Christmas as the divine reminder of the value of equality:
Luke 2:
[8] And there were in the same country shepherds abiding in the field, keeping watch over their flock by night.
[9] And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid.
[10] And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people.
[11] For unto you is born this day in the city of David a Saviour, which is Christ the Lord.
[12] And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.
[13] And suddenly there was with the angel a multitude of the heavenly host praising God, and saying,
[14] Glory to God in the highest, and on earth peace, good will toward men.
So, when the Lord finally decides to make the big PR announcement,
She doesn’t pitch it, like a Lexus or Mercedes commercial, to the people
who can afford a big celebratory binge. She doesn’t announce it first
to the three wise men who had been sent by rich kings able to give some
of the most expensive gifts in the world. She has Her angels go and talk
to the people on the lowest rung of the socio-economic ladder, some
poor guys working outside at night.
This foundation story means that Christianity, no matter how much it would be corrupted (see, for example, Kevin M. Kruse, One Nation Under God: How Corporate America Invented Christian America,
Basic Books, 2015) would be a religion that affirmed the value of all
people, not just the leaders and elites. In fact, Christianity was first
the religion of slaves in the Roman Empire. Two millennia later, when
the world finally began to seriously attempt to eliminate slavery
entirely, it was radical Christians who led the Abolitionist movements
around the world.
This documentary on the resurgence of the electric car is fascinating and extremely well done. The highlight of this doc is that it demonstrates the sort of person it takes to push a new idea into production. It follows Robert Lutz at GM as he green-lights the Volt, Carlos Ghosn at Nissan as he bets significant company resources on the Leaf, and of course, Musk at Tesla. The videographers are there at critical times such as when GM declares bankruptcy and Musk is down to his last $3 million (which is essentially zero in the car business.) It is must watching for anyone remotely interested in the complexities facing anyone interested in electrifying the transportation fleet. Spoiler alert—it will be a BIG job. And yes, it will only succeed if real Producers win the day. In Detroit, Producers are called "car guys" and the Predators are called "bean counters." Lutz should know—he wrote the book.
It also covers the fallout of the financial meltdown of 2007-8—a pointed reminder that no matter how clever, car companies are in the economic hands of people who do nothing but manipulate money. Whether these manipulators are are honest or fraudulent is pretty much irrelevant because when they screw up, they can take some brilliant projects down with them.
A direct link to the Youtube page. This thing runs 90 minutes but yes, I have watched the whole thing.
The 1980s introduced the era of "greenmail" and other forms of financial piracy. It wasn't just the resulting destruction of essential national wealth that was so disturbing, it was the bizarre rationalizations for why this destruction did not matter. Those of us who argued for example, the economic value of tight manufacturing integration, were hopelessly overmatched. We were up against the simple argument that it was better to move production from somewhere it cost $60 / hour to a location where labor could be had for $10 a day. Against that reality, we could only offer intangibles. Unfortunately, these "intangibles" included the values and practices that that allowed our great-grandparents to build in extremely hostile environments (like Minnesota—it was -22°F / -30°C yesterday morning) while turning them into warm and comfortable habitats with lighting, abundant food, transportation systems, educational institutes, medicine, and the other requirements of life.
The pioneers who ventured out onto this bleak landscape were not exactly building something from nothing. Around here, they started out with excellent soils, abundant water supplies, trees that yielded superb lumber, and a large supply of rocks—most especially limestone. Even so, there were no instructions on how to turn these resources into the farms and villages of settled life. The tools needed to build and the skills to operate them were especially scarce. And yet, the resulting artifacts of civilization were figured out—in many cases with unusual sophistication. All of this happened so recently that the evidence that some mighty builders had roamed this land can still be found by anyone remotely interested. My childhood and youth was spent marveling at these accomplishments—my favorite question seemed to be, "Now how do you suppose they built that?"
What fascinated me most was the realization that almost everything I could see and touch had been created by people who had no "qualifications" to build them. There were no schools or books that taught aeronautical engineering to the Wright brothers or Glenn Curtiss, no instructions to guide Ford into making automobiles or Firestone into tires. These folks were self-taught simply because there were no other teachers available. The greatest inventions of human history were brought to us by unqualified amateurs. Because this was so nearly miraculous, the practices and work habits that allowed the utterly "unqualified" to pull off feats that most observes still consider magic became extremely important. These were the factors of production that the financial pirates so happily destroyed in their get-rich-quick schemes of the 1980s.
The act of producing electric cars in a world designed to produce internal-combustion vehicles powered by liquid fossil fuels is similar to the acts of pioneering and invention practiced by the those early industrial giants. The most charming proof of this now comes from Elon Musk who has recently discovered the same virtues of vertical integration that Henry Ford so massively demonstrated when he built his famous River Rouge factory in Dearborn Michigan. It turns out that many of the old ideas still work.
In theory, Institutional Inertia is completely understandable. Companies that have been in business for a few decades have developed a bunch of lovingly-held procedures and practices. When you find something that reliably works, you tend to stick with it and use it in other applications. After all, there usually are other matters that don't work so well that can use the institutional inventiveness. Because it is the collection of reliable methods that form the core of Producer Class success, it isn't at all surprising that such ventures become technologically conservative over time. Institutional Inertia grows out of the same impulse that produces excellent goods.
Unfortunately, sometimes Institutional Inertia just gets in the way. Today we learn some more about the reluctance of the German automobile industry to get serious about building electric cars. The list of institutional reasons are as long as your arm. At the head of the pack is the mostly-admirable trait of the serious manufacturers that they know best as in "Why should we involve our customers in design decisions—after all, they pay us to know more about cars than they do. If we make the best product we can, they will buy it." These are people who are corporately trained to ignore outside influences.
So even though the German government wants the auto giants to change their ways and have offered to assist the project, and the Chinese have threatened to seriously alter their biggest market, the biggies are still in a "mom, do I hafta" mode when it comes to electric cars. It doesn't have to be that way, of course. After all, all the Germans already excel at the hard parts of automaking. In fact, this is a main element of their Institutional Inertia. In a chart below, we discover that on average, 12, 770 Euros go into providing the internal combustion drivetrain of every car—all parts made unnecessary in an electric car. These are parts that form the soul of the corporate identity—if you ever get a chance, ask a Mercedes engineer about their engines and transmissions.
Elon Musk knows that the important part of an electric car isn't the engine and transmission, it's the batteries. That is why he is betting the ranch on his battery gigafactory in Nevada. But even though he is trying to produce 500 thousand cars a year, that number is still is tiny compared to the 80+ million internal combustion vehicles sold last year.
See also my report of DW's coverage of Germany and electric cars.
Tony noted a few posts back that we have not been especially enthusiastic about covering the election of 2016. To which I plead guilty.
One of the things that most impressed / saddened me about this Presidential election is how amazingly trivial and irrelevant these things are. The old saying that "if elections actually changed anything, they would be illegal" seemed especially appropriate this time around. My favorite subject is climate change. Ms. Clinton promised some scolding and few dimes tossed at the problem while Trump actually claims to believe this is all a hoax. Good Lord—What a terrible choice.
I find the fact that the Clintons and their gang of thieves managed to steal the party of those who sacrificed a LOT to make it the Party of the People—and then sold it to Wall Street—to be utterly depressing. My contempt for these crooks is absolutely total.
Trump probably did not really believe he was going to win. He had no party infrastructure or book of principles around which to organize. So we really have no idea what kind of government he will form. He has 4000 policy jobs to fill and it is highly unlikely that he even knows 4000 people that interested in politics. Some appointments look pretty damn awful. On the other hand, his appointment of Terry Branstad as ambassador to China looks inspired (Mike Mansfield or Walter Mondale as ambassadors to Japan, anyone?) It is probably good to wait and see what sort of government the man actually forms before passing judgement.
The Democratic Party I once knew was a party of ideas. Now we see that the party elites—the same people who managed to blow an easily winnable election—are now advising that we become a party of disruption and civil disobedience. Well screw that! We should be getting up every morning thinking about the agenda we would advance if we were in power. And if our ideas aren't a whole lot better than neoliberalism and neocolonialism, we should shut up and work hard until they are!
One of the most disfiguring and crippling faults of modern American political economy is the result of American Christianity having been corrupted by prosperity generally and specific business interests in particular. Put simply: most so-called Christian denominations in the United States have turned their backs on the social gospel, and go to great lengths to avoid discomfiting queries into members' livelihoods as usurers, speculators, money exchangers, and other economic predators. It has gotten so bad, I dislike using the words "Christian" to refer to these people, and use "christianist" instead.
The most disturbing example of this is House Speaker Paul Ryan's devotion to the cruel economic thinking of Ayn Rand, which actually once caused Ryan to literally flee a young Catholic trying to give him a Bible while exhorting Ryan to pay more attention to the Gospel of Luke. Ryan claims he is a Catholic, so I harbor a fervent wish that the Pope will send him a message or two trying to instruct Ryan in the ways of actual Christian economic policies. And then threaten to excommunicate Ryan if Ryan persists in trying to shred what remains of the USA safety net in the forms of Social Security and Medicare.
Whatever legislation Ryan and Republicans try to pass, I hope Democrats in Congress try to tack on amendments requiring serious estimates of how many people will die as a result, and creating some means of imposing criminal liability on the authors and proponents of the legislation. After all, some of the Republicans' favorite mantra is that "you have to assume responsibility for your actions," and "there must be consequences."
I want to point out another dimension to the problem posed by the way Ryan and Republicans think. We have reached a point in human history where economic scarcity is not really a problem. As early as the 1920s, Thorstein Veblen pointed out that businessmen regularly sabotage and limit industrial production to create artificial scarcity and maintain price and profit levels. Any standard economics textbook today defines economics as society deciding how to allocate scarce resources. So standard economics starts off on a wrong foot from the get go.
But our technology today allows us to produce everything we need to support and sustain human life with a fifth or less of our workforce. Now, further advances in robotics and automation are estimated to be displacing another half of the already employed workforce over the next couple decades. What are we going to do with all those unemployed and marginally employed people? I don't see how the beliefs of Paul Ryan and today's Republicans help us to even begin to address this problem.
And there are problems on the Democratic side, also. Big problems. But that's a post for another today. I will leave you with this link, if you want to read about how what Democrats think cripples them also: Poverty Doesn't Need Technology. It Needs Politics.
Jon and I don't have much to write about the election of Trump. (Though, I will pass on what I think is one of the funnier slaps at the President-elect: "Der Furor.") Basically, both Jon and I were disgusted and demoralized that the Democratic Party nominated Hillary Clinton, despite the clear evidence that she was a thorough-going neo-liberal in economic policies, and a closet neo-conservative in foreign and military policies. (Leading neo-conservatives, such as Robert Kagan, even came out openly endorsing Clinton rather than their party's nominee.)
Unlike Jon and I, Ian Welsh has been putting up a stream of excellent posts since the election. Welsh was one of the few voices on the left before the election trying to warn people to take Trump seriously. Unfortunately, a lot of people were so unhinged that they mistook Welsh's warnings about Trump, as Welsh actually supporting Trump. I hope this is not symptomatic of how the left and the Democratic Party are going to respond to the Trump regime over the coming years, but it is a slight hope without much real basis other than wishful thinking. So far, it seems that most of those who got steamrolled by Trump are going to cling to their ineffective Marxism, or identity politics, or deconstructionism, or whatever.
The economists from UMKC are on a tear. As well they should be. They have been beavering away in almost total obscurity keeping the light of Institutionalism alive. It's kind of a lonely pursuit but it has one overwhelming advantage—you are correct so much more often than the convention-wisdom economists (who are almost always wrong.) And the folks who got it so disasterously wrong in 2008 haven't altered their worldviews one iota so they are still disasterously wrong.
Today, we see Bill Black give Paul Krugman a royal smackdown. Krugman has a lot of fans so taking him on entails some risk. But the fact remains that while Krugman is easily the most enlightened economist who is allowed to write for the New York Times, he is a thoroughly conventional thinker. And in his recent role as defender of Clintonism, he was forced to sound even more like a shill for Wall Street than normal. So Black is facing a high hanging curve ball here because Institutionalists live to take on anyone willing to embarrass themselves by spouting the neoliberal idiocies.
Even so, I am pretty sure that folks like Black and Hudson are NOT getting ahead of themselves. The neoliberals are shameless. They do not change their POV just because they are wrong. So I must assume that most of the time, the heterodox economists at UMKC must content themselves with celebrating their small victories at their small parties.
What is our system of government supposed to be? A republic. But a
republic is so ill defined that even John Adams famously wrote "the word republic, as it is used, may signify anything, everything, or nothing."
According to historian Gordon Wood,
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…. 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. [1]
Just as important: are there
principles and policies of political economy that are supposed to
distinguish a republic from other forms of government: monarchies,
oligarchies, plutocracies, dictatorships, etc.?
Since it became
clear that President Obama was unwilling to directly confront the power
of Wall Street, I have read deeply trying to answer these questions for
myself.
Contrary to what many on the left believe, the US
Constitution is NOT solely designed to protect the rich. Our system of
government definitely has been twisted to that end, but I do not believe
that was the intent of Hamilton, the one Founder most responsible for laying the foundation of the USA economy.
(And remember, Washington used Treasury Secretary Hamilton basically as
a prime minister, and agreed with or acceded to literally all of
Hamilton’s economic beliefs and policies. This was in no small part a
function of their shared experience at the pinnacle of American military
command during the Revolutionary War, when they both identified
Britain’s major strategic advantage to be Britain’s ability to raise
funds and float debt through its financial system.)
Culturally,
the most important aspect of a republic is supposed to be equality,
especially economic equality. This is of course contrary to the view
that the government was set up solely to protect property and the
accumulation thereof. It was not – at least, not by Hamilton.
Economic
equality is basic to a republic because, the idea was, no person can be
fully independent and be a good citizen if their livelihood depends to
some extent or other on another person’s largess, benevolence, or
tolerance. This was the basis of the fight between the Hamiltonians and
the Jeffersonians. Jefferson believed that only farmers who owned their
own land were independent enough to honestly exercise the duties of
citizenship. Jefferson wanted to delay the advent of industrialization
and subservient factory labor as long as possible. This is why Jefferson
acceded to the Louisiana Purchase, which he would otherwise have
opposed on the grounds that the federal government has no express power
to acquire so vast territory. [2] With the Louisiana Purchase, yeoman
squeezed out of the established eastern seaboard would be able to cross
the mountains, and buy, steal, or somehow take the land of the native
Americans and set themselves up as independent farmers, thus extending
in both space and time Jefferson’s ideal agrarian republic.
Hamilton,
by contrast, understood that the economy could not be frozen in time
and remain entirely agrarian. Industrialization HAD to not only proceed,
but be encouraged [3], for the USA to have any chance of resisting the
intrigues and hostility of the European powers – which remained
committed to eradicating the American experiment in self-government
until the US Civil War. (France and Spain landed troops in Mexico and
Caribbean at the beginning of the war; the Mexican republic was eliminated
and Maximilian, younger brother of Austrian emperor Francis Joseph I,
was installed as puppet emperor. The British government of Lord
Palmerston was preparing to land troops in Canada in 1862, but was
deterred by the pro-USA street fighting in London and elsewhere which
was led by the British allies of Italian revolutionary Giuseppe Garibaldi.)
Hamilton’s
great insight was that economic development depended entirely on
improving the productive powers of labor. This meant the development of
science and technology, and the spread of machinery to replace muscle
power, both animal and human. The correct view of Hamilton must be
precise: it was not that Hamilton sought to encourage and protect
wealth, but to encourage and protect the CREATION of wealth. (Read
Section II, Subsection 2, “As to an extension of the use of
Machinery...” in Hamilton’s December 1791 Report to Congress on the Subject of Manufactures, if you want something to read today.)
This
is where Marxist analysis fails catastrophically. Yes, much of economic
history is that of elites accumulating wealth through exploitation,
fraud, and violence. BUT: how was that wealth which is stolen created in
the first place? Thorstein Veblen, and his discussions of industrial
organization versus business organization, are far more useful in
understanding the COMPLETE economic story, not just the exploitation
side of it. I believe that once you understand this, you can understand
why Elon Musk is much more useful to society than Peter Thiel. Musk and
Thiel are both rich: should we therefore oppose and denigrate both
because they are rich, and we dislike our system of government which has
been mutated, diminished, and twisted so that it serves and protects
the rich almost exclusively? No. I admire Musk because he has used his
PayPal lode to create new wealth (which takes the corporate forms of
Tesla, SpaceX, and Solar City), while Thiel has used his PayPal lode to
fund libertarian ideas which are fundamentally hostile to what America
is supposed to be. In Veblen’s analysis, Musk is an industrialist, while
Thiel is merely a businessman.
In the nineteenth century, it
was generally understood that the system established by Hamilton was in
opposition to the “classical economics” of Adam Smith, David Ricardo,
Thomas Malthus, and the other apologists for the death and destruction wrought on entire countries
by the British East India Co. and the British empire. In the 1820s,
Henry Clay coined the term “American system” to distinguish it from the
British system. Michael Hudson has pointed out that in addition to these
two systems of political economy, a third was developed in the
nineteenth century: Marxism. [4]
It is easy to be confused by
American history, because at the same time that the American System was
being built and practiced, the British system was competing with it for
control of the domestic economy and polity. To the extent that people
today mistakenly believe that the American economy was founded on the
ideas of Adam Smith (it most emphatically was not: Hamilton explicitly rejected the ideas of Smith)
the British system is winning. Michael Hudson has written at least two
excellent overviews of this fight within the USA between the American
and British systems. [5] For now, the simplified version is that the
British system was dominant in the slave South, and fought for free
trade in opposition to the American System’s protective tariffs.
After
the Civil War, American railroads and industries were reorganized a
number of times, placing them under ever greater control by bankers and
financiers located in Boston, New York, and other large cities. This period of economic consolidation is typified by the creation of the "trusts.” In response, a number of populist political movements and parties arose in opposition:
the Greenback Party, the Grange, the Farmers Alliances, the People’s
Party, the Non-Partisan League, and the Democratic Farmer Labor Party of
Minnesota. Note that the policies they fought for in the half century
after the Civil War became the economic basis of Franklin Roosevelt’s
New Deal. the Greenback Party, the Grange, the Farmers Alliances, the
People’s Party, the Non-Partisan League, and the Democratic Farmer Labor
Party of Minnesota. Because those were all populist—and the policies
they fought for in the half century after the Civil War became the
economic basis of Franklin Roosevelt’s New Deal.
Here’s a
4-minute video on the Greenback Party’s 1876 presidential candidate
Peter Cooper (who founded Cooper Union in New York City), and the
policies of the Greenbackers. Along the lines of the issue posed by Musk
versus Thiel, note that Cooper was among the richest men in USA.
Micheal Hudson is on a roll. In this video, he explains that mainstream economics is not nearly so sub-moronic as it looks. Rather these folks are doing their fine work to provide an intellectual gloss to activities that actually harm the economy by claiming that the pirates are really earning their crazy paychecks. Economics once called these financial extractions "unearned income." (I remember those lectures...sigh) He also does a fine job of explaining what happens to any economist who dares challenge the dominant narrative.
Published on Nov 2, 2016
With every major financial recovery since the second World War beginning in a place of greater debt than the one before it, how could we not have foreseen the financial crisis of 2008? In this episode of Meet the Renegades, economics professor and author, Michael Hudson argues we did. How could an economy that created so much debt also save the banks rather than the economy itself, following the 2008 financial crisis? Michael discusses the phenomenon of debt inflation and how the economic curriculum should change. "If you're teaching economics, you should begin with the relationship between finance and the economy, between the build up of debt and the ability to pay." Michael discusses the 'Great Moderation', a common misrepresentation of a healthy economy in which job productivity was increasing, labor complacency was at an all-time low was a complete myth. Michael argues that 'traumatized' workers were too in debt to fight for better working conditions leading up to the 2008 financial crisis and how this reflects neo-classical ideas. Michael offers solutions - urging the importance of writing down the debt and keeping basic services in the public sector, ridding the economy of financial tumors through a proper tax policy based upon the this public sector model.
Here Ms. Brown explains how Trump, if he actually knew the history of monetary practice, could make good on his promise to rebuild the nation's infrastructure. In addition, he gets to appoint at least five new Fed Governors so all of this is well within the realm of the possible. The only thing stopping Trump from becoming the greatest builder in USA history is that he doesn't seem to have a clue about this history. He should do some homework. Hiring Ms. Brown to explain this to him would also work.
Slovenian philosopher Slavoj Žižek has taken considerable thought, time, and energy to try to understand the craziness we called an election. The following clip is truly remarkable. I cannot recommend it more highly. It runs about 20 minutes.
This is followed by St. Clair's trenchant observations on the incompetence and hubris it required for the Democrats to lose to a 70-year old reality-TV star with enough scandalous baggage to sink a container ship. Of course, it can be argued that the Democrats have been losing their way since Jimmy Carter deregulated the airline industry or appointed Paul (21%-prime) Volcker to head the Federal Reserve in the 1970s. Hillary Clinton is just the logical conclusion of this crazed and twisted journey—a peak idiot, if you please.
I probably won't write much more about this election. I have spent entirely too much of my life trying to help the Democratic Party make better and more informed choices. Obviously, I have not influenced much as Hillary Clinton represents almost everything I believe foolish, absurd, and criminal. I hold the somewhat naive opinion that the purpose of government is to organize the necessary tasks that are too difficult, expensive, and complex for individuals to accomplish on their own. Ms. Clinton and her posse apparently believe the purpose of government is to provide them with cushy ego-satisfying jobs and beautiful offices in Washington D.C. There seem to be quite a few of us who utterly despise that type. But quite honestly, I didn't think there were enough of Hillary's victims to pull themselves off the mat in a final and probably futile gesture of keeping her out of the White House. Worse, the guy who will be heading for 1600 Pennsylvania Ave is not exactly Mr. Deep either.
So back to refining strategies for building a sustainable future. If I did not have that problem to think about, I would have most certainly lost the will to live by now. Building is the only truly satisfying activity of my life and thinking about the world that could be created is enough to help me ignore the industrial-strength idiocy that we have just witnessed.
One of the more baleful effects of "American Exceptionalism" it that even some pretty good people really could not care less what happens to the "collateral damage" of the Empire. They don't care because they don't know. For example, because I have a strong historical interest in what happened to USSR as the result of the German invasion in 1941, I have read many accounts of the incredibly fierce fighting that happened in the Donbass. If it weren't for the rich mineral deposits of the region, the area would probably still be depopulated because so many were killed. In the annals of human struggle, there are few that top the struggles of Donbass. It was so devastated that many monuments to the defenders weren't built until the 1960s.
I am 67 years old and have met exactly no one who has ever expressed interest in this story. So when the people of Donbass had to suffer yet one more effort at ethic cleansing, this time at the hands of home-grown Nazis who happened to have power as the result of a USA-sponsored and organized coup in the Ukraine, no one I knew had any idea of the magnitude of the tragedy. Because Victoria Nuland, one of Hillary Clinton's favorites, had her fingerprints all over the coup, there is an understandable outbreak of joy in the Donbass over the election of Donald Trump (see below.) For many, there is now a better possibility that people of the east Ukraine will be able to watch their children grow up. No small matter, that.
Not everyone is as thrilled as the people of Donbass over the election of Trump. Personally, I will be happy if he is a marginal improvement over Reagan or the Shrub and do not expect even that. But a victory by Clinton would probably have triggered clinical depression. The idea that someone so corrupt could have seized the political party my parents and grandparents struggled to build, and sold it to Wall Street crooks, was a reality I could not bear. So even though my expectations for a Trump administration are essentially zero, I am willing to give him a chance because a President Hillary would have been a predictable disaster.
There are three stories to tell about it, and they’re
stacked on top of each other, tottering, each bigger than the last and
relying on the one below it to make sense. The first story: the Cubs
took a 6-3 lead into the eighth inning of Game 7 of the World Series,
and Aroldis Chapman blew it. Then he won the game.
That's the beginning of the article by Jonathan Bernhardt of the London Guardian, which I consider far and away the best article on the Chicago Cubs winning the World Series of USA major league baseball after 108 years. It is the only article of the many I've read which captures the cultural iconography of the Chicago Cubs and their century-long absence from the greatest achievement of professional baseball.
Cubs third baseman Kris Bryant smiles while fielding the ball for the final out of the World Series.
This was not supposed to happen: "The Cubs are lovable losers" had become the most powerful cultural myth in American sports, The title of Bernhardt's article is the perfect summary: How the Chicago Cubs faced down history and killed a century-old curse. Yet, Bernhardt does not really discuss how the Cubs did it. He does not discuss how the Ricketts, heirs of the Ameritrade fortune, bought the Cubs from Sam Zell and the Tribune Co., who had treated the team not as a franchise in professional sports, but as an entry on the balance sheet of a corporate conglomerate. He does not discuss how co-owner and Cubs president Tom Ricketts — as diehard a Cubs fan as any: he met his wife in the bleachers at Wrigley Field while he was a student at the University of Chicago — snatched Theo Epstein from the Boston Red Sox and made him President of Baseball Operations for a repeat performance of curse-crushing pennant winning.
The story of Theo Epstein coming to Chicago to transform the Cubs is an obvious lesson. The people at the top make a huge difference. This is a lesson progressives and Democrats desperately need to learn. First, the reality must be faced that President Obama squandered an epic opportunity to transform the American economy by failing to destroy Wall Street, which is a net drain on the rest of the economy, and the major reason why the United States continues to suffer poor economic performance for the bottom ninety percent of Americans.
Remember the outpouring of public opposition to the Wall Street bailout in 2007,
with calls to Congress running a reported 100 to one against? Rather than use this tidal wave of public sentiment to impose structural changes on the financial system and begin eliminating, or at least limiting, its usury, speculation, and rent-seeking, Obama listened to his golf buddy, Robert Wolf of UBS (former Union Bank of Switzerland), and decided the top priority was to save Wall Street from the consequences of its own unbridled greed. Obama even publicly declared that James Dimon of Morgan Chase and Lloyd
Blankfein of Goldman Sachs were “savvy businessmen.”
Obama did have the power of his bully pulpit to force changes on Wall
Street: Richard Wagoner was forced out as chairman of General Motors
simply because of Obama’s disapproval. But that is the lowly auto industry, not the superstar and obscenely rich banking and financial sector. Obama chose not to apply
similar pressure to any executives on Wall Street. Ron Suskind does an
excellent job of recounting and contrasting these two different
approaches in his 2011
book, Confidence Men: Wall Street, Washington and the Education of a President.
By contrast, Epstein was given a mandate to build a championship baseball team, and he threw himself into the task with manic fervor. So, two lessons here:
Lesson 1: The people at the top make a huge difference.
Lesson 2: When you are given a mandate, use it. Ruthlessly.
While writing his new book Listen Liberal, Thomas Frank was asked how he would approach the subject of what went wrong with the Democratic Party that led to the nomination of an unrepentant Goldwater Girl. The question was usually some variation of "where do you even start?" Frank decided to start with the soul-searching following the 1968 defeat of Hubert Humphrey. As someone who remembers the political craziness of 1968 like it was yesterday, I think Frank chose an excellent starting point.
My take on the matter is that the Democrats had seriously lost their way by 1968 because they could not let go of their crazy notion that the Vietnam War was a good idea. Opposing a war, no matter how insane, is extremely difficult because those conflicts tend to rope in all sorts of primitive impulses associated with the warlike animus. And when after the Tet Offensive it became quite obvious that a WWII-style victory was clearly not in the cards, USA started waging a war that was a constant escalation in sheer brutality. Not only did this destroy whatever was left of anything resembling a moral center, it would also destroy the main elements of the economy, along with anything that smacked of a cultural impulse. By 1974, the most innovative period of musical history had degenerated to disco, the economy was experiencing scary inflation, the USA had become a net importer of oil and had been successfully boycotted by the oil-producing nations.
Because I was attending a major land-grant multi-university from 1967-74, my view of those confusing times centered on the upheaval in education. The most noticeable effect was the destruction of scholarly standards as many professors refused to fail any young man who would then be eligible for the draft. Unfortunately, that would be extent of their moral outrage against a system that would bomb defenseless peasants with B-52s flown from Guam and murder village teachers who were a threat because they had educations. What this meant in practice was our teachers went to great lengths to avoid discussing the war but freely acknowledged that there were serious structural problems with a society that would choose to wage such a war.
Perhaps the best example for me happened in a Political Science class being taught by the first Jewish man to have ever been elected mayor of Minneapolis. Big-city mayors in those days did not have a reputation for idealism, but Arthur Naftalinwas one. On the list of assigned reading was the crazy paean to the counter-culture The Greening of Americawritten by a Yale law professor named Charles Reich. Follow the links if you are remotely interested but essentially this book argued that the hippies and the counterculture were the new wave of enlightenment. Sex drugs, and rock and roll would prove that the USA had more to offer than war crimes.
Sadly, this goofy utopianism would come to define a generation. Lest anyone doubt that a generation was taught that hedonism was the solution to serious matters, think back to the big march to demand an end to climate change held in New York September 21 2014. The climate certainly wasn't helped by 300,000 CO2 producers traveling to the big event but the signs were pretty, the speeches were dripping with moral outrage, and so the organizers declared it a huge success.
Meanwhile, politics completely lost its focus. The hard work of raising living standards for the people who had to do the community's necessary work now took a back seat to "cultural issues." Also lost in the shuffle was the need to care for and replace the necessary infrastructure, or schools that taught that for many important subjects, there often is a right answer and its not "fascist" to expect people to learn it, etc! The most pernicious lie of the era was that if the moneychangers prospered, the rest of the society would as well. This monster falsehood will lead to a calamity of almost unimaginable proportions but because it is so embedded in the culture, the teachers of economics will keep misleading their students. Charles Reich would no doubt approve so long as he could be reassured that hedge fund managers were still snorting toot off some hooker's ass.
The following essay by Matt Stoller is an excellent tale of how the frivolous people took over the Democratic Party from those who actually understood how the real economy worked. I am pretty sure he is mostly correct in his account. It's pretty long but certainly worth reading.
Just the other day, I was discussing the latest Wikileaks dump with a fellow fan of Mr. Assange. He was marveling at the persistence of someone who knows damn well that he is truly pissing off the woman who could be the next USA president. Actually, I can sort of understand this sort of behavior having been raised on the stories of men who were willing to risk some painful deaths to do something as civilized as wanting to translate the Bible. Martin Luther got away with it—William Tyndale was burned. So I mostly get Assange and why he gets such a rush from spreading uncomfortable truths.
What I find so fascinating is that Assange has demonstrated a point about how the Producer Classes survive in a world where there are thousands who want to rip them off and otherwise make their lives miserable. History is mostly about the various schemes to get someone else to work for free or as close as posible. These include slavery, serfdom, usury and loansharking, and the latest ugliness—"free trade." Out of desperation, the Producers have tried slave revolts, strikes, political or religious movements in an attempt to retain at least some fraction of the value their work brings to the social order. Most of these have been doomed from the get-go. But there has been one absolutely fool-proof method for Producers to change the equation—invent a future that empowers them.
There have been a lot of very interesting characters who have lent a hand in the creation of the Internet. Some are inspirational—some loathsome. But no matter how you financed / ripped it off, the actual creation of the Internet was a Producer Class project and it has obviously served the needs of it creators. And the release of the Podesta emails has provided Exhibit A for how this works.
With the complexity that came with industrialization, the question of who held power and why they were important became a subset of social scholarship. These inquiries were mostly speculative because discovering what was said in private meetings could never be discovered. Nevertheless, some bright guys tried to figure it out—the best example is C. Wright Mills' The Power Elite published in 1956. But thanks to Wikileaks and all the inventions that produced the Internet, we don't have to guess what the elites are saying to each other while plotting their nefarious schemes, we can read the actual conversations. We will probably still have elites, but their ability to scheme in the dark has taken a major hit. And since their only real source of power is the ability to get people to believe their lies, the Producers may have finally figured out a way to put this gang of destructive thieves out of business.
Hey, I can hope. Considering what a wretched affair this election has become, I am searching for a little light in the darkness. This article and interview features Thomas Frank marveling how much insight has been provided by the Podesta emails. I think he would probably agree that this information will lead to nothing less than the re-invention of Political Science. Good! It could stand re-inventing.
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.
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.
Last Friday I went out to the Veblen farm to soak up some atmosphere to enhance the joy of reading Hudson's brilliant essay. The harvest is largely done. The trees have mostly lost their leaves. We haven't had a hard freeze yet but that is certainly coming soon.
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.
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.
And so in the all-so-enlightened state of Washington, some folks have been agitating for carbon taxes because they have convinced themselves that to pass carbon taxes is to be on the bleeding edge of carbon awareness. And because this is mostly a lefty project, it has to pass all sorts of hurdles of political correctness—which is really a bad idea in the case of climate change because the problem is mostly a physics / engineering matter. Energy matters are not especially enlightened by pre-industrial ideologies.
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.
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.
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.
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.
