Rock Stars

Posted on March 3, 2012 by camelotkidd

I believe that there is an alternative to finance driven capitalism as the only way to organize an economy. This system, let’s call it neoliberalism, insists on a market culture as the master design for all human affairs. Profit making and market freedoms are viewed as the essence of democracy. Consumerism is citizenship and capital is sacrosanct. Banks are allowed to monopolize the money supply, using these funds to speculate rather than financing the real economy, then when their bets go bad, taking billions in bailouts, while insisting on savage austerity for the citizens of western democracies as the way to pay for it.

From Greece, to Spain, to Romania, ordinary people are reacting with dismay as the results of this experiment in mass suffering play out. They are required to pay for the bailouts, thereby rectifing bankers sins, and, also asked to sacrafice pay and benefits. Among them there is a real hunger for an alternative to neoliberalism.

There is a school of economic theory, based out of the University of Missouri at Kansas City, UMKC, entitled Modern Monetary Theory, or MMT, that articulates an alternative to this banker feudalism. One of the prominent economists who advocates MMT is Michael Hudson. Hudson, with his colleges from UMKC, was recently in Italy, to lecture on MMT, where he and his colleges were greeted like rock stars by Italian citizens who packed a stadium to hear this alternative articulated.

Essentially, MMT posits that a country with a sovereign currency. like the United States, need not borrow from banks, or even sell bonds, to finance their spending. All money is created with the click of a mouse, whether by commercial banks or the Treasury. Allowing commercial to create money rather that a central bank is a political decision not an economic one.

And what is the solution? According to Dr. Hudson. “It is to have a central bank that does what central banks were founded to do: monetize government budget deficits so as to spend money into the economy, in a way best intended to promote economic growth and full employment.”

But that would hurt the bankers little feelings, and cause David Brooks and Megan McArdle to rend their garments. And, more saliently, it would take away a huge chunk of campaign cash from both Republicans and Democrats.

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Cult Studies

Posted on February 27, 2012 by camelotkidd

There is a new book entitled: Ayn Rand Nation: The Hidden Struggle for America’s Soul, by Wall Street reporter Gary Weiss, coming out this week. Ayn Rand created a cult of followers, including former Federal Reserve Chairman Alan Greenspan, around a philosophy of selfishness that she labeled–Objectivism. As luck would have it my brother has written an essay attempting to make sense of why Ayn Rand and her philosophy of selfishness remain so relevant today.

Take it away Wart.

I recently picked up a promotional copy of Ayn Rand excerpts from a box outside my library.  While I enjoyed the Fountainhead, I only knew of “Objectivist” philosophy secondhand.  Opening to the chapter entitled “Man’s Rights” from the Virtue of Selfishness, I read the following:

If one wishes to advocate a free society –that is, capitalism—one must realize that its indispensable foundation is the principle of individual rights. If one wishes to uphold individual rights, one must realize that capitalism is the only system that can uphold and protect them.  And if one wishes to gauge the relationship of Freedom to the goals of today’s intellectuals, one may gauge it by the fact that the concept of individual rights is evaded, distorted, perverted and seldom discussed, most conspicuously by the so-called “conservatives.”

I finished the chapter, delighted by how easy it was to spot the logical errors and the conceptual fudges.  Even so, I confess I admired her style, sharing as a I do her weakness for rhetorical finesse over inductive proof.

And as I meditated on her life experience, the sincerity of her belief and the reaction formation of her politics made sense.  Moreover, I found myself awed by her self-discipline and force of personality.  She’s not the first—or only one–to have felt these things, though she expressed herself rather better than most.   She’s entitled to prefer certainty and absolute distinctions, whatever I happen to think.

What is confusing—a source of enduring mystery to me—is how she assembled a circle of very smart people to expound, develop and celebrate her third rate philosophy, which is not, strictly speaking, philosophy at all, but polemic and persuasion masquerading (perhaps even to itself) as argument.

But perhaps a brief analytical demonstration is in order.  I’ve forgotten most of the vocabulary from my study of logic as a philosophy major, but insofar as you may not

know them either, I’ll use layperson’s terms.)

A)   In the very first sentence of the paragraph above, she presents capitalism (“that is, capitalism”) as the example of what a free society is.  Here, she blithely assumes the conclusion required to advance her argument.  (Free society –or capitalism, as she defines it, has for its “indispensable foundation” the principle of individual rights, which can only be upheld and protected by capitalism.) She’s neither subtle nor slippery. It’s just bald assertion instead of argument, with no consideration of alternatives.

B)   Who are “today’s intellectuals.” Isn’t that nebulous, catchall category a straw man?  All intellectuals alive today? The so-called conservatives?  The so-called liberals? Which ones?  They can’t all agree, or else they wouldn’t be intellectuals.

C)   Has she monitored discussions by “so-called” conservatives such that she can make this claim with any objectivity or credibility?   And if they’re only “so-called,” who calls them that?  Not her, it would seem.  Now, insofar as the identity or even existence of these putative conservatives is in doubt, how can they be said to have evaded, perverted and distorted much of anything at all?

The rest of the essay continues in a similarly logic-free manner.  It would be tedious and not any more instructive to consider her flawed or false reasoning paragraph by sorry paragraph.

And yet, I remain puzzled by and curious about (rather than disgusted by or indifferent to) Ms. Rand, a writer of popular potboilers who in her “serious” writings seems unwilling to distinguish between denotation and connotation, denies the existence of an entity called society, and asserts that America was more civilized during its first 150 years of existence (when slavery was the law of our land and women were disenfranchised!) than it is today.  Since she is not a fool, I conclude that she’s either willfully obtuse or piously vicious.  She is, undeniably, an interesting character.

But whereas her life, literature and political scribblings entertain me, the passionate intensity and impact of her acolytes, fills me with contempt.  Her arguments are not sufficient to win a high-school debate; how then did she attract eminent, well-educated persons and influence policy decisions at the national level.  Given that her circle and reputation developed before she published her opinions, she must have been more than charismatic; she must have been a mesmerer.   Or perhaps, she told people what they wanted to hear, propounded an ethical system that was neither, but which bamboozled the undiscerning or persuaded the willing to be convinced of the virtue of their vice.    Wart

Editors note–After reading some of the excerpts from Ayn Rand Nation, I think Weiss offers a pretty good explanation to why Rand has proved so durable. “…perhaps it is simply that Objectivism has no practical purpose except to promote the economic interests of the people bankrolling it…regardless of its potential to bring ruin to everyone else…”

There have been a spate of articles on Ms Rand in the last couple days. Maybe it’s something in the water. Anyway, this story points out who the real moochers are in America.

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In My Tribe

Posted on February 25, 2012 by camelotkidd

Any honest accounting of President Obama’s policies, in regard to his management of the American empire, would have to conclude that there is little substantive difference between him and his predecessor. (What was that guys name again?) This ratchet effect, where as a Republican administration moves us radically to the right, followed by a Democratic administration that makes that right ward move bipartisan, appear to be a feature rather than a bug.

The other day, discussing the state of politics with co-workers, I had a moment of spite. I said what our country deserves is a president Santorum, in that it would go a long way in clarifying where we really are. With President Santorum we wouldn’t have to pretend anymore that we care about our fellow Americans. We could just come out and say it–we don’t give a shit about anyone except rich assholes. We wouldn’t have to pretend that we care about women, or human rights, or torture, or indefinite detention, or drone strikes, or spying on Americans, or rule of law.

Because, right now on the left there’s a lot of pretending going on. With the election coming up, liberals have been rallying around the President and portraying the Republican candidates as crazy or rich-dicks. Which, of course, they are. But here’s the thing–with their support of Obama, the Democrats are just as tribal as the Republicans were with their support of Bush. Liberals vociferously opposed all these horrible policies when Bush was president, but now they’re fucking hunky-dory. My head spins! They can’t root for Team Blue when they support the same evil policies that Team Red advocates. All that does is make them look like hypocritical idiots.

With a President like Rick the Pious it would be obvious, once again, that the United States is an empire, and President Obama was a fully complicit manager during his administration. If you have not noticed, Democratic Administrations hide the empire management better than Republicans, who like to flaunt it. A President like Santorum would rub America’s face in it, not like President Obama, who issues stirring bromides attesting to “American leadership on behalf of aspirations held by people in all nations.”

This rightward movement in American politics has consequences. Both Democratic and Republican Administrations have helped turn our country into a fucking Banana Republic, with their economic and foreign policy decisions.

Well, I’m sick of the subterfuge–of a black progressive community organizer bravely confronting entrenched power. Lets just have it out in the open where everyone knows what a monster the president is. Where the Google will always describe what President Santorum represents–“A frothy mixture of lube and fecal material.”

America the Beautiful. Man on dog.

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Ownership Society

Posted on February 15, 2012 by camelotkidd

Since the bank crash and economic meltdown that began in 2007, I have been struck by the disparity in coverage.

Relying on television or print media, one might have come to believe that the crisis was brought on by government and, or greedy homeowners, and the banks made some remediable mistakes that are now solved with the latest settlement between the federal government and the banks.

The blogosphere, however, has been providing a much different narrative. Yves Smith at Naked Capitalism, David Dayen at Fire Dog Lake, and Duncan Black, aka–Atrios, among many others, have been doing a superlative job of illustrating this crisis, especially in identifying the true perpetrators of the crash and deconstructing this “shit sandwich” of a settlement, which now appears to be fucking over investors of the mortgage backed securities, in addition to the illegally foreclosed upon homeowners.

Pam Martens, long time internet economic blogger and former Wall Street investment professional, maintains that there appears to be another rational for the US Justice Departments lack of prosecution against the too big to fail banks and this latest charade of a settlement. “The banks are the Federal Governments bond brokers, the primary dealers who contractually agree to buy Treasury Bills or notes or bonds at every US Treasury auction. They may be serially corrupt, but the Uncle Sam needs those contractual guarantees of its primary dealers to be sure it can pull off its debt auctions. And the US government cannot engage in contracts with convicted financial felons.”

And, of course, there could always be a more simple explanation.

In what has to be one of the most telling episodes in the crisis, Illinois Senator Dick Durbin, blurted out what more than a few of us have long suspected in regard to the banks. Said Durbin–“frankly, they own the place.”

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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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