By Joe Costello, communications director for Jerry Brown’s 1992 presidential campaign and was a senior adviser for Howard Dean’s effort in 2004 who writes at Archein and New Deal 2.0
Without meaningful reforms, our economy — and our politics — will continue to suffer.
New York, New York big city of dreams
And everything in New York ain’t always what it seems
You might be fooled if you come from out of town
But I’m down by law, I know my way around
Too much, too many people, too much
– Grandmaster Flash and the Furious Five
David Leonhardt has a piece in the New York Times on how the economy is hurting Obama and the Dems. It’s one of those articles that illustrates that when you’re reading the NYTimes, sometimes you need to check to see if you accidentally clicked over to The Onion. Two punchlines:
On the evening of Dec. 3 last year, the Bureau of Labor Statistics sent an advance copy of the next morning’s jobs report to the White House… It showed that job losses had all but stopped in November, after nearly two years of big declines. White House aides exulted. Christina Romer, a top economist, brought a copy of the numbers to the Oval Office, and President Obama embraced her. A photograph of the moment, with a Christmas tree off to the side, was hung in the office of the Council of Economic Advisers. The good news — and the optimism — would continue for the next few months.
and:
“The health care bill alone is the most significant and far-reaching piece of domestic social policy in my lifetime,” says Neera Tanden, the 40-year-old chief operating officer of the liberal Center for American Progress, who worked in the Clinton and Obama administrations and was a top official in Hillary Clinton’s campaign. In all, Ms. Tanden added, “It is hard to see a more productive session of Congress in decades.”
The Dems are finding out that “productive” is in the eye of the beholder. Meanwhile, Ms. Tanden didn’t seem to get the memo the Dems aren’t running on their “most significant and far-reaching piece of domestic social policy.”
And the complete capitulation concerning any real financial reform, where the Dems proved themselves for all who honestly care to look only loyal to Wall Street and the big banks, continues to be a drag on any sort of economic revival. The WSJ has an excellent piece on how the banks all posted profits this quarter by raiding their reserves shored up against bad loans. Because of course the housing market is getting better, right? The piece states:
The biggest U.S. banks virtually doubled their collective earnings in the third quarter just by injecting $8.1 billion into net income from funds they had set aside to cover loan losses.
There are 18 commercial banks in the U.S. with at least $50 billion in assets, and together they earned an adjusted $16.8 billion in the third quarter. Of those profits, nearly half, or 48%, were from drawing down what bankers call loan-loss reserves, according to an analysis by Dow Jones Newswires. A year ago, the same 18 banks earned $6.2 billion in quarterly profits; at that time, they added more than $7.8 billion to the same reserves, a move that reduced their profits. The analysis omits a $10.4 billion noncash charge to earnings that Bank of America Corp. disclosed during the third quarter.
Finally, Chris Whalen has a must-read piece on how, until we restructure and reform the financial sector, we will have no economic vitality. Whalen writes:
Because President Barack Obama and the leaders of both political parties are unwilling to address the housing crisis and the wasting effects on the largest banks, there will be no growth and no net job creation in the U.S. for the next several years. And because the Obama White House is content to ignore the crisis facing millions of American homeowners, who are deep underwater and will eventually default on their loans, the efforts by the Fed to reflate the U.S. economy and particularly consumer spending will be futile. As Alan Meltzer noted to Tom Keene on Bloomberg Radio earlier this year: “This is not a monetary problem.”
Forget Treasury Secretary Tim Geithner lying about the relatively small losses at American International Group (AIG), the fraud and obfuscation now underway in Washington to protect the TBTF banks and GSEs totals into the trillions of dollars and rises to the level of treason. And the sad part is that all of the temporizing and excuses by the Fed and the White House will be for naught. The zombie banks and GSEs alike will muddle along until the operational cost of servicing bad loans engulfs them. Then they will be bailed out — again — or restructured.
Make no mistake folks, there’s a criminal element atop our financial industry, who operate with both the complicity and culpability of much of our political class. Until we reform our politics and the financial industry, we will not have economic vitality. And we will not have reform, until it is demanded and undertaken by the American people. That is where we are.
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On the evening of Dec. 3 last year, the Bureau of Labor Statistics sent an advance copy of the next morning’s jobs report to the White House… It showed that job losses had all but stopped in November, after nearly two years of big declines. White House aides exulted. Christina Romer, a top economist, brought a copy of the numbers to the Oval Office, and President Obama embraced her. A photograph of the moment, with a Christmas tree off to the side, was hung in the office of the Council of Economic Advisers. The good news — and the optimism — would continue for the next few months.
In 1945, as all of Germany writhed in flames and the remnant of Hitler’s regime cringed in a hole in the ground, there was a brief exultation upon reception of the news that FDR had died. “I congratulate you, Mein Fuhrer!” Goebbels crowed in announcing the news. (Even in the bunker everyone jostled to be the first to tell Hitler any alleged good news, which of course was always fraudulent.)
They actually celebrated and breathed a sigh of relief for a few hours. They were really so insane with delusions that they thought this would mean America would pull out of the war, or at least would refuse to cooperate further with the USSR. (Goebbels had pulled a bunch of anti-communist Truman quotes to prove this thesis.)
So that’s what this little party reminds me of. The criminals are so taken in by their own delusions that they come to religiously believe in their own falsified numbers (another Hitler trademark in the late stages of the war). So they can actually convince themselves that their crimes haven’t plunged the country into a terminal Depression which will destroy so much, and will consume them in the process. (I’m convinced that whatever happens, two fatalities will be the Democratic Party and corporate liberalism itself.)
There’s no evidence that the Democratic Party will be a fatality — it’s a weird sort of survivor, changing its spots dramatically on major issues at least three times (1828, the period from Woodrow Wilson through FDR, and the 1960s). “I am not a member of any organized political party — I am a Democrat”, as Will Rogers said.
The current leadership of it, however, is toast.
The Republican Party, being run by actual fascists and not very bright ones, is much more likely to violently self-destruct.
Whatever happens we are getting a major political rearrangement coming. I wouldn’t dare to predict whether it’s next year or in 20 years. Or how peaceful it will be.
I agree that the Republican Party is “being run by actual fascists and not very bright ones.”
But where I disagree is with your assessment of the Democratic Party, which, to put it in your own terms, is “being run by actual fascists and pretty bright ones.”
That’s not accurate. The Dems are pretty clearly petty kleptocrats; the Republicans are quasi-fascists.
I’ll pick the petty kleptocrats any day.
That’s not quite accurate either. I’m more in line with DownSouth.
The Republicans are overt fascists and the Democrats are covert fascists.
I’ll pick the non-fascist any day.
Listen, if you really insist on voting, vote third party. Coke and Pepsi are screwing everyone who isn’t an insider.
Wonderful pick.
A 3rd party is just throwing away your vote, of course.
So when Saddam Hussein used to win by 98.7 percent of the vote, which side was throwing their vote away? To me, anyone voting for either corporate party is doing the exact same thing in America as those Saddam voters were doing in Iraq.
Ask yourself this, during this election cycle, which party have corporations given more money to?
That’s right, the Democrats.
When I look at election results next Wednesday, the only number that will mean anything to me is the percentage total voting for the Repulocrats. If we manage to get below 95% that is a sign of progress. Get below 90% in 2012, 80% in 2014, and 60% in 2016 and suddenly things will start to change.
Both parties are plutocrats. I love that word. And, as far as I’m concerned, spoiled votes and abstentions count. A 60% turnout means 40% voted for a better system.
You are mistaking Corporatists for Fascists. To understand the essential similarity in philosophy of the Progressives (Obama) and the Fascists, see Liberal Fascism by J. Goldberg.
“Big Brother Loves You” is the essence of both.
Progressive Ed,
As your homework, you need to go and reread every post on this blog having to do with Obama’s posture towards the financial services industry, the health care industry, and BP.
Obama is not a progressive. Not even close. He is center right but occasionally talks as if he is more to the left than he is.
You need to define “center right”. If it means a bit right of center and center means the middle between Democrats and Republicans, then that spot is constantly moving towards the right. There is no anchor on the left and Democrats and Republicans and moving right at the same speed.
EmilianoZ,
Hah, toche!
Yes, the center is moving ever to the right in the US, and Obama is perfectly happy to move to the right along with it. Just watch him do precisely that post the midterms and call it “pragmatism”.
http://www.dspguide.com/graphics/F_22_4.gif
That’s funny I was just thinking about this being like the octaves on a piano. The Republicans keep moving towards the right (higher notes) and the Democrats follow them but stay a couple notes to their left. So the two parties are somewhere between 1760 and 3520 Hz in the chart linked above.
Middle C, which is the dividing line between right and left in most sane countries, is way way off to the left in America.
There’s no evidence that the Democratic Party will be a fatality — it’s a weird sort of survivor, changing its spots dramatically on major issues at least three times
In today’s links thread I give a fuller explanation for why I think the Dems will be a fatality.
http://www.nakedcapitalism.com/2010/10/links-102910.html#comment-214853
It does not make a difference: Democrats or Republicans. Like an airline, green color, blue color, yellow color, they’re all the same. Seats are crap, the noise is unbearable and the stewardesses old and ugly. Republicans AND Democrats have been bought and paid for by the financial industry. I can’t believe this Costello guy is still trying to score political points…he should read some blogs instead.
Not true. While the Dems are nothing to write home about, if Gore had been seated for the election he won, the chance we would have invaded Iraq on his watch would have been extremely low.
Liberal sed…..
“Not true. While the Dems are nothing to write home about, if Gore had been seated for the election he won, the chance we would have invaded Iraq on his watch would have been extremely low.”
Really? Extremely low, eh?
Pray tell, and who would’ve thought Obama would be Iraqing the shit outta Afghanistan right now after those campaign promises and all.
Whatever it is you’re inhaling it’s most likely highly illegal spiked like that even in Marin County.
Huh? As a candidate, he supported the idea of ramping up the fight in Afghanistan. Seemed like a pretty obvious way to “earn” some militaristic cred to balance out all anti-Iraq war comments he used against the Republicans.
I think the anti-war people just heard what they wanted to hear.
Hell I don’t remember what he said during all his campaign speeches. I mean how many did he have on any given day? Probably 200 or so. You know like about how many he has now. Who can keep track of all his mispromises already.
All I know is that Gore would’ve done no different.
All I know is that you certainly don’t “know” that.
I beg to differ. I know Al Gore. Al Gore is no Mahatma Gandi pacifist. Hell he’s been declaring war on global warming for I don’t know how long, which begets carbon taxes, and such.
Bottomline: If there’s a way to make money for certain lofty elite circles just like with the Gorebal Warming Scamola, then you can bet your little liberal sweet cheeks Big Al would’ve been all over that like Depends in a nursing home.
Most of the Italian stewardesses on Delta flights from Italy are young and perky. So shut up!
Yep……..
Fly Genitalia! It’s Not Just Another Airline!
This actually *is* the most productive Congress since at least 2000, possibly 1988, or possibly 1979 even.
The trouble is, that’s damning it with faint praise. That’s simply not nearly good enough. Better than “totally broken” under Bush, better than “ripping up welfare and deregulating the banks” under Clinton, better than “giving in to completely insane military budgets” under Reagan…. the fact that most of those previous Congresses would have done worse with the current situation is no relief.
We actually need *good* government to get us out of this Unfortunately that requires replacing all of the Republicans and half the Democrats.
“This actually *is* the most productive Congress since at least 2000, possibly 1988, or possibly 1979 even.”
We shall (of course) be charitable by avoiding to mention, let alone examine, the quality of what this Congress has “produced”.
One party is bent on doing a kind of financial blood transfusion – replace all the “bad” money, with “good keyboard” cash and hope that things just go back to normal. The other party seems to want to do exactly the same as the first party, plus ensure that in this country an individual could still become (or at this point more like remain) fabulously wealthy and pull the welfare rug from underneath the very poor.
Now, why the current administration did not bring any “change”? How about we ask these questions: How many Senators are multimillionaires, how many have bank stocks, how many have sons and daughters and other relatives working or aspiring to work in the financial industry. Didn’t the financial industry account for – what – 20-30-40% of the total profits in the US in the years leading to the great recession. What about the rest of us. How many have 401K or other small investments in the market. It’s not much, but it hurts to see it disappear.
So, as long as most of us have a stake no matter how small in the current system, even through the system is eroding the county, it will endure.
“Now, why the current administration did not bring any ‘change’?”
Oh, I think this administration brought about plenty of change. It just wasn’t the kind of “change you can believe in.” Obama’s anointed role was pretty much in the same vein as that of Adam Smith, described here by Robert H. Nelson:
The greatest significance of Adam Smith to the economic history of the world was not in any power of economic explanation but in offering a “scientific” doctrine by which the many losers from all this radical change could be persuaded to accept their fate without active revolt—-an act of rebellion against the market that in many cases might have been to their individual advantage.
And your comment indicates an ignorance of the fact that stockholders are also a victim of the kleptocracy.
You’re wrong about Smith; he was a good guy. One quote: “All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”
In the 18th century, in the battle between the aristocracy and the upstart burgher oligarchs, it was the new secular religion that Adam Smith championed that gave the burgher oligarchs the moral and intellectual capital to prevail over the landed gentry. Using Kevin de Bruxelles’ framing—–“the one, the few and the many”—-can it sincerely be argued that classical liberal economics ever had anything to do with promoting the interests of “the many”? It looks to me like it was more jostling between two competing groups of “the few.”
Could have mainstream religious figures like Reinhold Niebuhr been mistaken? In his essay “The Children of Light and the Children of Darkness” he wrote:
The conflict between the middle classes and the aristocrats, between the scientists and the priests, was not a conflict between children of darkness and children of light. It was a conflict between pious and less pious children of light, both of whom were unconscious of the corruption of self-interest in all ideal achievements and pretensions of human culture.
Cultural critics like Wendell Berry
argue that Niebuhr was mistaken. Berry, writing in Christian Century, found that many of the institutional churches of America had been corrupted by the same gospel of efficiency that Samuelson in Economics had preached. Organized American religion was “increasingly industrialized: concerned with quantity, growth, fashionable thought and an inane sort of [progressive] expert piety.” Berry complained that the official religious bodies of America had failed to understand that “the industrial economy is not just a part of a quasi-rational system of specializations, granting the needs of the body to the corporations and the needs of the spirit to the churches, but is in fact an opposing religion, assigning to technological progress and ‘the market’ the same omnipotence, omniscience, unquestionability, even the same beneficence, that the Christian teachings assign to God.”
Regardless of how many half-way decent sentences from Smith we can quote, his legacy, or how it has been co-opted, is shameful. From his vast 5 volume tome of meandering struggles to justify a particular philosophy for a particular section of society, we have the Invisible Hand and Market Almighty, which boils down to little more than, ‘the road to hell is paved with good intentions’, or ‘never touch a running system’ or other such ‘nature knows best’ truism.
What surprised me most about Wealth of Nations was how rambling it was, and how, in contrast to what I had expected from his legacy, he was distinctly pro intervention.
There is only one explanation that makes sense as to the behavior of the Obama administration. They are conservatives and never had any intention of carrying out their campain promises.
Bingo.
Pretty much.
Those who don’t have a stake in the system – say, blue color labor – lost the most. The stock market has regained much of its losses. And during the boom years, stock holders profited handsomely from make cheap abroad-sell expensive in the US and screw the labor. What does Apple pay to a manufacturer aboard for an iPhone? What does it sell it for in the US? Where does the difference go? No wonder Apple stock flies so high. Corporate profits as a share of GDP have grown dramatically at the same time as the share of labor compensation declined. Corporations still have a lot of cash that they “invest” in share buy backs. Microsoft was just lambasted for investing in new businesses and not increasing the dividend.
So, who’s the victim here?
In case you need a reminder, here’s what you said:
How about we ask these questions: How many Senators are multimillionaires, how many have bank stocks, how many have sons and daughters and other relatives working or aspiring to work in the financial industry. Didn’t the financial industry account for – what – 20-30-40% of the total profits in the US in the years leading to the great recession. What about the rest of us. How many have 401K or other small investments in the market. It’s not much, but it hurts to see it disappear.
It appears that you are deftly trying to shift gears on me, to conflate the financial sector with “the system” or with the broader market. They’re not the same. Ever hear of control fraud? The executives running the banks looted them. So the bottom line is that, even after all the trillions of dollars in bailouts the taxpayers lavished on them, the financials haven’t performed very well for the stockholders.
Even after the recovery you tout, it looks to me like financial sector stocks are currently trading only at about 1997 levels. Were the stockholders as big a victim as the American taxpayer? No. But they were a victim, and they would have been a much bigger victim if the financial sector had not been bailed out by the taxpayers.
Look at the BOA dividend history (http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-dividends): 2007-2008 – the epicenter of the fraudulent mortgage – BOA paid the highest dividend ever -14% above the 2006 and almost three times as much as in the 2000. The CEOs shared their loot with the shareholders, and the shareholders pocketed fraudulent profits.
Since the crash the CEOs took a pay cut as well.
“For the third consecutive year, the chief executives of the 500 biggest companies in the U.S. (as measured by a composite ranking of sales, profits, assets and market value) took a reduction in total compensation. The latest collective pay cut, 30%, was the biggest of the past three years (11% and 15% declines in the prior two years).”
nilys,
The dividend has dropped to $0.01 for the last two years. Way back in 1993 it was $0.10.
Despite the little deception you’re trying to pull off, I don’t think anyone in their right mind could look at the history of dividends of BofA and conclude that is a good deal for the stock holders.
Also, seems like there was an article recently about the bankers paying themselves something like $240 billion in bonuses in 2009, one of the highest tallies ever.
So what, from 1993 to 2007, 14 years, it would been an awesome ride up to fabulous wealth. Stocks go up and down – business cycle. Companies and whole industries are born, grow, mature, age and perish. In the 1990s it was the tech bubble. What, there was no fraud in the tech bubble? Of course, there was – one example is something called “staged dealing”. And look at this 2003 article decrying huge compensations of the tech companies CEOs (http://www.usatoday.com/money/companies/management/2003-03-31-ceopay2_x.htm). Those tech CEOs were in the same position then as the bank CEOs are now: trying to justify their huge rewards in the face of falling stock prices. Eventually, things worked out and compensations adjusted. The automotive industry was once at the pinnacle of the game. How much money have Walsh made? Inflation adjusted I wouldn’t be surprised if it was comparable to the compensation in the banking industry. The banking industry might have exhausted its potential; on to the next thing, the next hot stock, the next bubble.
And that is how the system works. The biggest innovation of the recent decades was to give everyone a stake in it – even if a very tiny one. The middle classes got their 401K to worry about and watch the market. Had Bush been successful, the lower classes would’ve been brought in with the privatization of the SS. The system is prone to excesses on the down side, on the up side, in CEO compensation, stock valuation, zeal; it rewards short term profits over long term growth; it destroys demand and drives income stratification; and it allows strong-willed driven unscrupulous individuals to get away with a lot of questionable dealing. Thus, there are always “a couple of bad apples”. These bad apples is not an aberrations but a feature of the system.
Someone lost cash when BOA share price crashed. But, hey, that’s the nature of the market: there are winners and losers. It happens even to the best of companies. But then again, no one buys and holds for a long time anymore, every man is a speculator.
“The average holding period had fallen to under 2 years by the time of the 1987 crash. By the turn of the century it had fallen to below one year. It was around 7 months by 2007. “
@nilys…
I get what your saying except size does matter, even adjusted the potential losses are greater than the GD and it was a pump in large just to gardner bonus pools for a select few. We can attach all the bells and whistles you like to blind the mob but, in the end it was for a select few to achieve monumental wealth and forever change the course of history as they saw fit…death to the republic.
Skippy…600T to 1.???Q in false value is not a feature, it is the moon falling down upon us all.
Skippy, bank CEOs aren’t the highest paid executives. Look here http://www.forbes.com/lists/2010/12/boss-10_CEO-Compensation_Rank.html, there isn’t a single bank CEO in the top 25 best compensated executives. How, say, Ralph Lauren (#13) earns his pay – by making stuff very very cheaply in Asia and selling it just cheaply in the West. Politely, it’s called labor arbitrage. But isn’t a kind of cheating, doesn’t it destroy demand and drives income inequality in the West? Over there at the Econbrowser the talk is about “escaping” demand. The stimulus money are being spent on imports. So look what happens: the Fed creates cash, the government borrows the cash and gives some of it to the low to mid class consumer, the consumer buys cheap stuff that was made abroad very very cheaply: who ends up with the cash? Mr. Lauren who pockets the labor arbitrage and – lets’ guess – parks his cash in treasuries, and Asia, which turns around buys treasuries as well. Wealthy get wealthier, the masses impoverish, Asia gets to ride double digit growth rates…
Notice that I never said Bank CEOs although they are part of the pyramid, BTW Forbes is an industry rag, if you get your info there…you could do better.
As DownSouth has already pointed out your changing gears a lot…your going to end up striping out your mental tranie soon, no reverse gear when you really need it…eh.
PS. Ralph does have some nice cars and has done well in Conocurs d’Elegance at pebble. Think about…all that wage arbitrage just so Jay Leno doesn’t stand a chance at winning again…bloody uppity MM’airs…don’t they know their place…whats the point of all that money if *they* don’t genuflect correctly.
“So, as long as most of us have a stake no matter how small in the current system, even through the system is eroding the county, it will endure.”
Nothing lasts forever, even if we dearly want it to. The system won’t endure because mighty and insignificant have a big and small stakes in it, it will break because all socioeconomic systems do, bar none. Where we have a choice, however remote and fading, is in discerning and choosing an alternate path before the current status quo goes up in flames. Sadly, humanity’s current record on this is very poor indeed.
Reform is pretty difficult when every predatory interest in the empire depends on things not changing.
What I would like to know is how do the banks make money?
If nobody is getting a loan, how do they make money?
If it is “proprietary trading” (how does “proprietary” trading differnt from…trading?) somebody is trading i.e., selling something or buying something. Somebody must be losing money in the deal, so how does it continue?
OR, is it that banks have simply lost all the profits that have made over the last 50 years, the government covers the losss and than some, and we keep on having banks making “profits?”
I’m not an expert, but I think the government just hands it to them.
They borrow short-term at 0% and invest in longer-term Treasuries or Agency debt at 2% to 3% or so.
“Borrow” from the government and “lend” it back to the government in an opalescent onanistic oligarchical orgy of absurdity.
A river of cash, handed, from the government, from the American people, in fistfulls to the banks. Coining (or electroning) the sweat of your spirit into a siphoned stream.
And a tollboth gets set up, by the big cash river, to scoop up a few billion for bankster bonuses, big bonuses for watching the river flow.
Wow, “an opalescent onanistic oligarchical orgy of absurdity.” A truly scholarly description of a bankster circle-jerk.
Big banks are making money lending to hedge funds, fueling speculation in stock and commodity markets.
We just don’t seem to have a handle on how much a $Trillion traded perpetually among bankster cronies can ‘generate’ in commissions, fees, phony ratings and earnings, the PRESS, a supportive propaganda machine, think tanks producing papers to support their activities, creation of innovative securities too complicated for ordinary mortals to understand let alone regulate, buy politicians, extort taxpayer funds for generations to come …
Just imagine a blood filled bloated flea –that’s your banker.
craazyman basically has it correct.
They don’t really make money anymore, they just use the structure of the bank to raise money by any means necessary in order to pay themselves.
They are essentially parasites.
The Demos should take on the banks but probably don’t know how. Lincoln, a Republican, learned how: United States Notes which are debt and interest free legal tender fiat. Obviously, the bankers hated them but they worked.
So Demos, bailout out the population. Helicopter Ben can’t drop money on the population but you could. Make it a big drop and combine it with leverage restrictions on the banks to prevent an inflationary spiral.
Actually, F. Beard, I like your solution of giving money directly to the little people far better than that of the reining kleptocracy. The kleptocracy’s preference is to lavish trillions on the banksters and hope some of it trickles down to the “population.” This has been tried many, many times before in many different countries. It has never worked.
However, your solution is also lacking. It reminds me of the old lady watching a football game for the first time. “Why don’t they give all the boys a ball,” she exclaimed, “so they won’t have to fight over it?”
Nice concept but the little people love to tear each other apart whenever money can be shovel their way.
Remember all this bullshit about “why should this guy get something for being lazy” (never mind that the “lazy” accusation was most of the time utter malarkey) when I was responsible” during the bailout debate in 2008?
See, that is the difference between the little people and the banksters; the latter will know how to work things out for their mutual interests. The little people will tear each other apart on the lazy v productive, left v right, Christian v. “other” axis until…well…they have nothing left.
Only then will they think about revolting. It worked in the past…sometimes!
These days, well, it’s not going to work at all. The combination of National Security State, high technology and high degree of cohesion of the NSS actors makes it virtually guaranteed that the little people shall remain so.
See this:
The Stealth Coup D’Etat: U.S.A. 2008-2010
http://www.oftwominds.com/blogoct10/stealth-coup10-10.html
Hi DownSouth,
I’ll be attending a Grundeinkommen (roughly; citizen’s income) launch party in Berlin next weekend, an idea I want to get to know better, but spending money into existence (not lending as now) need not be handing it directly to J6P. There are other ways.
I don’t think living can fairly be compared to a game of football, though do see the sense of the criticism. The question is, “what function do we want money to serve?”, which begs another question, “what is money?” This is where an open national (and international) debate/discussion is sorely needed.
I’m with Aristotle, F. Beard and Stephen Zarlenga and others, who say money is a creature of law, not of nature, i.e. it is not a commodity. In the football analogy we might think of money more as the pitch and goalposts, rather than the football, where the goal posts can be swapped out for basketball nets, rugby posts, etc. Money enables economic activity, and need not be the source of competition, which itself may or may not be the driver of society generally. Money is a ticket, a counter, an abstraction of wealth, not a store, not a commodity, and should be designed as such. Banking should be redesigned to accommodate this, should be allowed to make money like all other businesses do, not by creating money, but by offering services such as loans and savings.
There’s much more to this discussion of course, but the most important part is the definition of money and what kind of a society we want.
Toby,
I highly recommend a reading of Moral Sentiments and Material Interests edited by Herbert Gintis, Samuel Bowles, Robert Boyd and Ernst Fehr. As they explain,
While the writings of the great political philosophers of the past are usually both penetrating and nuanced on the subject of human behavior, they have come to be interpreted simply as having either assumed that human beings are essentially self-regarding (e.g. Thomas Hobbes and John Locke) or, at least under the right social order, entirely altruistic (e.g. Jean Jacques Rousseau, Karl Marx). In fact, people are often neither self-regarding nor altruistic. Strong reciprocators are conditional cooperators (who behave altruistically as long as others are doing so as well) and altruistic punishers (who apply sanctions to those who behave unfairly according to the prevalent norms of cooperation).
As the authors go on to explain, the desire to punish free-riders is an innate human quality that exists in all human societies, from the smallest hunter-gatherer groups to highly complex societies like our own. But, from the quote above, the key phrase is “according to the prevalent norms of cooperation.”
There is a tremendous amount of effort expended to define what “the prevalent norms of cooperation” are, and who it is that is operating in violation of them. The current war of words between who is the biggest free-rider, the “banksters” or the “deadbeat borrowers,” is a case in point.
Another parallel issue is that there are leaders who appeal to the basest human instincts, and others who appeal to more noble instincts. As Martin Luther King, Jr. observed:
[T]here is a strange dichotomy of disturbing dualism within human nature. Many of the great philosophers and thinkers through the ages have seen this. It caused Ovid the Latin poet to say, “I see and approve the better things of life, but the evil things I do.” It caused even Saint Augustine to say “Lord, make me pure, but not yet.” So that that is in human nature. Plato, centuries ago said that the human personality is like a charioteer with two headstrong horses, each wanting to go in different directions, so that within our own individual lives we see this conflict and certainly when we come to the collective life of man, we see a strange badness. But in spite of this there is something in human nature that can respond to goodness. So that man is neither innately good nor is he innately bad; he has potentialities for both. So in this sense, Carlyle was right when he said that, “there are depths in man which go down to the lowest hell, and heights which reach the highest heaven, for all are not both heaven and hell made out of him, ever-lasting miracle and mystery he is?” Man has the capacity to be good, man has the capacity to be evil.
And so the nonviolent resister never lets this idea go, that there is something within human nature that can respond to goodness. So that a Jesus of Nazareth or a Mohandas Gandhi, can appeal to human beings and appeal to that element of goodness within them, and a Hitler can appeal to the element of evil within them. But we must never forget that there is something within human nature that can respond to goodness, that man is not totally depraved…
–Martin Luther King, Jr., “Love, Law and Civil Disobedience,” address before the annual meeting of the Fellowship of the Concerned, 16 November 1961
I think you can see how MLK’s take on human nature is much more nuanced than that espoused by the Chicago School (Friedman, Becker, Posner, etc.) and their New Atheist allies (Rand, Dawkins, etc.) in the fields of psychology and biology, who see greed and self-interest as the exclusive and only motivators of human behavior.
Toby,
I don’t know if I’m connecting the dots sufficiently to make my point or not.
In the football game of life it seems to be a universal rule that stellar performers get rewarded, free-riders and slackers get punished.
Unlike with primitive societies, in complex societies it is often difficult to discern who the stellar performers are and who the free-riders and slackers are. For instance, did the capitalists merit all the praise that Adam Smith lavished upon them? Did black people in America deserve all the opprobrium heaped upon them? As Niebuhr observed: “Since inequalities of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold.”
Money in our society has a utilitarian value, but it also has a symbolic value in that the mere possession of it conveys status and prestige.
“Money in our society has a utilitarian value, but it also has a symbolic value in that the mere possession of it conveys status and prestige.”
Humans relate to all phenomena symbolically, so everything is a symbol one way or the other. In my opinion though you’re right 100% about power and prestige and their bond with money, which is why I like to think of monetary reform as part of a longer term process away from money, or at least as the first steps of a journey characterized and driven chiefly by an ongoing demotion of money’s role in society.
These things are so hard to squeeze into a comment at NC (and elsewhere), so whatever I write can only be too little. Also, the way must be hewn from uncertainty, and cannot be clearly known in advance. And already I’m rambling.
There are no answers here, only means as end, and journey as destination. On the premise that humans are both good and bad, and that good and bad lead who knows where; accepting that our nature includes a rich and varied gamut of expressions and behaviours whose range will only end when humanity dies out; knowing how money tends to concentrate to itself and initiate, perpetuate and exacerbate societal divisions; and that all socioeconomic systems are emergent and in a constant process of change, I believe we best address periods of profound upheaval and sickness such as this by looking at the fundamentals. They are our needs as the human animal: clean air and water, fertile soil, healthy society, shelter, warmth and some sort of freedom of movement and life choices. Which system best preserves these elements over the long term? Or perhaps more open-endedly; what characteristics ought our society to have to ensure the continuing health/availability of the fundamentals? And in pondering this we must drop our emotional attachments to party, nation and other myths, as far as we can.
For me, money, education and energy are the cornerstones, and each needs a deep redesign. In terms of the minutiae of human nature and behaviour, I say, leave that to life, to us as citizens, and keep politics and economics out of it. I believe Zarlenga’s American Monetary Institute are on the right track, as is The Venus Project for longer term thinking. We can do better than the mess we are in, I believe, but better means a radical redesign, which needs to be agreed upon, and then pursued. It’s never happened before in the way I believe it needs to, and is highly unlikely to happen now. We are just too steeped in blood, too bewildered, charmed, and culturally blind.
I doubt that F. Beard’s is proposing the anarchy of simply showering cash on little people, but rather (I’d like to think) the idea of more direct stimulus that disintermediates the parasitic banksters. There is no reason a public consortium for taxpayer-shareholders cannot assemble great talent to design and create useful, wealth-generating investments and productive capacity. Think an inventive public works program, a la New Deal2.0: solar/wind-farms, earth-sheltered and or geothermal systems, scaled-up fuel cell production, Apollo-scale battery reasearch labs, new urbanism, mag-lev or other high-speed public transit. Of course, the “liberal” Democratic Party and its bankster patrons have no such vision, imagination, or will. They are rather addicted to this present bribery-fueled neo-feudal arrangement.
Banksters have abdicated by pissing on us and calling it trickle-down. It’s long past time for a bubble-up approach to restore economic dynamism of a true democratic meritocracy by empowering the enormous untapped creative potenital of lots of “little people”, and good government can do that.
I doubt that F. Beard’s is proposing the anarchy of simply showering cash on little people, but rather (I’d like to think) the idea of more direct stimulus that disintermediates the parasitic banksters. Doug Terpstra
Eh, yes, that is what I am proposing. “We doan need no stinkin intermediation (cool word,BTW, thanks).”
I also propose we practice genuine capitalism after the debt has been cleared including separate government and private money supplies.
In broad outline:
1) bailout the victims of the current fascist system, the entire population.
2) allow genuine capitalism.
“2) allow genuine capitalism.”
Is there such a thing? Does anyone know what that is? If it once existed–perhaps in the good old days–why then are we here now? Is today’s cannibalistic disintegration not the inevitable harvest of what capitalism sows? And if it never existed, can it ever?
At root capitalism is all about becoming monetarily rich, it is a system in which monetary wealth is success. This cannot mean anything other than entrenched societal divisions, perpetual GDP growth, and a crippling incapacity to prioritize those things that generate genuine wealth. Because capitalism is about monetary wealth accumulation and not about sustainability, it must rely on Hand, The Invisible and Market Almighty to distribute and administer societal good. While the environment allows it, this isn’t ‘unworkable,’ but it is, as are all things, a system with a life span.
Nothing lasts forever, not even capitalism, not even the sun, not even the universe. Change is the only constant. What is it about capitalism that makes people believe it to be the universe’s only unchanging good? I really don’t get it.
However, your solution is also lacking. DownSouth
Well, I don’t spell it out in every comment. But …
After the bailout and the debt has been cleared then we should adopt genuine capitalism in the US. That would include separate money supplies for the government and private sector:
1) Government money would be pure fiat (sorry goldbugs, we’re wise to you) and only legal tender for government debts not private ones.
2) Private monies would only be good for private debts not government ones.
That should please everyone worth pleasing.
And it will demanded when the American people start to shed the layers upon layers of mythical beliefs they harbor about the state of their society. Because as it stands right now…well, just read this:
http://xrl.in/6kv6
There’s more…
It’s worse than that. The wealthiest 1/10 of one percent own 30% of the wealth. That is the real problem and nobody ever mentions it.
We should be attacking the propaganda machinery of this government. Analyzing public opinion whose brains have been fried with propaganda isn’t going to tell us much other than how effective the American propaganda machine is.
The poorest among us, children, are subjected to a barrage of TV propaganda in addition to poor schooling. We have an entire couple of generations fried by TV propaganda controlled and manipulated by corporations and the government they buy.
It is being attacked, but the web is chaotic and lots of folks don’t see it. I think most people are still relying on traditional avenues to get linear reams of info, such as T.V. and radio. As we know, T.V. is very slickly produced stuff.
Another MEGA MEDIA merger is clearly not in the public interest, but the Sherman Anti-Trust Act is nowhere to be seen. Its really alarming how much representation for the public interest is silenced, manipulated and ignored. At this rate there won’t be any free and open Internet.
Michael Copps is the only FCC Commissioner who consistently fights for the public on net neutrality against corporate dominance of content, and was the only one of the FCC’s five members present at this hearing.
Read more: http://www.philly.com/philly/business/homepage/20100714_FCC_commissioner_is_skeptical_over_Comcast__NBC_Universal_merger_at_hearing.html“>Comcast NBC Copps
Why? “Against stupidity/The gods themselves/Contend in vain.”
“Why do so many working class Americans hold these detrimental false assumptions. Why this disconnect between self-interest and voting patterns?”
Because of the general erosion of self-control in the populace. If you don’t have self-control, you don’t have anything — at least not for long. There won’t be any real action unless someone really gets it through to the proles and peasants and internet house-apes that if YOU are not in control of yourself, then SOMEONE ELSE is, and probably not for your benefit.
I was struck in the same way by Costello’s conclusion:
“Make no mistake folks, there’s a criminal element atop our financial industry, who operate with both the complicity and culpability of much of our political class.”
It’s getting so hyper-intellectual around here, commenters pretty much ignored Costello’s key point until you brought it up again, Francois T.
If that sentence is parsed strictly, Costello is saying that “a criminal element” runs BOTH our financial system AND our political system. I agree with him. If the political system is in charge of regulating or prosecuting the criminals in the financial system, and if the political system is run by criminals, then we can deduce that the financial system will not be regulated or prosecuted, or not to any meaningful extent.
What is to be done with our realization that BOTH the political and financial classes are criminal organizations? What did the colonies do when they realized they were subjugated to a criminal, confiscatory monarchy? The Boston tea party was just the start in colonial days, that tea party was not the end goal, it was just the beginning of the process to rid the colonies of those British tyrants. The banks and our politicians have become our Tory dictators (not sure who is wearing the “crown” but that is academic).
It’s time for us to arrest the Tories and jail them. Whichever class they are in, political or financial. If we can’t arrest them and jail them, we can at least bankrupt them.
Why do so many working class Americans hold these detrimental false assumptions. Why this disconnect between self-interest and voting patterns Robert Reich? via Francois T
Because the evils of socialism are well known and because Americans assume that since we are not racist then we can’t be fascist. As usual, the usury class has sown confusion.
Asking the question why working class people don’t vote their class interest assumes that such a vote exists. Sadly, the last two years prove it doesn’t. Working class people did vote for Obama. Did they get the public option or single payer? No they got the Mitt Romney plan. Did Obama shut down the borders and impose draconian sanctions on employers who hire undocumented immigrants? Hell no, he attacked Arizona for their half-ass attempts to deal with the problem. Did Obama do anything about about shutting down the flow of working class jobs to China. Uh no. Did Obama do anything to end the wars that working class men and women have to fight and die in? Nope.
Perhaps the answer is working class people don’t vote for their class interest because such a vote does not exist.
The problem isn’t with the wealthiest tenth. It’s with the wealthiest 0.1%.
(Was replying to Jake Chase.)
Hmmm! Something does not jive here. How about…?
That provides a more complete picture of what’s up in Fucknutsville, no?
Difference between Republicans and Democrats:
They both have AIDS (full blown case)
They both screw you
The Democrats wear a condom (most of the time) while the Republicans never wear one…
great, wake me when you have completed the revolution.
pout much? Just gonna pick up your toys and go home?
Here’s an old school (and a comparatively “private” and “free market”) solution to the perverse maldistribution of wealth and power in this country: let workers form unions.
Polls consistently show that, given freedom from employer threats and retribution, American workers would want to join a union. The problem is that the way labor law is written and administered, it’s virtually impossible for workers, even those who are highly motivated, to organize.
Think about it: the eight-hour day (now fast disappearing because of the destruction of the unions, weekends, vacations, pensions, Social Security, unemployment insurance, broader civil liberties and rights to protest as a result of union struggles, all of them follow from a viable labor movement.
As a previous commenter said, the Democratic Party has a chameleon-like history, and while I’m currently agnostic about both its future and third party politics, the New Deal shows that it might be possible to reconstitute it.
Of course, first we have to throw the money changers out o the temple. Re-reading FDR’s Economic Bill of Rights from 1944 (http://www.ushistory.org/documents/economic_bill_of_rights.htm) is a home-grown starting point for reclaiming the Republic.
“Why do so many working class Americans hold these detrimental false assumptions. Why this disconnect between self-interest and voting patterns?”
Having their heads wedged firmly up their asses about current events doesn’t exactly help matters.
It seems that most of the people on this site get what is going on with an objective set of eyes and ears. The whole Big Government, Big Business, Big Labor, well sort of big labor, New Industrial State is pretty clearly been identified. Also, the 2 party system is here to keep things the way they are, with incremental tweaking to make pragmatic adaptations for domestic political and global military domination. In other words, change comes only if it is consistent with maintaining the power and the privilege of those that have power and privilege. The republicans seem to not want to do anything at all with government other than attenuate or eliminate its operation in as many departments and agencies as possible. The Democrats have successfully used government to ameliorate the worst consequences of the powerful and the privileged with New Deal and Great Society reforms. And, they have been under constant attack for capitulation of the tax dollar even that much for the citizenry. Every dollar to the government is one less for business big and small.
It would seem, with out going into a great deal of detail for all of the sound reasons, that targeting the Democratic Party for a takeover, similar to what extreme conservatives are doing for the republican party would be virtually the only non violent way of enacting meaning structural reforms of the financial sector before it destroys us in the next round of crises.
If you are not already a registered D, become one, go to local state committee meetings, insinuate yourself into their ranks, form a Pragmatists Caucus and fight your way onto the ticket to the highest office available.
Here is my suggested non-negotiable planks:
1. Federal Estate Tax of 100% of everything in an estate over $50Million. Exemptions for 1 residence and one farm or business up to $5million in market value. All proceeds of liquidated assets be deposited in a National Endowment for Education, to fund public primary and secondary education and eliminate property taxes for primary residences. If Harvard needs an endowment to be successful, so do my kids. Of course, elected officials can not serve anywhere near this.
2. No income taxes on W-2 wages. Only social security, medicare, unemployment and medical payroll taxes permitted. Social Security taxes on all income, including capital gains, insurance payments, annuities, lottery winnings and any other as not yet thought of income, as regulators can determine in the future, with no cap. Billion dollar pay days by hedge funds pay full % with no cap.
3. Reform the Uniform Commercial Code to create limited equity corporations, where labor, management and shareholders all govern the corporate body. Other structural reforms to the UCC as well TBD.
4. Banking reforms, require a percentage of reinvestment of capital on a regular basis to ensure full employment. Profits can not be reinvested in the political process of local, state or federal elections by any business entity.
Capital can leave the country in amounts less than the total of what is invested here, and only if full employment has been achieved.
The formula of big government, big business and big labor is to be replaced with full employment, full education, complete health care and secure retirement equals full prosperity. Discuss amongst yr selves.
My thinking has been running along the same lines lately, particularly the “non-negotiable” part.
For nearly 50 years now, movement conservatives have been holding the GOP’s feet to the fire, demanding favorable (shifting metaphors)litmus tests from candidates in exchange for conservative support. It’s a very no-nonsense strategy of rewarding friends and punishing enemies and guess what?
It’s worked. Anyone who thinks otherwise should compare the Republican Party of today with the GOP of circa 1960.
It’s obviously not easy for non-conservatives to emulate this strategy, simply because it’s not easy to be so Machiavellian when you’re genuinely concerned with the well-being of ordinary Americans and with the country’s long-term economic health. Still, with all the moral pitfalls it’s really the only way to go.
A successful progressive/liberal/pragmatic/reality-based/whatever political movement has to take a much tougher hard-jawed approach to electoral politics than such movements have taken in the recent past. Up to now any attractive political figure with the gift of gab has been able to gain PLPPRBW support by making vague promises of “change” (not mentioning any names here). That’s got to stop. The future attractive political figures with the gift of gab need to be nailed down in the most uncompromising fashion possible to backing firm specific reforms, with the penalty for doing otherwise being political oblivion.
Creating this kind of political movement would be about 30 years overdue, but there would no better time to start playing catchup than next Wednesday morning.
[apologies for this lengthy rant]
This post mentions unemployment, health care reform, and the reform of the financial industries.
If the goal is to return to a healthy economy then reducing unemployment levels is the imperative. But the Democrats are as lost as the Republicans.
Want to see our future? Look to Japan, they did not solve their primary problem and have seen a more or less stagnant economy. Their problem was the increased competition for the USA import market and was intractable. Our problem is Global Free Trade which has severely damaged the middle class wage earner. The politicians could solve our problems but their corporate masters object.
Winston Churchill said “You can always count on Americans to do the right thing – after they’ve tried everything else.” He may have been overly optimistic, since our chosen path to “the right thing” is sometimes destructive in and of itself.
I expect our politicians to begin to seriously address the negative effects of Global Free Trade sometime after 2018.
I think it is good for a liberal Democrat, like Joe Costello, to make this kind of critique.
“Make no mistake folks, there’s a criminal element atop our financial industry, who operate with both the complicity and culpability of much of our political class.”
I would just point out that it is incomplete. It is not “an element” that is criminally minded and acting. It is the whole shebang. Our financial industry is a criminal enterprise. But it is itself only part of the larger criminal enterprise that is kleptocracy and encompasses all of our elites: financial, political, industrial, governmental, legislative, judicial, academic, lobbyist, military, and media. It is a collaborative effort. All of the checks and balances have been removed or turned into kabuki.
Of course, many ordinary Americans will continue to support a system that victimizes them. They are relentlessly propagandized to do so. Our media keep them distracted, ignorant, and misinformed.
And let’s be clear. What little reaction there is to all this is mostly held hostage by these same elites. On the right, you have the astro-turfed, Kock brothers generated Tea Party. On the left, you have a host of liberal orgs and elite blogs that are really nothing more than trojan horses of the Democratic party.
Both serve the purpose of dissipating and deflecting real opposition to the status quo and the powers that be. The Tea party is depicted as an insurrection, creating a civil war within the GOP. But it is thoroughly corporatist in its outlook and is really just a useful club to pressure Republicans into even greater rigid adherence to the corporate line and defense of the rich. They in turn pull the corporatist Democrats further right. The Democrats then use their overt and/or effective contol of most of the progressive/liberal left to make sure that no critical mass ever develops for real political organizing and the development of a viable third party.
I am sure many have noted this anomaly: A Tea party on the right but nothing comparable on the left. Why? As Joe Costello could probably tell you, as a former Dean supporter, the left as a huge capacity for political organizing. Yet it isn’t happening, and I don’t mean it isn’t happening some or as well as it might. I mean it isn’t happening really at all.
The Tea party can be tolerated on the right because it can be controlled. On the left, an alternate party probably could not be, but the institutions that would be instrumental in creating it can be, and so there you are.
“One of the great American industrialists of our day—a man who has rendered yeoman service to his country in this crisis-recently emphasized the grave dangers of ‘rightist reaction’ in this Nation. All clear-thinking businessmen share his concern. Indeed, if such reaction should develop—if history were to repeat itself and we were to return to the so-called ‘normalcy’ of the 1920’s—then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of Fascism here at home.”
— FDR 1944 State of the Union Address
Bear in mind, too, attending chaos the criminal kind have demonstrated themselves capable of manufacturing…
C Wright Mills reviews a analysis of Nazi Germany.
http://www.wbenjamin.org/Behemoth.html
Behemoth by Franz Neuman
What is it about capitalism that makes people believe it to be the universe’s only unchanging good? I really don’t get it. Toby
To me, genuine capitalism is maximum freedom while respecting the freedom of others too. That implies minimum force, thus limited government.
However, we currently need government to compensate for past injustices. OK, fine. Yet we should allow a free market as much as possible to shrink the need for government in the future.
So …
I propose separate money supplies for government and the private sector:
1) Government money would be pure fiat (sorry goldbugs, we’re wise to you) and only legal tender for government debts (taxes and fees) not private ones.
2) Private monies would only be good for private debts not government ones.
Government is force and the private sector is voluntary cooperation. How is it morally possible for them to share just one money supply? It isn’t, I would bet.
F. Beard said: “To me, genuine capitalism is maximum freedom while respecting the freedom of others too. That implies minimum force, thus limited government.”
When we were told that by freedom we understood free enterprise, we did very little to dispel this monstrous falsehood… Wealth and economic well-being, we have asserted, are the fruits of freedom, while we should have been the first to know that this kind of ‘happiness’ was the blessing of America prior to the Revolution, and that its cause was natural abundance under ‘mild government’, and neither political freedom nor the unchained, unbridled ‘private initiative’ of capitalism, which in the absence of natural wealth had led everywhere to unhappiness and mass poverty. Free enterprise, in other words, has been an unmixed blessing only in America, and it is a minor blessing compared with the truly political freedoms, such as freedom of speech and thought, of assembly and association, even under the best conditions. Economic growth may one day turn out to be a curse rather than a good, and under no conditions can it either lead into freedom or constitute a proof for its existence.
–Hannah Arendt, On Revolution
The most glaring lack in the “free market” today is true freedom in the creation and use of private money supplies. Attempts to escape the tyranny of FRNs is met with taxation or visits from IRS swat teams.
I am not willing to give up on capitalism till we have the genuine article, not some perverted form in which our only freedom is in how well we serve the usury class, the bankers.
Their key to our slavery is legal tender laws for private debts and/or the use of private monies (such as gold or silver) for government debts.
Critics of both Pinochet and Friedman took Chile as proof positive that the kind of free-market absolutism advocated by the Chicago School was only possible through repression. So Friedman countered by redefining the meaning of freedom. Contrary to the prevailing post-WWII belief that political liberty was dependent on some form of mild social leveling, he insisted that “economic freedom is an essential requisite for political freedom.” More than his monetarist theorems, this equation of “capitalism and freedom” was his greatest contribution to the rehabilitation of conservatism in the 1970s. Where the pre-New Deal conservatives positioned themselves in defense of social hierarchy, privilege, and order, post-WWII conservatives instead celebrated the free market as a venue of creativity and liberty. Such a formulation today stands at the heart of the conservative movement, having been accepted as commonsense by mainline politicians and opinion makers.
[….]
Where Friedman made allusions to the superiority of economic freedom over political freedom in his defense of Pinochet, the Chicago group institutionalized such a hierarchy in a 1980 constitution named after Hayek’s 1960 treatise “The Constitution of Liberty.” The new charter enshrined economic liberty and political authoritarianism as complementary qualities.
[….]
Today, Pinochet is under house arrest for his brand of “shock therapy,” and Friedman is dead. But the world they helped usher in survives, in increasingly grotesque form. What was considered extreme in Chile in 1975 has now become the norm in the US today: a society where the market defines the totality of human fulfillment, and a government that tortures in the name of freedom.
–Greg Grandin, “Milton Friedman and the Economics of Empire: The Road from Serfdom”
“…while respecting the freedom of others too.” F. Beard
So you want a system based on profit and gain, yet expect everyone to naturally be respectful of others. Good luck. That respect, so far as it exists, is enforced by government. Indeed, that is the role of government in capitalism. I know you won’t like that, but it’s true all the same.
Free market capitalism did exist. In England from about 1830 to around 1870. The protectionist movement that followed was not a conspiracy against free market. It was not a movement at all. Protectionist policy and law were implemented in every nation that adopted a free market, by every social class, every religion, from every political background, with every variagated motivation. Even the strongest proponents of free markets were found promoting protectionist measures. Why? Because the absolute inevitable conclusion of a true free market system is the total concentration of wealth in the hands of the non-productive, resulting the the death of everybody.
Free market capitalism was tried, and it failed because every aspect of society instictively (not cospiritively) flinched for survival. That is also why it has never been tried again, and why it never will be.
Free market capitalism did exist. In England from about 1830 to around 1870 Birch
Actually, no. It was in the 1820’s or 1830’s that the Bank of England’s Notes were made full legal tender. Before then they were accepted for government taxes but not legal tender for private debts.
The Speenhamland law, which guaranteed a wage to everyone whether they worked or not, was repealled in the 1830s. 1836 rings a bell, but I’m not sure. Until then, there was no free market for labour, which is one of the three vital ingredients in production.
Your common stock as money idea is intriguing, but not in a free market where stock prices vary widely from the actual wealth they are supposed to represent. Where the value of stock is consistent with the real value of the business, though, this could work well.
I’ve never had a debate on two websites simultaneosly before. Gotta check out soon, though, nothing personal.
Your common stock as money idea is intriguing, but not in a free market where stock prices vary widely from the actual wealth they are supposed to represent. Where the value of stock is consistent with the real value of the business, though, this could work well. Birch
The reason stock prices are so volatile is that they are priced in an unstable monopoly money system with fractional reserves. As you guess (correctly,imo) the value of a corporation should not vary so wildly.
Gotta check out soon, though, nothing personal. birch
Getting tired myself. I enjoyed our conversation. Thanks.
So you want a system based on profit and gain, yet expect everyone to naturally be respectful of others. Birch
“In you they have taken bribes to shed blood; you have taken interest and profits, and you have injured your neighbors for gain by oppression, and you have forgotten Me,” declares the Lord GOD. Ezekiel 22:12
What form of money requires neither interest or profit taking? Ans: Common stock which shares wealth at the same time as it concentrates it for economies of scale.
You also had the Corn Laws, from 1816 to 1846.
“To me, genuine capitalism is maximum freedom while respecting the freedom of others too. […]
I am not willing to give up on capitalism till we have the genuine article, […]
Actually, no. It was in the 1820’s or 1830’s [agreeing free market capitalism existed.]” F. Beard
Your freedom in a society steered by ‘market forces’ is determined by your purchasing power. That’s not freedom. Monkeys are freer. The ‘freest’ humans have been was as hunter-gatherers, which were tribes organized exclusively along egalitarian and non-monetary lines, but even then, survival depended on your staying with the group and sacrificing some ‘liberty’ to the collective so as not to be ostracized. As society became more complex, more organized around concepts such as private property and monetary profit/wealth, more top-down hierarchical, so ‘freedoms’ diminished, so humans became less independent, more specialized, perversely in pursuit of comfort and ever less hassle from the wild. Of course this is not a smoothly linear progression, but as a brief sketch it serves well enough. (I’m not recommending a return to hunter-gathering by the way.)
To me, the entire State/Market battle ground is pantomime anyway, and the bogus capitalism = ‘free’ market = freedom equation is propaganda pure and simple. Money helps cement victors into their positions by acting as a lever to power to keep things as they are. It both inhibits fair competition while exacerbating ‘the struggle to survive.’ Humans can imagine the future, collect into social groupings, and protect their own over time down the generations, establishing dynasties, nations, and so on. No other animal does this. The ‘free’ market simply cannot be the ‘natural jungle’ its pushers mythologize it to be, money itself makes this impossible, as do humanity’s unique capabilities. If we want real ‘freedom’ and honest competition, we should throw away all trappings of the modern world and get back to beastly nature. That wouldn’t be capitalism of course, but the competing would be fairer, at least for a while. We were there already of course, and now we’re here. We keep on changing things, as things keep on changing. Capitalism is not about maximizing freedom, it is about maximizing monetary-profits, leveraging resources and ‘capital’ to that end. ‘Freedom’ is touted as its defining quality to keep the losers happy.
In the of course, there’s really no such thing as freedom. It’s a bullshit word, redolent of the adolescent urge to be free of responsibility, to stay up past bedtime, and other wee rebellions. My impression of contemporary society is that it is indeed adolescent (though on the verge of growing up). At the moment, the call for less government and more market smells to me like a desire to get Ma and Pa out of the way so that the party can rock on forever, environment be damned. Frank Zappa springs to mind:
“Free is when you don’t have to do nothin’ or be nothin’!
I wanna be free, free as the wind!”
There’s no such thing as freedom. Looking at life through the intellectual repository of isolated, ivory tower thinking that is economics, one cannot but fail to notice how interconnected and interwoven all of life is. There is no such thing as independence either. Even the hermit cannot live in a vacuum. And to say pointing this out is redundant is a misplaced criticism.
What I’m struggling to communicate is far better laid out in “The Ascent of Humanity” by Charles Eisenstein, a book I recommend often. It’s close to 600 pages long though, and it takes that much musing to get across how steeped our western culture is in the mistaken sense that we are individuals ‘born free’ with a right to do whatever we like. I can likely only fail to communicate clearly the outlines of this cultural blindspot in a comment on NC, but at least I try…
It’s funny that Milton Friedman’s “Free to Choose” did not extend to private money supplies, an obvious necessity. Other so-called libertarians are stuck in believing in the necessity of gold and silver as money.
Interesting: “What was considered extreme in Chile in 1975 has now become the norm in the US today: a society where the market defines the totality of human fulfillment, and a government that tortures in the name of freedom.”
So we are like the Babylonian empire, king Nebuchadnezzar’s great statue with its head of gold touching the heavens and it’s legs of iron resting on brittle feet of iron and clay. Or are we the feet of iron and clay?
“…so this kingdom will be partly strong and partly brittle. And just as you saw the iron mixed with baked clay, so the people will be a mixture and will not remain united, any more than iron mixes with clay.”
“…a rock was cut out, but not by human hands. It struck the statue on its feet of iron and clay and smashed them. Then the iron, the clay, the bronze, the silver and the gold were broken to pieces at the same time and became like chaff on a threshing floor in the summer. The wind swept them away without leaving a trace. But the rock that struck the statue became a huge mountain and filled the whole earth.” (Book of Daniel 2)
Since you are a fan of the Old Testament, as am I, consider that the Jews could have avoided the Babylonia Captivity if they had only not reneged on their vow to free their Hebrew debt slaves:
Jeremiah 34:8-22
@Francois T quotes:
http://xrl.in/6kv6
“Why don’t more Americans — especially those with low incomes advocate for greater redistribution of wealth?” the authors ask. Their answer: Americans drastically underestimate the disparity between the very rich and the rest of the population, are overly optimistic about social mobility, and there exists a disconnect between their attitudes toward inequality, their self-interest and public policy preferences.
Why do so many working class Americans hold these detrimental false assumptions. Why this disconnect between self-interest and voting patterns?”
But these are the symptoms of mental illness. Schizophrenia, perhaps:
Schizophrenia (pronounced /ˌskɪtsɵˈfrɛniə/ or /ˌskɪtsɵˈfriːniə/) is a mental disorder characterized by a disintegration of the process of thinking and of emotional responsiveness.[1] It most commonly manifests as auditory hallucinations, paranoid or bizarre delusions, or disorganized speech and thinking, and it is accompanied by significant social or occupational dysfunction…
…In more serious cases—where there is risk to self and others—involuntary hospitalization may be necessary…
http://en.wikipedia.org/wiki/Schizophrenia
But this would seem to show that the symptoms of mental illness can be environmentally induced, even in those not predisposed to them.
Where is US? US is 30 years behind India in comprehending that politicians are there to skim from the country. In case of US, they work with the financial honchos. Why else were people like Paulson and Summers at the helm while distributing TARP etc? (Fox guarding the hen-house).
The sooner Americans realize the better. Or, start looking at India for a corruption “Survival Guide 101”.