries] were also founding their new governments solely on the people's voluntary acquiescence. And, as Blackstone had pointed out, "obedience is an empty name, if every individual has a right to decide how far he himself shall obey." [Which of course, becomes the issue in the Civil War eight decades later.—AKW]
Wood points out that the Revolutionaries did not actually desire to do away with governmental and social authority, only to supplant what motivated obedience to them by changing the very character of the people, so that the motivating force came from within each citizen, instead of from outside.
The Revolution was designed to change the flow of authority-indeed the structure of politics as the colonists had known it - but it was in no way intended to do away with the principle of authority itself. "There must be," said John Adams in 1776, "a Decency, and Respect, and Veneration introduced for Persons in Authority, of every Rank, or We are undone."  

....In a monarchy each man's desire to do what was right in his own eyes could be restrained by fear or force. In a republic, however, each man must somehow be persuaded to submerge his personal wants into the greater good of the whole. This willingness of the individual to sacrifice his private interests for the good of the community - such patriotism or love of country - the eighteenth century termed "public virtue." A republic was such a delicate polity precisely because it demanded an extraordinary moral character in the people. Every state in which the people participated needed a degree of virtue; but a republic which rested solely on the people absolutely required it... The eighteenth-century mind was thoroughly convinced that a popularly based government "cannot be supported without Virtue." Only with a public-spirited, self-sacrificing people could the authority of a popularly elected ruler be obeyed, but "more by the virtue of the people, than by the terror of his power." Because virtue was truly the lifeblood of the republic, the thoughts and hopes surrounding this concept of public spirit gave the Revolution its socially radical character - an expected alteration in the very behavior of the people, "laying the foundation in a constitution, not without or over, but within the subjects."
Wood and other historians have written that the adoption of the Constitution came about because many Americans—most especially the leaders of the Revolution—were increasingly horrified at the spectacle of self-interest dominating the work of all the state legislatures. The republican public virtue which had called forth the sacrifices of the Revolutionary War, appeared to be ebbing, and there was a serious debate over whether Americans remained virtuous enough for self-government to survive. (See Wood, The Creation of the American Republic, Chapter Ten, “Vices of the System.”) Note that this perceived diminution of virtue focused not only on the personal corruption of individual state legislators, but also on how the various state legislatures consistently and repeatedly placed state and regional interests ahead of the national interest.

The most pronounced social effect of the Revolution was not harmony or stability but the sudden appearance of new men everywhere in politics and business. "When the pot boils, the scum will rise:' James Otis had warned in 1776; but few Revolutionary leaders had realized just how much it would rise....

Everywhere "Specious, interested designing men:' "men, respectable neither for their property, their virtue, nor their abilities:' were taking a lead in public affairs that they had never quite had before, courting "the suffrages of the people by tantalizing them with improper indulgences." Thousands of the most respectable people "who obtained their possessions by the hard industry, continued sobriety and economy of themselves or their virtuous ancestors" were now witnessing, so the writings of nearly all the states proclaimed over and over, many men "whose fathers they would have disdained to have sat with the dogs of their flocks, raised to immense wealth, or at least to carry the appearance of a haughty, supercilious and luxurious spendthrift." "Effrontery and arrogance, even in our virtuous and enlightened days:' said John Jay "are giving rank and Importance to men whom Wisdom would have left in obscurity."....

The republican emphasis on talent and merit in  place of connections and favor now seemed perverted, becoming identified simply with the ability to garner votes....

The self-sacrifice and patriotism of 1774-75 [had] seemed to give way to greed and  profiteering at the expense of the public good. Perhaps, it was suggested, that peculiar-expression of virtue in those few years before Independence had been simply the consequence of a momentary period of danger. At one time public spirit had been "the governing principle and distinguishing characteristic of brave Americans. But where was it now? Directly the reverse. We daily see the busy multitude.engaged in. accumulating what thy fondly call riches, by forestalling [buy up goods in order to profit to achieve a monopoly position and impose an artificially high price], extortioning and imposing upon each other... Everywhere "Private Interest seemed to predominate over every Consideration that regarded the public weal.
The leaders who later became known as Federalists assembled in the Constitutional Convention, and cobbled together a framework of government of checks and balances intended to safeguard the republic against both the machinations of a tyrant, and the passions of the masses. I think the left is making a huge, tragic mistake by focusing an the founders’ fear of democracy, and condemning the founders as mere elitists. I would point to Trump and the Republican Convention as an example of exactly why the Founders sought to curb the power of both a tyrant, and the people. I agree with Ian Welsh that Trump just might get elected, because Hillary and Democratic establishment behind her refuse to acknowledge the economic devastation caused by their neoliberalism over the past four decades. So, if Trump gets elected, it is going to be the Founders' framework of checks and balances we are going to desperately seize hold of to try and prevent Trump from going to the very end that his supporters want him to go to. Will lefties come to appreciate the Founders' concerns then? A few will, but I think most will not.

But, back to American history. So, we get the republic, and it is generally understood that for republican self-government to work, the people with public virtue must lead the government. This is why George Washington was elected President unanimously twice by the electoral college. Note that by the time of Washington’s second election to President, in 1792, the political fight between the Federalists, led by Hamilton, and the anti-Federalists (soon to be called Republicans), led by Jefferson and Madison, had broken into the open, but both factions supported Washington for President, because only he was perceived to be virtuous beyond question. (In his second term, Jefferson and Madison led a campaign of vitriol and lies against Washington that is truly astonishing, accusing Washington of being a mere dupe of Hamilton, and surrounding himself in regal splendor intended to prepare Americans’ sentiments for an abandonment of republicanism and its replacement by a monarchy. And this, while Jefferson continued to serve as Vice-President.)

So what happens is the very idea of public virtue comes under attack. As Wood writes:
In these repeated attacks on deference and the capacity of a conspicuous few to speak for the whole society-which was to become in time the distinguishing feature of American democratic politics - the Antifederalists struck at the roots of the traditional conception of political society. If the natural elite, whether its distinctions were ascribed or acquired, was not in any organic way connected to the "feelings, circumstances, and interests" of the people and was incapable of feeling "sympathetically the wants of the people," then it followed that only ordinary men, men not distinguished by the characteristics of aristocratic wealth and taste, men "in middling circumstances" untempted by the attractions of a cosmopolitan world and thus "more temperate, of better morals, and less ambitious, than the great," could be trusted to speak for the great body of the people, for those who were coming more and more to be referred to as "the middling and lower classes of people." The differentiating influence of the environment was such that men in various ranks and classes now seemed to be broken apart from one another, separated by their peculiar circumstances into distinct, unconnected, and often incompatible interests. With their indictment of aristocracy the Antifederalists were saying, whether they realized it or not, that the people of America even in their several states were not homogeneous entities each with a basic similarity of interest for which an empathic elite could speak. Society was not an organic hierarchy composed of ranks and degrees indissolubly linked one to another; rather it was a heterogeneous mixture of "many different classes or orders of people, Merchants, Farmers, Planter Mechanics and Gentry or wealthy Men. "In such a society men from one class or group, however educated and respectable they may have been, could never be acquainted with the "Situation and Wants" of those of another class or group. Lawyers and planters could never be "adequate judges of tradesmens concerns." If men were truly to represent the people in government, it was not enough for them to be for the people; they had to be actually of the people. "Farmers, traders and mechanics . . . all ought to have a competent number of their best informed members in the legislature " 
The anti-Federalist basically argue that no individual can ever set aside their own self-interests to achieve the level of public virtue (disinterest is a key word to look for if you read accounts of this period) required to govern the republic. Well, if the leaders of government are just as selfish and self-interested  as you and I, we are therefore just as capable of governing as they are, and all this talk about the leaders being virtuous is a deception.

But note what happens here: this rejection of republican civic virtue opens the door to the ideas of British East India Company apologist Adam Smith, that “the market” is a more fair arbiter of clashing interests than the government can ever be. (Let me note here that Hamilton explicitly repudiated and rejected Smith’s ideas.)

So, in this historical context, neoliberalism is a revolt against the very heart of the republican philosophy of the American republic. Neoliberalism is a philosophical insistence that public virtue is a dangerous encumbrance on the "animal spirits" of modern capitalism—never mind that nowhere in the USA Constitution is "capitalism" mentioned, or any particular economic structure mandated. (Back in 1982, the American Enterprise Institute had a forum and published a book How Capitalistic is the Constitution? All the contributors except one never really addressed the question, instead regurgitating the usual hosannas to British imperial apologists Adam Smith and John Locke. The one exception was historian Forrest McDonald, who wrote an excellent biography of Alexander Hamilton—excellent because McDonald understands the important stuff about political economy and not the neoliberal crap—wrote one of the papers in the book, and his answer, in short, is “not very.” As in, the Constitution does not create a capitalist economy at all. Now, I suspect McDonald pulled his punches, because he did not want to too greatly upset his AEI hosts. McDonald's paper is probably the only completely truthful thing AEI has ever published.)


In fact, the leading philosophers of neoliberalsim are explicit in their attack on the Constitutional mandate to promote the general welfare, arguing it is “the slippery slope to the tyranny of the nanny state.” As Friedrich von Hayek titled his 1944 paean to neo-liberalism, the republican insistence of promoting the general welfare is The Road to Serfdom. Philip Pilkington, in The Origins of Neoliberalism, Part I – Hayek’s Delusion (January 2013) makes the astute observation
Hayek thought that all totalitarianisms had their origins in forms of economic planning. Economic planning was the cause of totalitarianism for Hayek, rather than the being just a feature of it. Underneath it all this was a rather crude argument. One may as well make the observation that totalitarianism was often accompanied by arms build-up, therefore arms build-ups “cause” totalitarianism.
Pilkington then really lowers the boom by excerpting Mark Ames, from The Exiled, January 2011, in  All Pain, No Gain: A Brief History of “Austerity Program” Massacres & Disasters on how the economic ideas of von Mises and von Hayek led to economic calamity in Germany in the 1920s, and the consequent rise of nazism:
Von Hayek and his fellow Austrian aristocrats who were forced to flee from the fruits of their economic programs, did a complete revision of history and retold that same story as if the very opposite of reality had happened. Once they were safely in England and America, sponsored and funded by oligarch grants, hacks like von Mises and von Hayek started pushing a revisionist history of the collapse of Weimar Germany blaming not their austerity measures, but rather big-spending liberals who were allegedly in charge of Germany’s last government. Somehow, von Hayek looked at Chancellor Bruning’s policies of massive budget cuts combined with pegging the currency to the gold standard, the policies that led to Weimar Germany’s collapse, policies that became the cornerstone of Hayek’s cult—and decided that Bruning hadn’t existed.

In USA, neoliberals who openly self-identify as political conservatives or libertarians don't even have sense enough to try to hide their hideous historical holocausts, like von Hayek and von Mises try to. I have already discussed the importance and significance of the mandate to promote the General Welfare in the USA Constitution. The Confederacy (yes, that Confederacy, of the mid-1800s, dominated by an oligarchy of rich slaveholders who decided to tear apart the Union in a fratricidal war rather than do a single thing that might lead to eventual elimination of slavery) largely copied the USA Constitution, but, crucially, eliminated mention of the General Welfare from its Constitution. The libertarian von Mises Institute has a June 1992 article on its website by Randall G. Holcombe which explicitly states this was an important “improvement”:
But the differences in the documents, small as they are, are extremely important. The people who wrote the Southern Constitution had lived under the federal one. They knew its strengths, which they tried to copy, and its weaknesses, which they tried to eliminate. One grave weakness in the U.S. Constitution is the "general welfare" clause, which the Confederate Constitution eliminated….
The Southern drafters thought the general welfare clause was an open door for any type of government intervention. They were, of course, right.
Immediately following that clause in the Confederate Constitution is a clause that has no parallel in the U.S. Constitution. It affirms strong support for free trade and opposition to protectionism: "but no bounties shall be granted from the Treasury; nor shall any duties or taxes on importation from foreign nations be laid to promote or foster any branch of industry." ….The Confederate Constitution prevents Congress from appropriating money "for any internal improvement intended to facilitate commerce" except for improvement to facilitate waterway navigation. But "in all such cases, such duties shall be laid on the navigation facilitated thereby, as may be necessary to pay for the costs and expenses thereof..."
According to Wikipedia, Holcombe “is a Research Fellow at The Independent Institute, a Senior Fellow and member of the Research Advisory Council at The James Madison Institute, and past president of the Public Choice Society. From 2000 to 2006 he served on Governor Jeb Bush's Council of Economic Advisors.” (Emphasis mine.)

So much for the conservative and libertarian brands of neoliberals. What about those neoliberals who self-identify on today's accepted political spectrum as liberals or even progressives, such as Barack Obama and the Clintons? In The Origins of Neoliberalism, Part II – The Americanisation of Hayek’s Delusion, Pilkington details how the ideas of neoliberalism came to completely dominate the economics profession and academia. (Also see the July 2009 Adbusters—the people who conceived of Occupy Wall Street—attack on the leading economics textbook, authored by Harvard economist and head of George W. Bush Jr.'s Council of Economic Advisors, H. Gregory Mankiw.) The result is that very, very few people have been exposed to, let alone learned, any alternative to the economic nostrums of neoliberalis. It is not that Obama and the Clintons have a malignant intent to impose economic ruin on their country and fellow countrymen, it's just that they are profoundly ignorant in matters of political economy—and, I would venture to guess, the history of republicanism. As William Neal explains, it is this socially pervasive indoctrination in neoliberalism that prevents "almost the entire Democratic Party short of Senator Sanders and a few members of the Progressive Caucus" from pushing for such things as a government direct jobs program. They simply accept the "common wisdom"
that “only the private sector can create jobs.” In order to believe this fiction, one does indeed have to bury the history of the New Deal, which is the still barely breathing historical legacy which refutes it (along with the domestic production record during World War II), the Civilian Conservation Corps and the WPA’s public work projects now nearly erased from citizen memory.
The problem neoliberalism confronts us with is the means by which a people decide and carry into practice their preferred vision for their economic destiny as a nation. If the neoliberals are correct, then there is no room for visionaries of a better future for everyone, because the purest collective expression of the wills of all individual are the sum of transactions in the economic markets. At the time of the Revolution and the writing of the Constitution, this was known as Bernard Mandelville's "private vices lead to public virtue," which became Adam Smith's "invisible hand." And every book I've read about these matters noted that Americans at the time repeatedly and emphatically rejected Mandelville's idea.

In a sense, the past half-century of theoretical and policy dominance by neoliberalism has been a colossal social experiment in replacing the public virtue of republicanism, with the economic liberalism of a market economy. By any measure I care about, the experiment has been a disastrous failure. A solid majority of citizens have repeatedly told pollsters they desire an end to a dependence on fossil fuels, and a solution to the problem of climate change, but no effective responses have been delivered from a political system held in thrall to neoliberal ideas. The very idea of government intervention into the economy to achieve such goals is held by the neoliberal ideologues to be a mis-allocation of resources and an encroachment by government on the "liberties of the people" But if the citizens cannot use their government—the government that supposedly derives its powers from their consent, and which therefore professes its sovereignty to reside in the people—to impose their will on "the market," then what instrument do they have to decide their own destiny?

Neoliberalism is the new justification for the newly arisen class of corporatist oligarchs and plutocrats who are enraged that the promotion of the general welfare by modern sovereign nation-states involves laws and regulations which “stifle” their “business opportunities” and “economic creativity.”


Friday, July 22, 2016

Karl Polanyi and the Coming U.S. Election

I first noticed Bill Neal's writing many, many years ago. He always has some startling insights or turns of phrases that make his articles a welcome respite from the torrent of half-baked hash that now passes for news reporting and commentary. Neal's article is especially important now, because since Hillary Clinton has clinched the Democratic nomination, there has been what appears to me to be a concerted effort to drown out any discussion of neo-liberalism. Neal is especially good at identifying and highlighting the social and cultural implications of neo-liberalism.

Karl Polanyi and the Coming U.S. Election


by William R. Neal

It’s hard not to notice, during the American Presidential election drama, that despite all the debates and speeches, and multiple candidates, the terms “Neoliberalism” and “austerity” have yet to be employed, much less explained, these being the two necessary words to describe the dominant economic “regime” of the past 35 years. And this despite the fact that most observers recognize that a “populist revolt” driven by economic unhappiness is underway via the campaigns of Donald Trump and Bernie Sanders. With Trump, of course, we are getting much more, the uglier side of American populism: racism, xenophobia and misogyny, at least; the culture wars at a higher pitch.

Yet when Trump commented on the violence which canceled his Chicago rally on the evening of March 11th, he stated that the underlying driver of his supporters’ anger is economic distress, not the ugly cultural prejudices. The diagnoses for the root cause of this anger thus lie at the heart of the proposed solutions. For students of the Great Depression, this will sound very familiar. That is because, despite many diversions and sub-currents, we are really arguing about a renewed New Deal versus an ever more purified laissez-faire, the nineteenth century term for keeping government out of markets – once those markets had been constructed. “Interventions,” however, as we will see, are still required, because no one, left or right, can live with the brutalities of the workings of “free markets” except as they exist in the fantasyland of the American Right.

Americans have never been known to be systematic thinkers about policy matters, least of all in an election year, but still, it is a remarkable thing not to be able to name in public forums the ideas which have ruled the economics profession for decades now and therefore the policy options of elected officials who turn to economists for guidance. Barry Goldwater, renowned, if not done in, for his candor, had no difficulty naming the system he opposed in his acceptance speech in San Francisco, 1964, or in his ghostwritten book, the Conscience of a Conservative: it was liberalism in all its forms, but especially its interventions into private markets - Keynesianism. For Goldwater, that included federal Civil Rights legislation and even Social Security.

Therefore, some clarification is called for when deploying these two terms, or the Market Fundamentalism/Market Utopianism others have chosen, myself included, to more polemically describe the dominant economic orthodoxy of our time.

By Neoliberalism it is meant the revival of “classical economics” which first arose in the late 18th and early 19th centuries in England, with the founders’ famous names living on into our own time: Smith, Ricardo, Townsend, Malthus, Mill and Bentham and a few others. Early economic writers tended to reach into the world of biology, of Nature, for their metaphors and analogies, and these excursions had two main tendencies: to cite nature’s cooperative features, or alternatively, its tooth and claw brutalities, which was Malthus’ grim legacy, one which we have not fully shaken to this day. Continuing this tradition, classical economics later flirted seriously with Social Darwinism (see the influence of William Graham Sumner in the U.S. and Herbert Spencer in England), almost becoming engaged to it, and then underwent the “micro” revolution of marginal costs in the late 19th century as the profession strained for its “scientific” laurels.

David Harvey, the prolific, polymath Marxist writer, links the term Neoliberal to the later Victorian economists – Alfred Marshall, William Jevons and Leon Walras - who succeeded their earlier classical colleagues from the first decades of the 19th century. But the realities of the past 30 years in America leads one back to the primal cruelties described by Karl Polanyi in those early industrial days, in his masterpiece The Great Transformation, and the religious intensity of the first classicals, not the later Victorian ones, those who worked in an era when life for workers was supposed to have gotten much better, although the London of those better days still horrified savvy American observers like Jane Addams of the Settlement House movement.

Neoliberalism was later greatly influenced by the conservative work - the defense of markets against governmental interventions - of Friedrich von Hayek and Ludwig von Mises (The preference here is to keep the “von” in the names: it makes them sound more sinister…) in the 1920’s and 1930’s, and Milton Friedman in the 1970’s, thinking which eventually eclipsed the Keynesian “revolution” of the 1930’s, and its demand-labor focused “macro” policies and accompanying federal fiscal interventions. Friedman’s great debates with John Kenneth Galbraith in the 1970’s usefully date the decline of Keynesianism for the general public, and the rise of “supply-side” economics: keeping entrepreneurs happy (and hopefully, inventive) through tax breaks without end. Many of us recall the linking of justice in-the-law with justice in-the- economy, courtesy of the old Smith Barney television advertisements from the 1980’s, starring John Houseman from the movie The Paper Chase: these noble stock brokers “make money the old fashioned way, they earn it.” Decided British accent too, he had.

Monday, July 18, 2016

Talk about soft power!


One of the frustrations of looking at climate change from the perspective of the installed infrastructure, is realizing that compared to the problems of actually constructing the solar-powered society, figuring out how to pay for it is reduced to a few important monetary experts deciding which existing buttons to push.  All they must do is change their minds.

Today we look at a report by Bill Engdahl on just how hard it is to change economic minds in Russia.  Keep in mind that Russia's conversion back to "western-style-capitalism" happened at a most inopportune time.  Had that decision been taken in say, 1953, it would have likely had a much happier outcome.  In those days, the USA economists running around advising governments were mostly products of the New Deal / WWII.  They had pretty clear ideas of how to organize large-scale projects, put people to work, reduce income inequality, etc.  The guys who went to advise the "fallen" USSR after 1989 were, all of them, doctrinaire neoliberals.  The outcome was a disaster.  Life expectancies fell and the economy shrank more than the USA during the great depression.  Worst of all, Russia got into hock with the IMF / World Bank which insured they got regular doses of bad neoliberal advice.

One would think that after such a near-death experience, Russia would have thrown neoliberalism in all its forms on the trash-heap of history.  She would have plenty of justification for doing just that.  Yet as Engdahl reports, doctrinaire neoliberals hold important spots in the management of the Russian economy.  What is even more depressing is that these people have been rewarded with enough spifs over the last 25 years so that the idea that their crackpot theories are damaging their own economy is literally unthinkable.  Imagine  yourself a Russian economist.  You know that Marxism was an ongoing catastrophe so the alternative had to be tried.   So here come the experts from Harvard trying to explain how to build a better economy.  Little do you know that the economics they are peddling was, not so long ago, so discredited that George H.W.Bush called it "voodoo."  And then Margaret Thatcher explained that There Is No Alternative.  So the One True Faith is a set of ideas so ridiculously stupid and historically discredited that only a Harvard / Stanford / U Chicago indoctrination will induce an otherwise sentient being into accepting their validity.

I sincerely hope that the Russians figure it out.  This is an important nation with seemingly boundless potential.  In addition, the solar age will not happen without their enthusiastic participation.

Thursday, July 14, 2016

Wall Street's Fraud and Illusion of Social Utility


On April 5 2016, someone posted a story on DailyKos assailing Senator Sanders’ claim that “the business model of Wall Street is fraud.” I was shocked to see the story had enough support to elevate it to the DK recommended list, despite these provably false statements:
...to say that the “business model of Wall Street” is fraud “to a significant degree” is completely irresponsible.  Do you know what else is part of their business model?  Helping enterprises raise capital in order to innovate and grow and provide goods and services to the economy.
On reflection, I realized that there are a lot of new people reading DailyKos who are—how to put this politely?—not completely aware of certain facts. Once or twice a year, Kos proudly notes how many more people are reading this site—which is great and certainly something to be proud of. But, it obviously means that we need to begin a new cycle of educating people about economics, banking, finance, Wall Street, and so on. The facts clearly show that Wall Street is NOT a net benefit to society, but a major reason why the United States continues to suffer poor economic performance for the bottom ninety percent of Americans.

Monday, July 11, 2016

Economic warmongering


As someone who was aware enough to be scared shitless by the Cold War, I find it distressing, to say the least, that there are those who think getting into another face off with Russia and China is somehow a good idea.  The Cuban Missile Crises was not fun for someone in eighth grade.  I was ecstatic when the Wall came down because I mistakenly believed we were finally going to see an end to this madness.  I had forgotten that the forces of institutional memory meant that people who had jobs in government or academe making up shameless lies about the USSR, had almost no other skills when the Warsaw Pact was dissolved.  So now they propose to make war in all its various forms against Putin's Russia.

Supposedly Putin's great international crime was the annexation of Crimea.  Considering that USSR lost approximately 500, 000 in the various pitched battles with the Nazis in WW II over Crimea, the idea that the West was going to get Crimea on the cheap by staging a coup in the Ukraine is insane.  This is a beloved piece of real estate to the Russians ever since Catherine the Great got it away from the Ottoman Empire.  Russia's Navy is headquartered in Sevastopol.  Russia's rich built vacation cottages there.  Think a combination of San Diego and Palm Springs paid for with a lot of blood.  The Crimeans, most of them ethnic Russians, took one look at the chaos and corruption in the Ukraine and overwhelmingly voted to rejoin Russia.  They couldn't believe their good fortune.

And so we see NATO last week make more menacing moves on the borders of Russia.  Of course, anyone who would actually risk a land war with Russia has to explain why they think they know more about fighting in Russia than Hitler and Napoleon.  So the whole standoff comes down to threats of a nuclear exchange—Mutually Assured Destruction (MAD)—and these days, one might suspect that Russia's missiles are better cared for than our own.  So that's out. That leaves economics as the weapon of last resort.  And while the smug financial Masters of the Universe may assume they have the upper hand in such a conflict, neoliberalism is looking shaky these days, payment systems can be replicated, and new trade connections made.  I am certain there are many Russians who will argue that economics sanctions have been a good thing because it forced them brush up on their legendary self-reliance.  And institutional memory means that the growing relationship with China is walking down some familiar hallways.

Monday, July 4, 2016

The British people have forfeited the confidence of their government

The Saker is not a big fan of the USA empire.  Anyone who has carefully followed the crimes of humanity carried out in the name of said empire eventually reaches a stage where even the tiniest stumble of the global ruling class is cause for at least a little celebration.  So there is a small amount of celebration mixed here with a stern warning of what how the Empire will react to a rejection from one of the founding members, and arguably the main inventor and designer of that Empire.  Brexit made a lot of very rich people very angry—not least because a lot of them lost a large pile of money.  Brexit was a peasants' revolt and like such revolts in the past, the big hammer is about to drop.  The slander against the peasants has already started.

While I am not so certain that the ruling classes are beyond redemption or as unwilling to accept a new set of operating instructions as The Saker.  In fact, I grew up in a country that had accepted Keynesianism as an alternate instruction set to the neoliberal swill that dominates economics today.  It was what made the economy so much better for the average worker that even today, that is what made the old days "good" in the minds of so many—especially the Brexit supporters in the English Midlands.

But the Saker is probably right for one simple reason—the English economy today, such as it is, is mostly the banksters in London doing things that are criminal or should be.  Hoping a criminal will go straight is usually misplaced because going straight is so much more difficult and risky than making money by stealing.  Criminals usually win because they will stop at nothing.  Crushing a peasants' revolt is a small price to pay to keep that gravy train rolling.

Monday, June 27, 2016

Will Brexit spread?


The Full Monty, a film set in Sheffield England is a sad but whimsical account of how six unemployed steelworkers attempt to scare up some money by becoming strippers.  While taking off one's clothes is considerably easier than making steel, organizing an act that will actually pay is difficult enough and at the end of the movie when the steelworker-strippers are lustily cheered by a house full of drunken women, there is a sense of accomplishment that passes for a happy ending.

Of course, this happy ending is all fiction.  The real story of Sheffield is far more miserable.  This city had been the heart and soul of English steelmaking since they started making knives in the 14th century.  In the 1740s, Benjamin Huntsman perfected a superior method for making crucible steel and by the 1850s, Henry Bessemer had moved to town with his vastly improved steel process.  Steel was now a mass-produced product and by 1900, Sheffield's population had grown to 491,000.  In 1973, the UK joined the EU.  In the 1980s, Margaret Thatcher "rationalized" Sheffield out of the steel business in an EU-wide restructuring of the industry.   Sheffield was probably targeted because of its long association with trade unionism. 120,000 people lost their jobs.  Sheffield lost its reason to exist.  And even if six of those ex-workers had managed a one-night payoff for going The Full Monty, that still leaves them suffering through an existential nightmare for over 30 years.


A.R. Heathcotes & Co - Steelworks

So guess what?  The people of Sheffield voted to leave the EU.  The vote was closer than in the surrounding countryside because Sheffield itself has become something of center for immigrant settlement.  But the folks who remembered what happened to their city and lives were still enough to carry the day.

The EU is failing for one simple reason. It is based on a ridiculously stupid idea—neoliberalism.  That idea set has been around since forever and can be directly implicated in such disasters as the Panic of 1873 and the Great Depression.  You can fill libraries with solid evidence why these crackpot ideas don't work.  Well, they do work for a tiny few who can afford to buy the economic conversation.  Explain to me how someone in Sheffield whose life is as disaster can EVER relate to people who spout meaningless neoliberal platitudes that were so carefully drilled into their heads as part of their "elite" educations.

What EU doesn't understand is that most people, if given a chance, would gladly throw their smug butts into a dungeon, but will at least vote to get them out of their lives.  Because while most detest the arrogance of our precious "elites," what really infuriates people is that they are so utterly incompetent at building a Europe that actually works for its citizens.

Some pretty good stuff is being written about Brexit.  The ruling class usually gets its way.  And goodness knows, they have a good chance of getting their way this time.  But for a brief moment, they have caught a glimpse of what a world looks like where they don't pick the outcome even after buying up the economics profession, the newspapers, and damn near all the politicians.  It's getting harder to bullshit people.  This is a story worth writing about.
  • The first article today asks a most obvious question, "why does the so-called left defend the EU?"
  • Alexander Mercouris speculates on the spread of Brexit, The US, the EU and the Spectre of Brexit
  • Finally, Michael Hudson snickers about the vast fortunes lost by folks betting the wrong way on Brexit.

Friday, June 24, 2016

Brexit, oh my

As someone who has long held the EU with suspicion, if not outright contempt, I suppose I should be celebrating that the Brits have voted to leave that poisoned organization.  But mostly, I feel fear and resignation because these votes rarely change anything.  The EU has a long history of forcing countries to keep voting until they get it "right."  Worse, the EU's fatal flaw is that it is essentially a neoliberal project and merely getting rid of it won't change much because the UK is awash in committed, home-grown neoliberals—including many in the leadership of the Brexit campaign.  In fact, outside of the campus of the University of Chicago, it would be hard to imagine anyplace where neoliberalism is more widespread and more pure than the Sceptered Isle.  In any case, the mechanics of actually leaving the EU are so convoluted that it will require an absolute minimum of two years to accomplish the task.

If the EU was in fact NOT a neoliberal project, it would probably be the glowing achievement envisioned by it founders.  But it isn't.  So the great task in front of those who are horrified by what the EU has become is to come up with a replacement for neoliberalism, not trash the organizational structure of the offices in Brussels.  Keynes explained the problem best.
“Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back”

Wednesday, June 22, 2016

Operation Barbarossa—75 years on

On Jun 22 1941, the Germans unleashed their by-now well practiced Blitzkrieg on the Soviet Union.  The result would leave nearly 27 million dead from USSR alone.  The destruction was mind-boggling.  If USA had suffered such an invasion, everything from the Atlantic to the Mississippi would have been destroyed.  And yet, because the Soviet Union is so large, they were able to fall back and mount a spectacular defense / counterattack that destroyed the greatest German Armies and eventually drove them back to Berlin.

Yes, we who were born after 1945 in USA have never been told this story.  This is a damn shame because without understanding Barbarossa, not much that happened in the next 50 years made much sense.

Interestingly battle for Russia was reported magnificently in a documentary by one of USA's best film-makers—Frank Capra.  The footage he uses was often shot under dangerous and dificult conditions.  It has been lovingly restored by the US National Archives and is on YouTube.  Or right here.  Watch this and see if it doesn't add a great deal to your worldview.

Monday, June 20, 2016

ExxonMobil CEO: ending oil production is 'not acceptable for humanity'


We want the oil companies to be more enlightened than they are.  Unfortunately, MOST of the criticism of Big Oil is mistaken to the point of goofiness.  Whenever I hear someone go off on oil companies, I want to shout, "If you think these folks are so evil, stop doing business with them."  Of course, that will never happen because people need energy to survive.  Most folks would be in terrible trouble if their energy supplies were cut off for 72 hours.  Fuels are used to grow their food and get it to their kitchens, keep them warm, heat their water, cook their food, etc!  And if their energy supplies were cut off at the wrong time, such as when they were in the middle of heart surgery, they would die in minutes.  Besides, a large number of people would lose their pensions if the oil industry were closed down.

Then there is the reality of the oil business itself.  It takes around 20,000,000 barrels per day to keep the USA running.  That folks, is a LOT of oil.  The people I know in oil are absolutely in awe of that number and spend most of their working lives scrambling to supply that vast ocean of fuels.  The oil companies almost never advertise because people come in to buy whenever that pointer goes to E.  And to get that oil, the oil giants travel to some of the most inhospitable places on earth and deal with some of the most violent and well-armed governments.  They know what they do is important and that it requires the dedication of hard-working, intelligent, and often extremely brave people.  And they don't suffer fools gladly.

The ONLY solution for burning fossil fuels is to come up with another way to power the society without them.  Now it would be nice if the oil companies were working on that problem, but considering the size of the problems they must solve on a daily basis, it is probably a bit much to expect them to take on another insanely difficult challenge.  And so we discover that the folks who figured out how to make affordable solar panels came from the computer industry—specifically the people who figured out how to coat glass with semiconductors.  I found out not long ago that the key actor was Applied Materials—the people who made the tools necessary to fabricate integrated circuits.  There is also an excellent Youtube on how all this was accomplished (about 30 minutes).

Monday, June 13, 2016

New journalism—what happens when mainstream media becomes hated by all?


The commercial "mainstream" media has been in trouble for quite awhile now.  I pretty much gave up on it in 1982.  After four years of microscopically examining the flaws of the Carter administration, I realized that the same "journalists" were going to give Reagan a free pass for policy and administrative decisions that were far worse than anything Carter had done.  I decided that watching such outright lying and abject stupidity was probably bad for my health and one day, I just stopped watching the newscasts and reading the daily papers.  As a news junkie since junior high, this was harder than I thought it would be.  Finding alternative news sources turned out to be difficult and expensive and the closest newsstand that sold what I was looking for was a 14-mile round trip.  So yes, I cheated.  I'd flip on CBS or PBS on occasion to see if I was missing something interesting or important.  Mostly I confirmed that infotainment was just as big a time-waster as I remembered.

There was also a fascinating outlet for my political and social curiosity.  About the same time, I stumbled across my maternal grandfather's reading list from the 1920s.  He was a regular customer of the output of a Girard Kansas progressive publishing house run by a relocated Philadelphia lawyer named Emanuel Haldeman-Julius.  His main product were these nickel and dime books for the working man called The Little Blue Books.  Soon, I met a guy who had boxes of these things and would eventually read over 400 of them.  It was the most incredible intellectual experience of my life.
The novelist Louis L’Amour (1908-1988) described the Haldeman-Julius publications in his autobiography and their potential influence:

Riding a freight train out of El Paso, I had my first contact with the Little Blue Books. Another hobo was reading one, and when he finished he gave it to me. The Little Blue Books were a godsend to wandering men and no doubt to many others. Published in Girard, Kansas, by Haldeman-Julius, they were slightly larger than a playing card and had sky-blue paper covers with heavy black print titles. I believed there were something more than three thousand titles in all and they were sold on newsstands for 5 or 10 cents each. Often in the years following, I carried ten or fifteen of them in my pockets, reading when I could. Among the books available were the plays of Shakespeare, collections of short stories by De Maupassant, Poe, Jack LondonGogol, Gorky, Kipling, Gautier, Henry James, and Balzac. There were collections of essays by Voltaire, Emerson, and Charles Lamb, among others. There were books on the history of music and architecture, painting, the principles of electricity; and, generally speaking, the books offered a wide range of literature and ideas. […] In subsequent years I read several hundred of the Little Blue Books, including books by Tom Paine, Charles Darwin, and Thomas Huxley.
So no, I did not miss being lied to by folks who were turning CBS News into light fiction.  And when I got connected to the internet, any reason to look at commercial news utterly vanished.  As I say these days, "Ignorance is a choice!"  But the internet is not an unvarnished blessing.  In fact, most of what's there is crazy and ignorant.  But here's the deal—even if the internet is 98% rubbish, the remaining 2% is worth knowing.  And 2% of all of human knowledge is more that the brightest among us can hope to absorb in a lifetime.  So the bigger question is, "How do you find the worthy 2%?"

Actually, I have a BS filter that works so well, I barely think about it any more.  But recently, I had a young man ask me how I felt so sure-footed in separating the wheat from the chaff.  My answer had two parts.
  • Even with the internet, it still helps to read the books written by those who were there when the great human ideals were invented.  
  • Never scorn as unimportant the little factoids that describe how the world works.  It may not seem a big deal to know that water runs downhill or that the suns rises and sets in a different place each day with a certainty that can be predicted for centuries in advance. But you would be astonished at how many arguments fail to meet such simple intellectual standards.  Even better, large complex arguments can be constructed from a multitude of smaller facts that are beyond rational debate.
Predictions of the death of mainstream journalism have been around for a couple of decades now.  I figured the time for these dinosaurs was past when I saw of survey conducted by the Washington Post where over 30% did not want delivery of the Post—even if it was free.  Of course, Washington is a town where people still use fax machines and the nation's nuclear arsenal is controlled by an ancient computer system that uses 8" floppies.  So I would imagine that the pundits who share the inside-the-beltway thinking will be the very last to know that the Post is not a useful and reliable news source.

Saturday, June 11, 2016

Political update—is this the best we can do?


Politics is beyond depressing these days.  Yes I know, I am the one who argues that the big problems can only be solved by putting the Producer Classes back to work.  The best that politics can accomplish is to make it possible for the Producers to organize into a major problem-solving mode.  The worst they can do is divert all the community's spare change into their own bank accounts—they certainly can get in the way.

The idea that we can afford to waste another four years diddling while the earth burns is beyond obscene.  We just wasted the last eight years getting almost nothing done and since Hillary promises to be four more years of Obama, there is little hope for improvement.  And Trump is a climate change denier.  The guy owns some expensive Florida beach-front property so the evidence that the climate is changing is set to wash up on his lawn.  And since he does have a few Producer tendencies, he might be open to some enlightenment if he could be convinced that doing something was up his alley, but that is expecting a big conversion.

The good news is that Bernie Sanders has demonstrated just how large an audience there is for a Progressive / Populist message and how possible it is to access them with a combination of the internet and live appearances.  That he got so many votes is miraculous.  Here in Minnesota he won 60-40.  And I am pretty sure that not one person made a pro-Bernie voting decision reading the Minneapolis Tribune or watching WCCO.  Sanders did run some professionally-produced ads on local TV but I am not sure those moved votes either.  Changes in communication technology tend to lead to major social change like the printing press in Germany leading to the Protestant Reformation.  I keep waiting for digital communication to lead to significant social shifts.  The Sanders campaign may be what I have been looking for.

Even so, I look at the disaster that is the neocon / neoliberal loonie Hillary Clinton and feel genuine despair.  How could it come to this?  It wouldn't be so bad if there were plenty of time to solve the big problems rolling towards us with the certainty of gravity and arithmetic.  But there isn't.



Monday, June 6, 2016

Upgrading lighting


There is no easier or better way to upgrade one's energy efficiency than by swapping out light bulbs.  That doesn't mean it's easy because the whole lighting market has been a moving target for several years.  It has been confusing enough so that there has been political blowback against energy-efficient bulbs.  I know someone who bought a whole big box of tungsten incandescent bulbs because he thought the energy efficiency standards were going to fail.  Our resident political nutcase, Michele Bachmann, even made her war on energy-efficient lighting part of her run for the presidency.

And hard as it is for me to admit it, Bachmann had a point.  The interim "solution" was the compact fluorescent bulbs (the curly-tails).  They were generally affordable but had significant problems shared with the rest of fluorescent bulbs—mostly they contained mercury.  But the other big problem was that they had an unpleasant color—fluorescent bulbs start out green.  In order to make them look like incandescent lights (which everyone loves because they resemble fire light) an orange-yellow coloring had to be added.  Since the original green was never fully covered, the resulting light could make skin look jaundiced and most folks object to looking like they may be suffering from liver disease.

The real solution was the Light Emitting Diode (LED).  These utterly clever devices were astonishingly energy efficient.  But in the early versions, they didn't put out a lot of light and were EX-PEN-SIVE.  The first bulb to replace a 40 watt incandescent I saw at Home Depot about eight years ago cost $40.  Now there were calculations that in 10 years or so, you could pay for one of these with electrical savings but $40 was still too much sticker shock for me.  And seriously, this so-called 40 watt replacement only put out about 80% the light of a $1 tungsten bulb.

Two years ago, I went shopping for replacements for the 50 watt GU-10 halogen bulbs in some track lighting.  There were  LED replacements at the local big-box building supply but they still wanted $25.  I was able to find some on Amazon for less than $7 so that's what I bought.  The LED replacement uses 6 watts.

A month ago, we decided to finally strip some truly ugly wallpaper off the dining room wall and paint.  My SO had purchased a lovely George Nelson bubble lamp about three years ago to replace an ugly brass chandelier, but she has been sick and so this project sank to the very bottom of our to-do list.  But one morning I heard her cursing at the wall paper steamer so I knew the project was back on.  And I was going to have to make some decisions about installing this wonderful light fixture.

The instructions said the fixture could accommodate up to a 150 watt incandescent.  While LEDs have come down considerably in price, there was still really nothing that big and even two 75 watt lamps would cost about $80.  However, the 60 watt replacements are now running in the $3-5 range—the more expensive ones are dimmable.   So I chose to put two 60s (9.5 watts) in the bubble knowing that this was already a lot of light.  The other choice was color.  The replacement for incandescent bulbs are usually listed at 2700°.  And unlike the curly tails, they really are 2700°.  But there are also many LEDs at 3000° and it is a color I really like.  It is close enough to the old tungsten color but it is just enough more "white-bright" to make reading easier and food look better.

About those dimmers.  In the old incandescent days, a dimmer merely changed the amount of electricity flowing to the bulb.  With LEDs, the dimmer must control a diode.  The bad news is if you want to control your light levels, you must replace that too ($25).  The good news, in my humble opinion, is that with an LED, the light output changes but the color does not.  I find this cool beyond words.  But apparently, not everyone agrees because there are now LEDs that DO change color as they are dimmed.  In fact, I saw one LED that allowed you to dial up the color from candlelight (2100°) to high noon sunlight (6200°) with an app on your smartphone.

So the lessons I learned about the brave new world of LEDs include:

1) The most common bulbs are dirt cheap already.  These include 40 and 60 watt replacements and the recessed can lighting bulbs.

2) The great prices can be had at Costco, IKEA, and Amazon (and probably others.)  My local big box store has a brand new LED section with prices as low as IKEA.  Price is no longer an excuse to not buy these truly amazing bulbs.

3) There are reasons for installing LEDs beyond costs.  Best example might be replacing tube fluorescents.  The replacement for a 40 watt tube currently costs around $12.  The difference in efficiency is small compared to swapping out an incandescent—the LED requires 21 watts so the energy saving is less than 1/2.  But I know someone who works under those tubes and recently they were replaced by LEDs.  Instant on.  No flickering (no headaches).  No hum.  No mercury.  Great color.  Changing the light source has changed his work environment.

So here it is—our new dining room fixture.  Designed in 1952—it became an icon of Modernism.  It has been described as a paper lantern crossed with a flying saucer.  The amazing exterior is a plastic once used to mothball Liberty ships.  And I am willing to bet that this classic has never looked better than with LEDs providing the light.  We are extremely pleased with the outcome.  I had a blast learning the possibilities of this new world of lighting.  And when I get done converting the house to LEDs, we will use less than 20% of the electricity of the old lights.

Monday, May 30, 2016

The war on the producer classes

My personal discovery that "liberals' were grossly intolerant of working people came as quite a shock.  One of the characteristics of a rural Corn Belt upbringing was knowing men who took great pride in being good with tools.  Even people who could afford to hire out such work (construction, machinery repair, etc.) usually had gone through a period when they had actually worked with their own hands.  My grandfather could fix almost anything and firmly believed that there was only one truly virtuous occupation—farming.  He made allowances for clergy so as to to include my father but I am pretty certain that exception was only made because my father had grown up on a working farm.  I can honestly say that I never heard anyone disparage productive work until I went off to the University where I discovered there were plenty of people who treated working people with utter contempt.

My favorite story came one bitterly cold winter night when I took a shortcut across a parking lot where I discovered two guys trying to jump-start a car.  They were doing it all wrong to the point where they were about to blow up a lead-acid battery.  I straightened out their jump and a few minutes later, the dead car had returned to life.  They seemed quite appreciative until one recognized me as one his students.  How could I possibly be a serious student if I was so damn working-class?  He literally stared at me.  I should have let those two wreck their cars and blow sulfuric acid all over their contemptuous mugs.

No long after, I discovered a neighbor in the dorm who was extolling the virtue of the SDS.  These geniuses taught the working people were no longer the vanguard of the revolution but that "youth" was now a class.  I thought he was crazy / joking but nooooo, I would so discover that the Democratic Party was about to abandon its labor roots.  45 years later, and my party still hasn't enacted a decent health-care system but we have beaten every social issue into advanced boredom.

But listening to the Yuppie Scum "liberals" who are trying to sell us a women with severe right-wing tendencies as a "progressive" has brought out that old anti-worker animus.  Kilpatrick does a good job below of describing the class warfare that has raged within the Democratic Party for over a generation.

Friday, May 27, 2016

More on diesel emissions cheating


When Volkswagen got caught using cheating software for their TDI line of diesels, I suspected that they were a LONG way from being alone.  Part of the reason stems from a lecture I got in 1973 from a transportation-technology instructor I had as part of my city planning sequence.  The professor was from the mechanical engineering department over at the Institute of Technology.  Keep in mind this was the University of Minnesota and not some car-state school like U Michigan or Perdue.  Even so, I am pretty sure he had his facts straight.  And the point he was making that day was it was going to be impossible to make diesel engines both clean and super energy-efficient.  He wrote "Nitrous Oxide" in big letters across the top of the chalk board to ensure we understood the important problem area.  He argued that regulators—especially at the California Air Resources Board—were about to enact regulations that were physically impossible to meet.

I did not want to believe him.  I wanted to believe that predicting something was impossible was not an especially valid tactic in any area dominated by professional inventors.  Proving skeptics wrong was pretty much the major thrust of the 20th century.  But now that I have passed my 66th birthday, I have discovered that there are indeed many things that ARE physically impossible, and that there are valid ways of knowing what they are.  And no, George Jetson's flying car that folded up into a briefcase light enough to be carried by an obvious wimp was never going to be built no matter how much development money was thrown at the project.

So I have come to agree with my old prof.  It looks like there really was no way to make a decent diesel engine that met those flight-of-fancy regulations that left him sputtering.  Below, we have a list of the strategies employed by various automakers in the pursuit of something that really WAS physically impossible.

Thursday, May 26, 2016

TTIP necessary to protect megabanks from prosecution

Oh, those lovely trade agreements.  Those of us who are veterans of the 1992-93 fight against NAFTA find it hard to believe that someone has designed a trade deal even more odious.  Someone has been working overtime because the TTIP makes NAFTA look like an act of charity.

The problem with these trade deals is that they operate from the assumption that anything that might possibly impede unfettered trade is by definition, evil.  And so social necessities like environmental laws, consumer protection, fair labor standards, etc. are all targeted as impediments to trade.  Worse, these local laws and regulations can be sued out existence if it can be proven that they materially harm the interests of those who would pollute, run sweatshops, and otherwise accelerate the race to the bottom.

It requires a lot of coordinated political action to get most such laws and regulations in place.  Watching them be eliminated naturally upsets those whose efforts these trade deals negate.  Not surprisingly, these trade deals face enormous political opposition.  That's not a problem for those who would profit from them.  For them, democracy is merely a messy detail.  The only hope is that the opposition to the mega-Predators who want these new NAFTA-on-steroids deals is substantially larger and vastly more organized than in 1993.  It also helps to have the NAFTA disaster to point to.

Monday, May 23, 2016

The environmental costs of militarism


The last time I made the mistake of attending a conference / seminar on the subject of climate change, we were treated to a keynote address by a long-time and very successful local weatherman / entrepreneur who after a couple of decades of climate change denial, had embarked on a new career explaining why he finally had become convinced that the science predicting a climate catastrophe was correct.  The guy's commercial success over the years was hardly an accident—he is witty and charming.  So charming, in fact, it was easy to overlook the fact that he has also been associated with some of the more crackpot versions of Christianity, is a lifetime Republican who still looks at the Reagan presidency as one of the high-water marks of USA history, and carries himself with the kind of swagger associated with those who have made a large pile of money in life.  But these attributes were essential to his new persona.  He was saying, "Look at me!  Even someone who had the prime characteristics of a climate change denier has now seen the light.  So believe the light!"

Tales of such a major conversion are central to the teachings of Christianity.  In fact, the majority of the New Testament revolves around the story of how Saul, who once actively participated in the persecution and murder of early Christians had seen the light and become Paul, the missionary who spread the new faith throughout the Roman Empire, had written the most popular lessons of the new doctrine, and in the end, had become a martyr of the cause.  Our newly enlightened weatherman was even named Paul in case any of us were to miss the lesson for the day.

As someone who was exposed to regular readings from the letters of Saint Paul throughout childhood, I understood and could appreciate what our keynote speaker was up to.  Even so, I started to wince when he began to quote Reagan or assured us that there was nothing about the practices of "free enterprise" that would lead to climate change denial.  But then he began to discuss how the US Navy, whose most important installations are at sea level and hence especially vulnerable to changes in those sea levels, were among those who took the science of climate change most seriously of all.  At one point he said, "When it comes to climate change, the Navy really gets it."  Because I know the enormous contributions made by the USA military to the carbon loading of the atmosphere, I almost threw up in my mouth.  No Paul, the Navy does NOT "get it."

Because he is a public figure, our weatherman Paul is now targeted by the climate change denying trolls.  This persecution probably assures him that he also "gets it."  Well, Paul, you don't get it but thanks for trying.

Saturday, May 21, 2016

Michael Lewis: The Book That Will Save Banking From Itself

During my visit with Jon last month, we both agreed that Michael Lewis is one of the best USA writers living. A partial list of some of Lewis's books:

Liar's Poker: Rising Through the Wreckage of Wall Street (1989)
Moneyball: The Art of Winning an Unfair Game (2003)
The Blind Side: Evolution of a Game (2006)
The Big Short: Inside the Doomsday Machine (2010)

The Big Short was the basis of the movie Jon reviewed here a couple months ago; I reviewed the book back in June 2011.

Since the article below was written by Lewis, I overcame some grave misgivings, and decided to post it here. It is a rather detailed review of a recent book by the former governor of the Bank of England (2003-2013) Mervyn King. The book is entitled The End of Alchemy: Money, Banking, and the Future of the Global Economy, and it presents King's argument that nothing has fundamentally altered the financial system's stupidity, greed, and appetite for high-payoff risks, followed by King's detailed proposal for what governments and financial regulators should do before the next crisis inevitably hits. Normally, I do not believe that highly technocratic financial discussions conduce to furthering an enlightened public discourse. Frankly, such discussions are usually a steaming pile of bovine manure. But now that it appears our sole choice for USA President is Trumpillary, it seems very likely that the best we can hope for in terms of forcing the banksters to behave civilly is exactly the sort of proposal King is putting forward.

I also am usually reluctant to hold anything British in a favorable light. But, some of the most startlingly truthful pronouncements by financial officials during and after the Crash of 2007-2009 were from King, and from Adair Turner, who became chairman of the UK Financial Services Authority in September, 2008, five days after Lehman Brothers collapsed.

In my opinion, King's proposal to have central banks determine beforehand how much capital they would lend against big banks' riskier assets in a crisis is fundamentally flawed on three counts. First - which Lewis discusses briefly - is that the big banks have achieved "regulatory capture." It is very likely that in a severe enough crisis, what a central bank had previously said would be the upper limit it would lend to a troubled bank in a crisis, will simply be ignored. Or, some other part of government will be prevailed upon to give the bankers the money they say they need to prevent the collapse of Western civilization.

Second, King's proposal accepts as valid the current business model of Wall Street and the City of London. He is not proposing to outright prohibit the riskiest behavior of the big banks. Rather, he explicitly argues that with the role of a central bank in a crisis firmly fixed beforehand, "the market" can be relied on to do the right thing, and leaving free the "incentives to innovate." This is, therefore, no repudiation of the reigning neo-liberal economic paradigm of the past half century.

Third is an extension of the second: I do not believe that we can build a sustainable economic future for humankind if we continue to treat present financial elites as legitimate. The past half century of financial legerdemain and shenanigans have, in a financial echo of Grehsam's Law, turned most of the financial system into a vast criminal enterprise. I agree with Ian Welsh, who a few days ago wrote Seven Rules for Running a Real Left-Wing Government:
The banking sector creates money. Money determines what people can and cannot do. This is the control mechanism for the economy in any state which runs on markets. You must control it. If you control it, you can use it to strangle your domestic enemies. If you do not, your enemies will use it to strangle you.
Welsh goes on to provide a stark example of how Obama, had he been a real leftist, could have used the crimes of the banksters to seize their money under RICO. 

Far better to simply tax all financial market transactions. You don't even have to ban the most odious transactions outright. A simple tax of less than one full percent would be enough to render much of the speculative trading in financial markets unprofitable.

Monday, May 16, 2016

Ellen Brown on Trump's monetary musings

It is really hard to know what part of Donald Trump's message he means or even understands.  I was a designated driver the night Obama won the election of 2008 and watched as deliriously happy and very drunken supporters celebrate what they thought was a new day.  He had talked for months about hope and by god, they were projecting all their hopes on him.  I am pretty sure that Trump's supporters are making the same mistake.  After all, he promises to bring about a brighter day but has already selected a Goldman Sachs man as an economic advisor.

That said, his latest dustup with the lords of high finance over monetary theory has been very interesting.  Not surprisingly, they are aghast at his willingness to point out that the ghouls of austerity do NOT have a monopoly on good economic ideas.  In fact, they have been a global disaster and Trump has much enjoyed talking about this.  So along comes our hero Ellen Brown to inform us how Trump's monetary ideas have much in common with folks like Lincoln and Franklin—two guys who actually appear on the currency itself.  Whether Trump actually understands this little piece of history is an open question.  And to be perfectly honest, it doesn't matter a whole lot that he understands who may have had similar thoughts about money in the past because once someone understands that money is merely a convenience, the idea that money is scarce becomes ridiculous.  And such a thought does not go away no matter who is shouting that the idea is crazy.

It is ideas like these that make the Republican establishment panic at the thought that Trump is their presumptive nominee.  We can be pretty sure they are not worried that he is a walking insult to political correctness—in fact, they probably approve of that.  But if Trump is willing to expose the big lies that banksters use to enrich themselves at the expense of the rest of us, then he MUST be stopped.  We will see.  After all, real estate dvelopers are essentially the only people who understand that their interests and the interests of the banksters do not align and have the expertise and clout to do something about it.  So even though Trump seems to have a short attention span, this might not be an idea that goes away so easily.

Sunday, May 15, 2016

CO2 passes 400 ppm

Not surprisingly, the global CO2 atmospheric concentration continues to rise.  It's getting into scary territory.  400 ppm hasn't been observed for a very long time.  What will happen next is still an open question but none of the guesses are encouraging.

Monday, May 9, 2016

They do not give a shit

On April 8, 2016, I composed a post about the possible final demise of the British Steel industry inspired by a suggestion from reader Mike.  In the ensuing comments, Mike made a further suggestion that is part of today's post.  There are many reasons why this article is so pointedly accurate—not least of which is the tale of how neoliberal thinking makes it virtually impossible for a country like UK to properly value its last remaining steel mill.

Foremost, the title says it all—"they do not give shit."  The "they" are the Leisure Class moneychangers who hold steelmaking in utter disregard.  It is something the "proles" do and no matter how technologically advanced the process may be, it is something as worthy of disposal as a used Tampax.  They do not care because in order to care, they would have to understand what they are throwing away.  And in order to understand, they would have to do the hard work of actually studying the struggles necessary to turn steel from this extremely rare material that was usually fashioned into swords into a mass-produced commodity that could criss-cross a continent with railroad tracks and create the frames for skyscrapers.

When I attempt to explain the physical origins of climate change, I am often met with a similar form of intellectual laziness.  Most people have zero interest in understanding, for example, the role fossil fuels play in feeding a hungry planet.  And even if they do listen to the figures for the fuels consumed, their usual response is to suggest that folks just stop doing things that way.  The idea that they should even be bothered with the tale of how all the decisions to embed fossil fuels in the food system came to be made, is utterly abhorrent.  So naturally, they gravitate towards simplistic solutions like carbon taxes—make fuel more expensive and folks will just figure out a way to get along with less fuel.  Don't bother us with the details—just do it.  So nothing gets done about climate change because those who rule our lives do NOT give a shit about how the community's necessary work is organized.

We will start making progress on the problems of climate change when our Leisure Class overlords start to actually give a shit about important matters—and not before.