Monday, October 31, 2016
Very little of what has been revealed in the Wikileaks dump of the Podesta emails comes as a surprise. Everyone I know suspected at least the crime, corruption, and sleaze they have shown. But I am still stunned by the levels of arrogance and the superficial nature of the discussion.
The assumption that ties all this together is the seemingly unshakable belief that everything is about optics. If something looks bad, well then the solution is to make things look better. And the corollary to this is the idea that anyone not convinced by these efforts to change the optics much surely suffer from some serious psychological disorder. The idea that there are people suffering from real problems that need real solutions seems never to appear on the radars of the correspondents of John Podesta. For them, if something does not conform to their preferred narrative, it cannot exist.
There are far too many subjects where real matters are reduced by our "leadership" to a matter of optics. Of course, my personal favorite is climate change / end of the petroleum age. Perhaps the biggest reason why this one fascinates me so is that it is a simple struggle between faith-based arguments (religion, politics, pop psychology, etc) and simple arithmetic. I come down on the side of arithmetic because in my 67 years on earth, it has always worked. I tend to lose patience with the faith-based versions of perceived reality because as a childhood of religious indoctrination taught me, such beliefs are wrong so often the historical exceptions could be covered in a short Ted talk.
Unfortunately, there is the related subject of imperialism / empire building that became necessary when USA became a net importer of oil. Our empire is being run by the most pig-ignorant people imaginable. Since most of what official Washington believes to be true is based on data gathered by a highly politicized "intelligence" community, we may fairly think of our diplomatic corps as being populated by designer morons. These folks believe above all else in "American Exceptionalism" so for them there is no point is learning anything from the rest of the world because those poor souls are, at best, American wannabes anyway. Ignorance and arrogance—the worst combination of characteristics for running an empire imaginable.
The Saker seems to think that this crazy situation is going to come crashing down because of its internal contradictions. He reasons that ignorant folks determined to enrage everyone else on earth will ultimately fail no matter how well-armed and willing to lie, kill and, destroy they might be. We shall see. The main threat to the empire comes from Russia which is currently committing the unforgivable sin of defending itself. See, if we were taught a reasonably accurate history of WW II we would actually have some idea of what those people are willing to do to defend themselves. And Putin is a son of Leningrad / St. Petersburg—where over a million perished during the 900 day siege and yet they still prevailed. When you hear the morons going off about what they think they know about Putin, the tiny detail that he was born to survivors of that vicious seige seems unimportant. Ignorance, the gift that keeps on giving.
Monday, October 24, 2016
One of the persistent disappointments in my life has been the inability to interest more folks in the writings of Thorstein Veblen. Goodness knows I have tried—speeches, websites, multimedia CDs, letters, and boring everyone I could buttonhole. I discovered TBV while searching for a believable explanation for what happened to trigger the global depression of 1981-82. I didn't actually know what I was looking for and had the resources of the St. Paul library system so I did a bunch of reading—history, business magazines, trade journals, the heavy hitters on political economy from Marx to Hayek to Keynes, even philosophy. Nothing seemed to be relevant to my search.
The death of my uncle in April 1984 got my mother talking about the insanely difficult struggle that faced the family as they tried to survive the 1920s and 30s in rural Minnesota (yes, they call them the Roaring 20s but for small farmers, it was catastrophic.) Mom gave me enough clues so that with the skilled help of my favorite librarians, I was able to partially reconstruct my grandfather's reading list. Through the magic of inter-library loans, I began to read magazines like the 1920s Appeal to Reason / American Freeman that provided serious analysis of why farmers were starving in the age of the flappers. What was so amazing was how economically similar the 1920s and the 1980s were—at least down on the farm. It was stunning how politically sophisticated my grandfather's generation was in so many ways.
In the middle of this reading jag, I discovered The Theory of the Leisure Class (TOLC) by Thorstein Veblen. My newfound exposure to the political writings of the 1920s was extremely helpful in making it through that very challenging tome. Because reading was the only method of communicating ideas in those days, people just read more and more difficult books (TOLC became a popular best-seller.) Here I was a university graduate and it took several years of reading the 1920s musings to become comfortable with the style and vocabulary of Veblen. Even so, I believe that reading the first three pages of TOLC shed more light on how the world actually works than the approximately 250 books and 1000 magazine articles I had read up until that point. It was breath-taking.
If you count Veblen's translation of the Lexdaela Saga, he wrote 10 books. By now I have read all 10 at least twice. In 1993, to celebrate the rebuilding of the Veblen farmhouse in Minnesota, I read all of them in the order in which they were published. I highly recommend the experience. However, I also know that for most, this would be impossible because of the heavy commitment of time and effort. Therefore, it is always good when someone who really understands Veblen takes the time to explain what the fuss is all about in an easily digestible essay. As the world's leading Institutionalist, Michael Hudson is superbly placed to explain Veblen and this weekend, he hit one out of the park (see below.)
What is so insightful is that he manages to include the highlights of Veblen's thinking (at least according to me) while explaining why Veblen is still relevant. These include:
- “Veblen put forth a basic distinction between the productiveness of ‘industry’ run by skilled engineers, which manufactures real goods of utility, and the parasitism of ‘business,’ which exists only to make profits for a leisure class which engages in ‘conspicuous consumption’.
- Economic rent – the excess of price over this “real cost” – is unearned income.
- “Real estate is an enterprise in ‘futures,’ designed to get something for nothing from the unwary, of whom it is believed by experienced persons that ‘there is one born every minute.’”
- Veblen criticized academic economists for having fallen subject to “trained incapacity” as a result of being turned into factotums to defend rentier interests.
- His Theory of Business Enterprise (1904) emphasized the divergence between productive capacity, the book value of business assets and their stock-market price (what today is called the Q ratio of market price to book value). He saw the rising financial overhead as leading toward corporate bankruptcy and liquidation. Industry was becoming financialized, putting financial gains ahead of production.
The Veblen farm sits on one of the highest points in the county. This means it is often very windy as is readily apparent from the tree next to the old granary.
This has been one of those gorgeous autumns where even the oaks turn a wonderful russet color. These trees are near where the Veblens had a woodlot. The farm was mostly grassland so they had to have a source of fuel. Burr oaks make an especially welcoming fire and are not so good for construction. The Veblen woodlot also had red and white oaks. Much of the barn was framed with white oak.
Thursday, October 20, 2016
Regular readers of this blog know that I am most certainly NOT a fan of carbon taxes. As a public policy prescription for climate change, they fail on two obvious and disqualifying levels:
- Carbon taxes assume that if you just make it more painful to use carbon, folks are just naturally going to figure out how to do with less. And while this idea works when the subject is discretionary use of energy (water skiing, for example), the overwhelming use of energy is for activities that relate to survival—cooking, growing food, keeping warm, work-related travel, etc. For the necessary activities, the only solution is to replace the energy consumption with new tools and methods that don't require fire to operate. Unless carbon taxes are strictly used for infrastructure replacement, they are worse than worthless because they lead to problem #2.
- Carbon taxes are the theological equivalent to the extremely controversial doctrine of indulgences. They allow the rich sinner to pay for the forgiveness of his sins. While indulgences are mostly a cynical fund-raising ploy, they actually do structural damage to the social contract. For example, Al Gore believes in carbon taxes. As a very rich man, they would have minimal effect on his lifestyle in any case. So after he made a small pile on his movie that was supposed to be a warning about climate change, he spent part of the proceedings jetting around in a very nice bizjet—perhaps the most lavish user of carbon fuels ever invented. And how does he sell this hypocrisy? He bought some indulgences—some carbon "offsets" and some political speeches about carbon taxes.
The following is a long and complex essay and if you want to find out what happens when stale ideas (like indulgences which were around to trigger the Protestant Reformation in 1517) meets a global society run by fuels that simply can no longer be burned, read it all. I look at it as just another cautionary tale of what happens when folks try to apply Predator Class thinking to a Producer Class problem.
Monday, October 17, 2016
Of all the forms of human behavior I have paid attention to in life, the one that continues to baffle me is the "soft power" of the creditor classes. Yes, they provide essential services, but that is a trivial fraction of their activities. The rest of what they do is just plain naked money-grabbing. But to hear them describe themselves, they are paragons of financial, political, and moral virtue. Then, they surround themselves with the trappings of power—bank architecture is so predictable as to be a cliché. And it works. They keep their power and no one of significance goes to jail no matter the outrage.
So far, the only place that has managed to rise above the soft power of international finance is Iceland. It requires a uniquely egalitarian society to rise above the bankster bullshit and they have one. Part of this come from the fact that it is a country small enough so it is possible to actually know who runs the significant elements. But part is probably the Viking heritage—during a storm in a longboat, no one escaped the dousing when waves broke over the gunwales. In such conditions, people who didn't understand the concept of "we are all in this together" didn't last all that long.
And so Iceland has thrown their banksters in jail while in USA, they have been returned to their power to loot and given handsome bonuses for keeping the specter of meaningful regulation and enforcement at bay. Not surprisingly, I much prefer the Icelandic approach.
One of the more recent Wikileaks dumps shows how Citigroup managed to surround young Obama with layers of advisors whose job it was to argue that their naked criminality should not have been a crime in the first place. Notice how accurate Citigroup's list of cabinet appointees turned out to be and this was written well before the election even happened. To show how successful this operation was, compare it with the Icelandic outcome. And so the global economy remains in the hands of criminals who can only destroy. This simply cannot continue. Turns out the banksters are so destructive, they are about to destroy life on earth as we know it. It's possible someone will organize resistance to this madness.
Saturday, October 15, 2016
The presidential election of 2016 is SO damn ugly, I mostly just want to look away. When I worked as a surgical orderly as ordered by my draft board for the "crime" of refusing to participate in their war crimes against the Vietnamese people, I got to see a lot of mindbendingly ugly stuff. My personal "favorite" involved a young motorcyclist who had managed to dribble his head along the pavement without a helmet for a hundred yards. I got an especially long look because when I arrived to transport him to surgery, the folks from neurology were still debating whether his brain waves had been flat for the required 24 hours. Meanwhile transplant was screaming a wide assortment of doctor-level curses at them because they had already prepped recipients who were NOT going to be happy if the brain jocks lost the donor. (Which is exactly what happened. The rules and technologies have changed since then. For example, improved preservation techniques have extended the time available between harvesting and transplant. In 1971 they still needed a "live" donor.)
In my mind, this election is THAT ugly.
And because politics has strayed SO far from its intended objective of presenting alternative solutions to the problems of the day, it has become actually worse than simply useless. I believe the absurdity of this contest can be summed up when the party of the Kennedys and Bill Clinton resorts to calling out a known womanizer for his sexual appetites. At least Donald Trump hasn't driven anyone off a bridge yet. But let's not quibble. Discussing sex is what politics has come to. And here I am wondering when the adults will start insisting on how we are ever going to confront the serious matters like climate change and the other environmental disasters. Our schools are a disaster and serve no function other than to deliver the young into debt slavery. Our main channels of communication have been seized by skilled liars who stupefy the public with insane propaganda. But we can still talk about sex so we aren't quite the brain-dead donor material we should be by rights.
My world is especially conflicted because I have to assume that the vast majority of my pet Producing Classes are Trump supporters. They are the ones who have been on wrong end of neoliberalism for over a generation and are looking for someone, anyone, who will speak for their economic and social interests. Trump may have his flaws, goes their reasoning, but he is the closest thing to what they are looking for in MANY election cycles. At least he has built something. It may be as useless as another golf course, as ugly as an Atlantic City casino, and as socially destructive as overpriced housing for New York's mega-Predators, but it is something! We can fill in the blanks later, say the Producers who are hoping for somebody to represent their world-view.
And so the party of the so-called working class is represented by a woman who utterly loathes the Producing Classes. She actually has called them "deplorables." And Hillary, I hate to tell you this, but you ARE going to need these people to succeed. And while the great success of neoliberalism has been to lower the life expectancies of the Producers, they probably are not all going to go gently into that good night. If you manage to win this election, your problems will have only begun. Which is an amazing thing to contemplate considering you are already the most hated woman in the history of the planet. And we know this for a certainty because you have surrounded yourself with some of the most deplorable people to have ever set out to "serve" the public.
Paul Street provides a short list of some of Ms. Clinton's most deplorable advisors. Read it and weep.
Monday, October 10, 2016
Of all the dangerous beliefs in magic / the miraculous, the belief that debt will lead to prosperity is arguably the most wrongheaded. But it persists for a simple reason—for the creditor classes debt is a very good idea indeed. Turns out it is still better to own slaves than to be one. So to keep the idea alive that debt is a good idea, the creditor classes have bought up almost the whole economics world. The escapees from this ideological prison are very few indeed. I have been following this issue for most of my adult life and would hard-pressed to name 20. Two of my favorites are Ellen Brown who concentrates on the question "Why should the simple act of issuing money automatically lead to debt?" and Michael Hudson who wonders why the creditor classes get to write all the economic rules. This concentration on debt is extremely important now that debt has soared to levels never seen before in history.
Once, while in Florida, I met a man who had relocated from Buffalo New York—a place notorious for its huge lake effects snow storms. "Couldn't handle the snow?" I kidded. "Snow?" he responded, "I LIKE snow. What I couldn't get around was the fact that Buffalo never recovered from the recession of 1957" (this was 1989.) I remember this crack often because without some major economic course corrections, societies don't really recover from the big recessions. I am occasionally prone to this sort of thinking myself—I remain convinced that USA has never really recovered from the recession of 1981-82 and can speak to that point for several hours without notes.
So here we have Mr. Hudson making a pretty strong case that the world hasn't really recovered from the recession of 2007-2008 and that even the most establishment / reactionary organizations like the IMF are finally admitting that nothing has been fixed to prevent almost exactly the same thing from happening again only this time with Deutsche Bank acting in the role of Lehman Brothers. In fairness to Hudson, he is probably the king of the long-term perspective and will often recall something the Sumerians did in 3000 BCE. So of course he is correct about not having done anything about the structural problems that made the collapse of the let's-pretend economy in 2007-08 mathematically inevitable. I am pretty sure he uses this example because more people remember that economic disaster a lot better than anything the Sumerians did.
Monday, October 3, 2016
World War II levels of mobilization to combat the problems of climate change seems to a be goal mentioned once again in a country that has been ignoring the problem for far too long. I confess, I use the comparison myself. When one looks at the incredible accomplishments of the WW II generation in terms of producing new things in a very short time, this is the model whether the project was nuclear power or the mass production of antibiotics (penicillin.) Unfortunately nothing, but nothing gets accomplished so fast these days.
Of course, this speed points to the big problem facing those who who propose we just do that again. For example, arguably the best fighter plane of WW II was the P-51 Mustang. From the time the contract was signed to build this plane until it first flew was 151 days. By contrast, the F-35, the lastest fighter plane to be built for the USA military had its first development contract signed 16 NOV 1996 and it isn't ready for service yet in 2016.
Jimmy Carter addressed the massive problems caused by the crises in fossil fuel in a speech given 18 April 1977. Like the ex-Navel officer he was, he called those problems "the moral equivalent of war." We are using more petroluem now than in 1977—so much for war-time problem solving. Sounds more like a F-35 boondoggle.
So here we have Stan Cox talking about a WW II-style mobilization to counter the effects of climate change. I mostly agree with this analysis. What I wonder is—do we still know how to mobilize for big projects? I got to meet some of those giants of WW II production. I don't meet people like that anymore.