It’s Their World, We just Live In It

Posted on February 11, 2012 by camelotkidd

The Federal Government and 49 States have agreed to a tentative settlement with the five largest banks for their robo-signing practices. While we still don’t know all the details, one thing has become clear–we officially have a bifurcated rule of law. The 5 big banks that are part of this settlement have their own rule of law, and the rest of us a much different one. Can you imagine if you stole a shipment of TV’s, but rather that getting arrested and going to jail, you were able to pay a small fee, and go on about your business?

If you want a deeper analysis of why this settlement sucks, see Yves Smith at Naked Capitalism.

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Izzy

Posted on February 9, 2012 by camelotkidd

If there is a north star for this blog, it has to be the iconoclastic investigative reporter, I.F. (Izzy) Stone, with his independent newsletter–I.F. Stone’s Weekly.

Using this weekly newsletter, started in 1953,  Stone campaigned against the Cold War, McCarthyism, racial discrimination, and the Vietnam War. The weekly content contained essays, articles, and other peoples stories–kind of like a blog. Stone also based his reporting on close reading of obscure government documents available in the public domain, and eschewed insider political reporting.

“I made no claim to inside stuff. I tried to give information which could be documented, so the reader could check it out himself…Reporters tend to be absorbed by the bureaucracies they cover; they take on the habits, attitudes, and even accents of the military or diplomatic corps. Should a reporter resist the pressure, there are many ways to get rid of him…But a reporter covering the whole capital on his own–particularly if he is his own employer–is immune from these pressures.”

Like today’s political bloggers, writing contra “conventional wisdom,” Stone wrote in a critical environment that required his stories meet an “extremely high burden of proof” to be considered credible.

And contrary to todays timid news, Stone passionately made the case that, if accurate in their reporting, journalist didn’t have to be neutral. “A newspaperman ought to use his power on behalf of those getting the dirty end of the deal.”

Stone, of course, had no illusions about the powers he faced. “If you want to know about governments, all you have to know is two words–Governments Lie.”

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March to War

Posted on February 7, 2012 by camelotkidd

As we march towards war with Iran, with one alarming news story after another, it is useful to turn our attention to some recent history.

Ten years ago the neo-cons stampeded the US into a disasterous war with Iraq, using a nonstop propaganda campaign. In August 2002, President Bush’s chief of staff, Andrew Card, made the connection of war to another product being sold explicit. “From a marketing point of view, you don’t introduce a new product in August.”

It is also useful to remember that some things are timeless.

Herman Goering, in a jailhouse interview at Nuremberg, stated an obvious truth on the ease of marshaling a populace for war.

“Naturally the common people don’t want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought along to do the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”

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Serfs Up

Posted on February 4, 2012 by camelotkidd

Friedrich von Hayek postulated, famously, that state planning and the welfare state would lead inexorably down a Road to Serfdom. However, things just didn’t work out the way he imagined.

It is darkly ironic that the political and economic policies Hayek advocated as an antidote to socialism have instead sent western liberal democracies careening down the route he warned against.

I’ve said this before in jest–that neoliberalism combined with neoconservatism is leading to neofeudalism. But watching our erstwhile leaders voluntary embrace of austerity to pay for the sins of the banksters is starting to convince me that maybe its not a joke.

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“Free Trade”

Posted on February 1, 2012 by camelotkidd

Been having a back and forth with a friend over the issue of off-shoring by US corporations. I recently sent him an article in Naked Capitalism about why Apple manufactures the I-Phone in China.

As to his arguments. He claims that China has a “comparative advantage” because of a concentration of resources there. (I assume he means a concentration of cheap labor) He says that we shouldn’t try to compete where we are at a disadvantage. And that it does no one any good, and wastes resources that could be used productivly, and we will lose. The answer is to do things for which we have a comparative advantage, and to educate our children better so that our advantages are in higher paying jobs.

The problem with this argument is that it is made with a flawed understanding of David Ricardo’s theory of comparative advantage; in which a country specializes in economic activities in which it performs best and trades for those goods that other countries do best. In my brother-in-laws defense, many pro-free trade economists make the same mistake in that they confuse comparative advantage with absolute advantage.

Ricardo, an early 19th century economist, based his theory of comparative advantage, as it relates to free trade, on two necessary conditions: 1) that a country’s capital seek comparative advantage at home and not seek absolute advantage abroad. 2) countries have different relative cost ratios of producing tradable goods.

Instead of seeking comparative advantage at home what we have is American corporations, who offshore their production for domestic US markets, using advanced technology and capital, chasing absolute advantage abroad by using super low cost labor in locations like China. And in Ricardo’s day, capital was captive and labor mobile, Today it is the reverse, with capital as internationally mobile as tradable goods, and knowledge based production functions having the same relative cost ratios regardless of the country of location.

The famous Ricardian conditions for free trade are not present in todays world.

Back before US firms began off-shoring production, American workers had nothing to fear from cheap labor abroad. Americans worked with superior capital, technology and business organization. But American multi-national corporations lobbied to close down their US plants and move to places with a vast overhang of cheap labor. This labor, that is equally productive but paid a fraction of the wage paid to US workers is a magnet for US capital and technology. The fact that these workers are obedient, regimented and subservient, working 12 hours a day, 6 days a week, doesn’t hurt either.

It is this replacement of US workforces by foreign workers that helps explains the extraordinary rise in CEO compensation and flow of most of the income and wealth gains to the few people at the top, leading to the type of income inequality that has become a topic in Republican debates and OWS protests. The reality is that, corporate America, with the support of the government, is using this resulting unemployment from off-shoring as “bludgeon” to drive down wages, destroy working conditions and force US workers to accept sweatshop conditions–like those in China.

Among mainstream pundits, there is generally no acknowledgment of the social costs of this off-shoring of American jobs. The poverty, foreclosure, homelessness, and hunger that are the result. Although this could be changing.

Historian, Francis Fukuyama, who wrote, The End of History, declaring that liberal free market capitalism had triumphed over communism, is having second thoughts. In a new essay in Foreign Affairs, the journal of the Council on Foreign Relations, he argues that some very troubling economic and social trends spell bad news for liberal democracies. Specifically, Fukuyama, says that global capitalism and free trade doctrine, combined with new technologies, along with the steady offshoring of American jobs are destroying the middle-class--the necessary foundation for democracy in advanced economies.

But many mainstream economists cannot recant their most beloved shibboleth. Free trade has become an unexamined article of faith. And now, they cannot admit that they base this faith on mistaking absolute advantage with comparative advantage. Of course, their faith just so happens to massively benefit the corporations that take advantage of “free trade.”

But, the US economy did not develop on the basis of free trade. Whatever the costs of protectionism, the costs did not prevent America’s economic rise. In fact every advanced economy used protectionism, in the form of tariffs to protect their domestic industries. If the US had practiced the sort of free trade orthodoxies now so prevalent, we would be advised to focus on our comparative advantages in cotton and beaver hides.

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Hoax

Posted on January 24, 2012 by camelotkidd

“They’re here.” Just like the evil spirits in the movie Poltergeist, our very own group of malevolent legislators is back to shock, terrorize and dismay with their antics up the hill at the State House.

Utah State Legislators are back for another session, and they have to be some of the dumbest, most ideological bunch of yahoos out there. Now, it’s true that there are lots of other dumb-ass yahoo state legislators in the US, but the Utah bunch brings their very own brand of right wing, tea party, religious, gun crazy kind of yahooism.

Case in point. During last years session, the Republican dominated Utah State Legislature passed a bill proclaiming global warming a hoax.

Not to be upstaged, Mother Nature this winter decided to to send Utah a little message of her own. Salt Lake City, dependent on snowpack for water, had the driest December on record.

Maybe reality really does have a “liberal bias.”

Still, there is definitely a method to their madness. Climate change threatens the world view of the right wing ideologues who run the Utah Legislature. Essentially, they see the idea of global warming as a communist plot to redistribute wealth, and limit the dirty fossil-fuel energy corporations that are their biggest supporters.

They are correct to view climate change as an epochal threat to modern neoliberal capitalism. To deal with the challenge of climate change we will have to curtail globalized free trade and live in a much more local manner. We will have to redistribute wealth from polluting countries to those affected. And we will have to radically curtail corporate power. All these things are anethema to Utah conservatives.

Even more threatening is the thought that governments would have to lead any response to climate change, taking power from the private sector and evoking the threat of communism that keeps Utah State legislators up at night. The reason that the threat of communism evokes such fear and loathing in Utah is related to the fact that he Utah State Legislature is made up primarily of  Mormons, or members of the Church of Jesus Christ of Latter Day Saints. Mormons have been fervent anti-communists since early cold-war days, with key leaders in the church leadership belonging to the John Birch Society. Even before, there was a deep antipathy towards labor movements in Utah. Who, the fuck, do you think killed Joe Hill?

Certainly, anti-communism is not unique to Utah. Anti-communism is a salient, unmentioned factor in local and national politics. Yet, Utah has a special blend of anti-communism that will be a topic for future posts.

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Looting

Posted on January 18, 2012 by camelotkidd

Now that the Republican candidates for president have accused front runner Mitt Romney of practicing “vulture capitalism,” I thought I would share a story.

I had a conversation with a client a couple years ago about what he did for a living. (Being a ski instructor means being around the 1 percent on a daily basis.) It turned out that he was an attorney in California who had worked with Mitt Romney. At that point I should have bit my tongue and shut the fuck up. But being stupid, I proceeded to tell him what I thought Mittens had been up to with his stint at Bain Capital–looting. As you might imagine, this did not go over well and we spent the rest of the lift ride in awkward silence.

Today the inter-tubes has a story by  historian Rick Perlstein explaining why Mittens grew up the way he did by comparing him to his father, George Romney, who also ran for president in 1968. The contrast between the father and son and the values they espouse epitomizes how our country has changed for the worse in my lifetime. From a place where we made things and gave Americans of average means an opportunity, to a neo-feudal looters paradise.

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Why Liberalism Sucks Part-2 The “Veal Pen”

Posted on January 14, 2012 by camelotkidd

Jane Hamsher, editor of FireDogLake, has coined the term “Veal Pen” to describe the process by which the Democratic Party disciplines liberals. “The White House controls its left flank and maintains discipline,” so that they can carry out a “neoliberal agenda”

Why would a Democratic Administration, that came into office promising “Hope and Change,” throw liberal supporters under the bus, and not value their help in implementing more liberal policies?

I have a provocative idea–use the propaganda model laid out in Manufacturing Consent, the groundbreaking book, written by Edward Herman and Noam Chomsky, to illustrate how the Democratic Party limits liberal policies.

The propaganda model, as propagated by Chomsky and Herman, lays out a structural critique of the inherent bias contained within the media. They describe the propaganda model as a way to focus on the “inequality of wealth and power and its effects on mass-media interests and choices. It traces the routes by which money and power are able to filter out the news fit to print, marginalize dissent, and allow the government and dominant private interests to get their message across to the public.”

The five components of their propaganda model, or filters, fall under the following headings: 1) the size, concentrated ownership, owner wealth, and profit orientation of the dominant mass media firms. 2) advertising as the primary income source of the mass media. 3) the reliance of the media on information provided by the government, business, and “experts” funded and approved by these primary sources and agents of power. 4) flak as a means of disciplining the media. 5) anti-communism as a national religion and control mechanism.”

This propaganda model has proven to be a powerful method of media analysis, but how does it apply to the Democratic Party and its influence on liberal or left policies in general?

Let’s substitute the Democratic Party for media, plug it into the propaganda model, and see what we discover.

The first filter is ownership. I wrestled with this one. I mean, who the fuck owns the Democratic Party? But then it hit me. It’s not the ownership per say. Similar to the way that the concentration in ownership of the media eliminates competition, the ownership by the Democrats of the so called “liberal” party in America blocks any other parties from forming that would truly represent the left in America.

The second filter is advertising. The media is largely funded by corporate advertising which imposes a severe limit on their reporting. For the Democratic Party the dominant funders of the party represent the advertisers, and under the Obama Administration that equals Wall Street. The need to raise a lot of money to be elected, ensures that there is a narrow range of policies that are acceptable. Wealthy donors fund Democratic candidates for office and if they are not happy with policies they can cut off funding and or fund other more conservative challengers. Why do you think the Blue Dogs exist?

The third filter is sourcing, or the sources of information that are perceived to be legitimate that the media can safely use within the time constraints imposed by commercials. Can you say–conventional wisdom? This idea of sourcing relates to which voices are given credence and which voices are muzzled. Within the Democratic Party the sources that are dominant are the neoliberal think tanks, such as the the Hamilton Group, the Third Way and the Brookings Institute, etc, that consistently advocate policies that benefit the wealthy and corporations. As for the voices that are muzzled, I’ll let Hamsher take that one “the Obama Administration is corralling big liberal DC interest groups,” making sure that they don’t advocate any policies that challenge their ability to protect Wall Street. “If you criticize the White House on financial issues your funding would dry up.”

The forth filter is “flak,” or what happens to you when you do advocate liberal domestic policies, or alternatives to empire and endless war. Like the media, the Democratic Party is susceptable to pressure from corporate donors, the Pentagon and other powerful government figures, in the form of media statements, e-mails, phone calls, and other modes of complaint or threat. The Obama Administration has shown its clear hostility to liberal policies, with advocacy groups that crossed him confined to the”Veal Pen.” Within the blogosphere there exists Pro-Democratic Party agents like Daily Kos, Booman, Balloon Juice and Move-On that use “flak” to deter any progressives straying from the party line. With Obama’s presidential campaign gearing up we are seeing more and more of this pressure to fall in line and support the President.

The final filter is that of anti-communism. Even though the Soviet Union went out of business and communism has ceased to be a world wide force does not mean that its utility as a tool to demonize has lessoned. As Chomsky and Herman note, “Communism as the ultimate evil has always been the specter haunting property owners, as it threatens the very root of their class position and superior status. This ideology helps mobilize the populace against an enemy, and because the concept is fuzzy it can be used against anybody advocating policies that threaten property interests.” Just like the media, the Democratic Party is under great pressure to demonstrate their antipathy to anything that smacks of communism, and this causes them to behave very much like Republicans with their foreign and domestic policies. The fuzziness Chomsky and Herman describe, helps explain the demonization of Occupy Wall Street as some sort of communist threat to the elite.

The practical effect of these five filters are the policies of the Democratic Party. If you’ve been paying attention the last three years you might recognize them. From not prosecuting criminal acts committed by the Bush Administration to healthcare reform, to HAMP, to their policy of coddling bankers, to the surge in Afghanistan, to the torture of prisoners in offshore gulags, to the signing of the National Defense Appropriation Act, to assassination of Americans, to drone strikes, the list goes on. I reserve special condemnation for President Obama using his bully pulpit to spout untrue, right wing bullshit to a nation generally made up of dullards.

This behavior by the present Obama Administration tracks historically. Since President Woodrow Wilson and the Red Scare, the Democratic Party has sought to be a bulwark against radicalism, socialism, and communism, essentially saying politically: this far and no further to the left. Since the fall of the Soviet Union the Democrats have moved ever more to the right, as if to prove Margaret Thatcher correct–“there is no alternative”–to neoliberal capitalism.

Yet the Democratic Party still maintains the fiction that they are the left in America. The Republicans play along with this kabuki by demonizing non-existent liberals and portraying the President as a wild eyed socialist.

And, no, I’m not advocating for Republicans, or Libertarians, or Ron Paul. But if you’re advocating for progressive policies you better damn well understand the present political reality.

I know, this is pretty far out stuff. The three people that read my blog probably think I’ve got the tin foil hat on just a little too tight.

But being provocative and challenging conventional wisdom is the whole point of this blog. Right?

Stay tuned in for future episodes when we discuss how little Timmy Geithner is really an alien rather than just a sycophantic suck up.

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Springtime

Posted on January 11, 2012 by camelotkidd

The spousal unit and I watched the Producers last night. It was very funny, but wanted to update their catchy little musical number to comport to our modern milieu.

Springtime for Merkel and Germany.

Austerity for Greece and France.

Sing it with me.

I mean, who needs the Luftwaffe when you have the ECB.

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How Liberalism Came to Suck

Posted on January 7, 2012 by camelotkidd

I set out to write a very short post on the fascinating conversations going through the inter-tubes about the support on the left for Ron Paul.

While this support may be due to his opposition to endless war, torture, assassination of American citizens, and bank bailouts, etc., it has become increasingly clear that the fracas is not really about Ron Paul at all, but about liberalism, and why it came to suck.

Of course, this being no easy matter to unpack–goodbye short post, and hello long linky one.

Matt Stoller got it all going with his argument that support for Ron Paul exposes deep contradictions in American liberalism. According to Matt, liberals have an affinity for centralized war financing, and links the Democratic Party with support for war, empire, and banking.

Of course, this didn’t go over well at the more mainstream Democratic outfits, and so we got David at Digby’s Hullabaloo, calling bullshit.

Noted political scientist, Corey Robin, says the debate over Paul reveals what’s not being said on the left in its discussion of these grave political issues.

Glen Greenwald, the Constitutional lawyer and noted Bush critic argues that while it’s true that no politician on the left is making these critiques, more importantly, that these policies opposed by Paul are the priorities of the Democratic standard bearer–President Obama.

All this raises a larger issue, one that I have been wrestling with since I became politically aware. What the hell happened to American liberalism and how did we get such a shitty Democratic Party?

Historically one can argue that American liberalism foundered because the New Deal coalition was made up, as it were, of disparate partners with different goals and expectations, and was always destined to fail. Perhaps the crack up of the New Deal coalition was caused by LBJ extending civil rights to African-Americans, as Rick Pearlstein posits in his wonderful Nixonland. Perhaps it was the failures of Keynesian economics, revealed by 70’s stagflation. Or perhaps it was the demise of communism and the threat of an alternative to capitalism.

I favor a more trenchant analysis: That the liberalism FDR enacted was a trade off between “taming capitalism and taming the radical attacks on capitalism.” Rather than a “disguised socialist attack on the free market,” as his detractors allege, President Roosevelt saved capitalism with his reforms after it almost destroyed itself. Also, with the Great Depression raging, he was prodded into these incremental reforms by the threat of worker revolt, communism, and policies occurring at the state level–see Huey Long. Similar to the vitriol President Obama received from the bankers after bailing out the “to big to fail banks,” FDR was loathed by those he saved. His enemies even tried to stage a coup and depose him.

Here we are now, with American liberalism represented by the Democratic Party and President Obama. His critics like to label him a Muslim, Socialist, or Kenyan Communist, but me, I’m not so sure.

Like “Glennzilla,” I can see that Ron Paul’s stances on foreign policy, war, drugs, and the Federal Reserve have forced liberals to confront some uncomfortable truths. And while there is no one on the left raising these issues, more ominously, on numerous vital issues President Obama is just as bad or worse than the Republicans.

Look, Republicans are dicks, I get it. They have fully embraced endless war, torture, tax breaks for the wealthy and corporation with savage austerity for everyone else.

There is a push now in American politics for a third party. I would be happy to have a real second party. What we need is an alternative that better represents the rest of the American people, not a Democratic Party whose mantra seems to be “Vote for us because were slightly less dick-like!” Especially repellent is their claim that they don’t want to do these same evil things as conservatives but they have no choice.

These are amazingly complicated topics that I will revisit. Definitely follow the links.

And while I don’t support Ron Paul, I’m glad he is raising these issues, and I hope this causes more debate among the left on how to go forward in these perilous times.

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