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Demeter

Demeter's Journal
Demeter's Journal
November 8, 2013

Those Depressing Germans By PAUL KRUGMAN

http://www.nytimes.com/2013/11/04/opinion/krugman-those-depressing-germans.html?_r=0



German officials are furious at America, and not just because of the business about Angela Merkel’s cellphone. What has them enraged now is one (long) paragraph in a U.S. Treasury report on foreign economic and currency policies. In that paragraph Treasury argues that Germany’s huge surplus on current account — a broad measure of the trade balance — is harmful, creating “a deflationary bias for the euro area, as well as for the world economy.” The Germans angrily pronounced this argument “incomprehensible.” “There are no imbalances in Germany which require a correction of our growth-friendly economic and fiscal policy,” declared a spokesman for the nation’s finance ministry. But Treasury was right, and the German reaction was disturbing. For one thing, it was an indicator of the continuing refusal of policy makers in Germany, in Europe more broadly and for that matter around the world to face up to the nature of our economic problems. For another, it demonstrated Germany’s unfortunate tendency to respond to any criticism of its economic policies with cries of victimization.

First, the facts. Remember the China syndrome, in which Asia’s largest economy kept running enormous trade surpluses thanks to an undervalued currency? Well, China is still running surpluses, but they have declined. Meanwhile, Germany has taken China’s place: Last year Germany, not China, ran the world’s biggest current account surplus. And measured as a share of G.D.P., Germany’s surplus was more than twice as large as China’s. Now, it’s true that Germany has been running big surpluses for almost a decade. At first, however, these surpluses were matched by large deficits in southern Europe, financed by large inflows of German capital. Europe as a whole continued to have roughly balanced trade.

Then came the crisis, and flows of capital to Europe’s periphery collapsed. The debtor nations were forced — in part at Germany’s insistence — into harsh austerity, which eliminated their trade deficits. But something went wrong. The narrowing of trade imbalances should have been symmetric, with Germany’s surpluses shrinking along with the debtors’ deficits. Instead, however, Germany failed to make any adjustment at all; deficits in Spain, Greece and elsewhere shrank, but Germany’s surplus didn’t. This was a very bad thing for Europe, because Germany’s failure to adjust magnified the cost of austerity. Take Spain, the biggest deficit country before the crisis. It was inevitable that Spain would face lean years as it learned to live within its means. It was not, however, inevitable that Spanish unemployment would be almost 27 percent, and youth unemployment almost 57 percent. And Germany’s immovability was an important contributor to Spain’s pain. It has also been a bad thing for the rest of the world. It’s simply arithmetic: Since southern Europe has been forced to end its deficits while Germany hasn’t reduced its surplus, Europe as a whole is running large trade surpluses, helping to keep the world economy depressed. German officials, as we’ve seen, respond to all of this with angry declarations that German policy has been impeccable. Sorry, but this (a) doesn’t matter and (b) isn’t true.

Why it doesn’t matter: Five years after the fall of Lehman, the world economy is still depressed, suffering from a persistent shortage of demand. In this environment, a country that runs a trade surplus is, to use the old phrase, beggaring its neighbors. It’s diverting spending away from their goods and services to its own, and thereby taking away jobs. It doesn’t matter whether it’s doing this maliciously or with the best of intentions, it’s doing it all the same. Furthermore, as it happens, Germany isn’t blameless. It shares a currency with its neighbors, greatly benefiting German exporters, who get to price their goods in a weak euro instead of what would surely have been a soaring Deutsche mark. Yet Germany has failed to deliver on its side of the bargain: To avoid a European depression, it needed to spend more as its neighbors were forced to spend less, and it hasn’t done that. German officials won’t, of course, accept any of this. They consider their country a shining role model, to be emulated by all, and the awkward fact that we can’t all run gigantic trade surpluses simply doesn’t register. And the thing is, it’s not just the Germans. Germany’s trade surplus is damaging for the same reason cutting food stamps and unemployment benefits in America destroys jobs — and Republican politicians are about as receptive as German officials to anyone who tries to point out their error. In the sixth year of a global economic crisis whose essence is that there isn’t enough spending, many policy makers still don’t get it. And it looks as if they never will.
November 2, 2013

Basic Income and the Atavistic Appeal of Austerity A MUST READ ARTICLE!

http://www.pieria.co.uk/articles/basic_income_and_the_atavistic_appeal_of_austerity

Today, Basic Income, the proposal that the government provide each and every citizen an income sufficient to meet his or her minimal needs, sounds utopian, maybe even ridiculous. Soon it will merely seem impractical and a little later, it will be recognised as obvious, inevitable and necessary, not because it will provide a safety net for our poorest citizens or even reduce inequality, worthy as those goals are, but rather because it creates demand, the only thing our economy currently lacks. Basic income may well prove to be the best tool to preserve our capitalist system.

These days capitalism and technology have made us so efficient that creating goods and services requires ever less labour. A dozen workers can make steel it used to take hundreds to produce. Three men and a tractor can pick as much cotton as 1000 sharecroppers. White-collar workers are not immune to productivity gains. The personal computer is doing to office workers what the internal combustion engine did to the horse 100 years ago, making them obsolete. On the micro level, of course, this is wonderful. Productivity increases mean you can make more stuff with fewer inputs. If I need fewer workers, I can keep more profit.

On a macro level, however, it is problematical. Since my workers are your customers, if I hire fewer workers (or am able to pay them less) they spend less in your shop, which means you buy less inventory and fire some of your workers and this demand deficit ripples through the economy, creating a gap between potential and actual output. A guaranteed basic income, giving citizens money they will spend straight away creates demand and ultimately stimulates the animal spirits of the private sector. If you think about it a bit, it is a no brainer.

But the functioning and advantages of basic income is not the point of this essay. I want to look instead at why it still seems utopian and ridiculous. Lets think about George Osborne and his economically illiterate advocacy of austerity. Even the IMF tells us British GDP has suffered because of this misguided policy. Why then, does the Chancellor continue to claim that reducing government spending is vital to economic recovery?

WHY INDEED? SEE LINK FOR ANSWERS
November 2, 2013

Detroit Will be Democracy's Decisive Battle by BAR executive editor Glen Ford

http://www.blackagendareport.com/content/detroit-will-be-democracys-decisive-battle


Detroit is the battleground chosen by Wall Street to crush the last vestiges of American democracy by creating “the template for direct corporate rule.” Finance capital recognizes that it can no longer coexist with democratic institutions, which are most easily destroyed by attacking Black rule in the cities.




“If we don't do something real soon, I think you'll have to agree that we're going to be forced either to use the ballot or the bullet. It's one or the other in 1964. It isn't that time is running out -- time has run out!” – Malcolm X, “The Ballot or the Bullet,” Cleveland, Ohio, April 3, 1964.



A half-century after the man once known as Detroit Red spoke those words, the last grains of sand are trickling from the hour glass of what has passed for democracy in America. The principle of one-person, one vote – or any meaningful franchise, at all – is no longer operative for the majority of Black people in the state of Michigan, whose largely African American cities are run by emergency managers accountable to no one but Rick Snyder, the venture capitalist in the governor’s mansion. The same bell is tolling for every urban center in the land, as hegemonic finance capital creates the template for direct corporate rule through the systematic destruction of Detroiters’ citizenship rights.

The 82 percent Black metropolis has been reduced to a Bantustan in both the economic and political senses of the term. Surrounded by some of the richest counties in the nation, the impoverished city exemplifies a national racial wealth gap that is more profound than that which existed in South Africa at the height of apartheid, as detailed by Jon Jeter in this issue of BAR (See “Worse Than Apartheid: Black in Obama’s America”). The Emergency Manager law, passed by the Republican state legislature after rejection by voters in a referendum, makes the Bantustan analogy complete, with a Black corporate lawyer overseeing the dismantling of every mechanism of local democracy. Kevyn Orr’s ascension as plenipotentiary of Wall Street is also the ultimate logic of the most vulgar current of African American politics, which seeks only Black representation at the highest levels of power, no matter whose interests are served. Wall Street long ago scoped this Black weakness, and has exploited it at every political level.

“The same bell is tolling for every urban center in the land.”

...Kevin Orr, ensconced in a $5,000 pH er month luxury penthouse condominium paid for by one of Governor Snyder’s private slush funds with contributions from secret corporate donors, is building the template for urban democratic dissolution from scratch. He is a crude and unimaginative man, doing Wall Street’s bidding with little finesse in the bright light of day. His arrogance is buttressed by the certainty that he is backed by the real rulers of the American State, Wall Street, and that the outcome in Judge Steven Rhodes’ federal bankruptcy court will create precedent to render all of America’s cities servile and neutered. Orr is also aware that his coloration provides perfect cover for his mission – added value for his services, well worth the luxury suite. (The judge ruled that Orr’s accommodations were irrelevant to the case.).... Wall Street recognizes that it cannot effectively consume the public sphere as long as the public retains the electoral democratic mechanisms to stop it. In other words, concentrated capital can no longer coexist with even the thin gruel of American democracy.... MORE


DEATH OF A GREAT AMERICAN CITY--CITY OF MY BIRTH, INCIDENTALLY

November 1, 2013

Weekend Economists Celebrate El Dia de los Muertos November 1-3, 2013

http://s3.amazonaws.com/rapgenius/filepicker%2FWlyhPBxTScCffju47tmM_death_.

I'm taking a semi-sidetrack from Simplicity this weekend....One could say, there's nothing simpler than Death. Oh, the details may vary, but it's a one-way door. Once a person passes, his story ends.

Death is the price of life, due from the first definable moment that the clock starts running. Different individuals, different species, barring an outside cause, will die at different times in different ways. So what does a person do? (The survivors, the temporarily alive, I mean)

Let's consider the options:

Religion / Philosophy (multiple variations)
Denial (pretty universal if not continuous)
Resignation
"Gather ye rosebuds while ye may"
Procreate
Publish
Distract

In less sophisticated times, people gave Death a lot more thought. They saw on a regular basis how tentative and fragile Life is as a state of being. Death informed their lives.

But in this 21st century, in this wealthy culture, Death has been tidied away, conducted behind closed doors, and never thought about as a reality by any one, not even life insurance salesmen.

Certainly not by our President, who has no difficulty ordering a rain of Death on people half a world away...and doesn't understand why anyone would get upset and want to take his Gameboy away....

Nor by our Bankster Class, who will never see the results of their fiscal crimes.

So, while we wait for Revelation, let's document those crimes....

as we celebrate and mourn our Lost but Loved.





November 1, 2013

Here’s how GOP Obamacare hypocrisy backfires

http://www.salon.com/2013/10/28/what_the_tea_party_misses_if_you_hate_obamacare_youll_really_hate_what_the_right_wants_to_do_to_social_security/

The smartest thing yet written about the botched rollout of the Affordable Care Act’s federal exchange program is a post by Mike Konczal of the Roosevelt Institute at his “Rortybomb” blog at Next New Deal. Konczal makes two points, each of which deserves careful pondering. The first point is that to some degree the problems with the website have been caused by the overly complicated design of Obamacare itself. Instead of being a simple, universal program like Social Security or Medicare, the Affordable Care Act system is designed as if to illustrate Steven Teles’ notion of “kludgeocracy” or needless, counterproductive complexity in public policy. By using means-testing to vary subsidies among individuals and by trying to match individuals with private insurance companies, the ACA requires far more information about people who try to sign up than do simpler public programs like Social Security and Medicare. If Congress had passed Medicare for All, the left’s preferred simple, universal alternative to the kludgeocratic ACA mess, signing up would have been a lot easier and the potential for website snafus correspondingly less.

Konczal’s second point is even more important — the worst features of Obamacare are the very features that conservatives want to impose on all federal social policy: means-testing, a major role for the states, and subsidies to private providers instead of direct public provision of health or retirement benefits. This is not surprising, because Obamacare’s models are right-wing models — the Heritage Foundation’s healthcare plan in the 1990s and Mitt Romney’s “Romneycare” in Massachusetts...most conservative and libertarian plans for healthcare for the elderly involve replacing Medicare with a totally new system designed along the lines of Obamacare, with similar mandates or incentives to compel the elderly to buy private health insurance from for-profit corporations.

..................................


If you don’t like Obamacare, you should really, really hate the proposed conservative alternatives to Social Security and Medicare...Will the flaws of Obamacare really hurt the right and help center-left supporters of universal social insurance? I doubt it. To begin with, this implies a willingness of the right to acknowledge that Obamacare, in its design, is essentially a conservative program, not a traditional liberal one. But we have just been through a presidential campaign in which Mitt Romney, who as governor of Massachusetts presided over the creation of the most important model for Obamacare, rejected any comparison of Romneycare with Obamacare. What is more, instead of agreeing with Konczal that the flaws of Obamacare are shared by most conservative entitlement reform proposals, conservatives are likely simply to denounce Obamacare as “socialism” or “collectivism” while promoting their own, Obamacare-like replacements for Social Security and Medicare, with blithe indifference to their own inconsistency.

Nor are progressives likely to press the point in present or future debates. Unlike conservatives, who are right-wingers first and Republicans second, all too many progressives put loyalty to the Democratic Party — most of whose politicians, including Obama, are not economic progressives — above fidelity to a consistent progressive economic philosophy. These partisan Democratic spinmeisters are now treating Obamacare, not as an essentially conservative program that is better than nothing, but as something it is not — namely, a great victory of progressive public policy on the scale of Social Security and Medicare.

In doing so, progressive defenders of Obamacare may inadvertently be digging the graves of Social Security and Medicare.

AS THEY MAY HAVE ALREADY DONE FOR UNIVERSAL SINGLE-PAYER HEALTH CARE, WHICH IS NOT PRIVATE HEALTH INSURANCE...
November 1, 2013

50 Ducks walk into a CVS

November 1, 2013

Obama's Insider Threat Program Turns "Colleagues Against Each Other"

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=10904

.... So let's start with talking about the current state of affairs for whistleblowers in the United States. In the last segment I mentioned President Obama has used the Espionage Act against whistleblowers more than every other president combined. And now there's an "insider threat" program that encourages federal employees to report suspicious actions by their coworkers. Have us understand why are these practices so dangerous, so dangerous to bringing the truth forward to the public.

COLEMAN-ADEBAYO: Well, I think we first have to identify or define what a suspicious act is, because according to the Insider Threat Program a suspicious act is any kind of activity that places stressors on various employees. And so, for example, a stressor can be financial difficulties at home. A stressor can be difficulties with your children. A stressor can be a health-related issue. Those are the stressors that this act is addressing as a problem for the administration. That's very important for you to understand.

So, for example, if an employee goes to lunch with a colleague and she's bemoaning the fact that her 15-year-old son is giving her a lot of problems, that's a stressor, that's a problem, and the employee who is listening to this narrative must go back to the Insider Threat office at their agency and report that their colleague is having problems with her 15-year-old son. Or if you find out that one of your colleagues is having trouble paying their mortgage, that is a stressor that must be reported.

DESVARIEUX: And if you don't report it?

COLEMAN-ADEBAYO: And if you don't report it, there are all kinds of penalties, including being fired from your job. So essentially what this act has done is to take a chapter out of the Stasi, out of East Germany, in which you basically turn colleagues against each other. Basically they're rewarded for snitching on each other. So you break up any possibility of community inside the organization, any possibility of collegiate relationships inside of the organization, and you basically have everyone looking over their shoulders trying to determine whether or not someone is going to snitch on them, whether that narrative is truthful or not.

So you can imagine how this can be--this kind of executive order can be abused. If you want to get rid of a colleague, all you have to do is, you know, go to the Insider Threat office and say, I heard that Mary said that she's having trouble with her husband....
November 1, 2013

Citizens of the world, unite! You have nothing to lose but your data

http://www.theguardian.com/commentisfree/2013/oct/31/citizens-world-unite-data?CMP=ema_565&et_cid=54637&et_rid=kdmpf@hotmail.com&Linkid=http%3a%2f%2fwww.theguardian.com%2fcommentisfree%2f2013%2foct%2f31%2fcitizens-world-unite-data

...Karl Popper argued that the preservation of democracy requires independent courts, legislature and press to check and restrain otherwise overweening authority. Shockingly, Snowden has shown that, today, these mechanisms have failed.

But for Snowden, Congress wouldn't even know what the NSA is doing. Secret Fisa court hearings have served as little more than a rubber stamp in authorizing its activities. Only one or two tough-minded newspapers have taken on the fight.

Relying on occasional brave whistleblowers is scant protection for liberty and democracy. Popper wrote for the world of the 20th century. In the 21st, the internet has changed the game....Congress may draw red lines around bugging Angela Merkel's cellphone, or reading Americans' emails, but a few new, broadly-drafted laws or congressional committees won't be enough. Government's and business's hunger for information is insatiable; their technical abilities to obtain it will only improve. Snowden has shown us that they cannot be trusted with this power.

The balance between the individual and state needs to be more fundamentally altered. New rules, in fact new kinds of rules, are needed. What is required is nothing less than a renegotiation of our contract with the state, and with each other...Snowden has shown us many remarkable things. But perhaps, the most important is that the old ways of arbitrating our freedom, privacy and security don't work anymore. The internet is an extraordinary and unprecedented new world. It demands new kinds of rules – not government's, but ours.

MORE AT LINK

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