February 4, 2012

Weekend Economists "Glitter and Be Gay" February 3-5, 2012

Yes, there's stars in the sky, and rainbows, and ponies and chocolate for all. It's the best of all possible worlds, the Panglosses of the world assure us. Unemployment down by official report, the market soaring, the euro saved, all in a good day's work.

Take a bow, you policy wankers. This is the best Potemkin PR rush job ever done. When the government lies, it does it in a big way.

So, let's get out the bubbly and dress up for the party. Don't forget your pretty baubles!

Tansy Gold will be showing off some of her stock in trade, she promises...so get ready to ooh and ahhh!

And as for the economy, well, there's hope...the Hope diamond, for example at the Smithsonian



and the canary diamond http://www.polyvore.com/cgi/img-thing?.out=jpg&size=l&tid=29223329

and for the hoi polloi, rip-offs of other national treasures:

The Smithsonian's New Jewelry Collection for the Shopping Channel

http://www.beadinggem.com/2010/09/smithsonians-new-jewelry-collection-for.html


http://1.bp.blogspot.com/_q7H5daARk5A/TIwrhrgMbgI/AAAAAAAAM-g/88WJmF6toIw/s1600/smithsonian+jewelry+5.jpg

February 3, 2012

France: 14th July 1789

It worked pretty well, too. I found this handy list of dates:

http://www.marxists.org/history/france/revolution/timeline.htm

Principal Dates and Time Line of the
French Revolution
First phase: Harvests have failed and starvation stalks France, the peasantry are in open and continuing revolt across the country.

June-July 1788: Insurrection at Grenoble.
8th August 1788: Louis XVI convokes État-général on suggestion of former finance minister Jacques Necker, to hear grievances.
5th May 1789: Opening of the État-général at Versailles.
17th June 1789: Representatives of the tiers état form a National Assembly swearing not to leave until a new constitution is established.
23rd June 1789: King rejects Resolutions of the tiers etat.
9th July 1789: National Assembly declares itself Constituent Assembly.
12th July 1789: Necker is dismissed. 50,000 citizens arm themselves with pikes and form National Guard.
14th July 1789: Armed citizens storm and capture the Bastille.
15th July 1789: Lafayette appointed Commander of National Guard.
17th July 1789: ‘Great Fear’ begins as peasants revolt across France.
5-11 August 1789: National Assembly decrees abolition of feudalism.
26th August 1789: National Assembly decrees Declaration of the Rights of Man and the Citizen
5th October 1789: Women lead delegation to King in Versaille demanding bread. After scuffles, they are fobbed off by the King.
6th October 1789: King returns to Paris.
2nd November 1789: Constituent Assembly decrees expropriation of Church property.
16th December 1789: National Assembly legislates for departments, etc.
28th January 1790: Removal of civil disabilities against Jews.
13th February 1790: Suppression of religious orders and vows.
19th June 1790: Abolition of nobility and titles.
14th July 1790: Civil Constitution, subordinating the Church to the civil government, inaugurated by Louis XVI.

and so forth

February 3, 2012

Apple's Ethical Blindness Selects for Criminal Suppliers in Fraud-Friendly Nations William K. Black

http://www.huffingtonpost.com/william-k-black/apples-ethical-blindness-_b_1244410.html

MASSIVE ANALYSIS OF NYT ARTICLE AND BEHIND-THE-SCENES DETAILS LEADS BILL BLACK TO CONCLUDE:

To sum it up, the Apple official who said that America does not produce the type of engineers Apple needs was speaking the truth. What we are observing is the essence of a Gresham's dynamic in which bad ethics drives good ethics out of the market.

Two aspects of this Gresham's dynamic are obscene, and both are produced by neoclassical economics dogma. Calling this process "creative destruction" is baseless and dishonest. It is the fraudulent destruction of honest businesses, professions, and labor. The Gresham's dynamic is bad for China and bad for the U.S. It is also outrageous that the World Trade Organization (WTO) ignores this non-tariff barrier to free trade and treats efforts to fight anti-employee control fraud as suspect. A few years ago, the World Bank was finally embarrassed into admitting that its purported index of economic freedom was flawed because it treated compliance with International Labor Organization (ILO) rules preventing labor abuses as a denial of economic freedom. The WTO should rule that anti-employee control fraud is impermissible and that nations that permit such frauds with virtual impunity are in violation of their WTO obligations and are subject to sanctions.

Asia's network of fraudulent suppliers of goods and services located in fraud-friendly nations is the greatest barrier to successful competition from (more) honest U.S. suppliers. Viewed today, the network's crushing advantages appear natural. That network, however, is the product of hundreds of individual firms that became large over the last 25 years by engaging in anti-employee control fraud with impunity. It is revealing that such frauds remain the norm decades after the creation of the network. Defrauding and putting the health and lives of workers at undue risk remain defining, core practices of the members of the network. Other factors contributing to the creation of the network include governmental subsidies, particularly by China, Taiwan, and South Korea, the education of large numbers of engineers in these nations, the removal of traditional trade barriers, and widespread anti-public control fraud (tax evasion and tax fraud) by the suppliers.

I repeat my earlier caution -- firms that are anti-employee control frauds are likely to commit other forms of control fraud. Apple and its Western counterparts have driven the creation of an Asian network of fraudulent firms that has distorted international trade, hollowed out U.S. manufacturing, and created a bizarre hybrid: quasi-communist crony capitalism. It boggles the mind that theoclassical economists celebrate the corrupt result as the essence of creative destruction. The network is corrupt. It will not play by the rules. Firms like Apple help create the perverse incentives that encourage the network to cheat. Surviving U.S. manufacturing firms are whipsawed by the powerful Gresham's dynamic that the frauds produce. U.S. firms and workers are constantly pressured to reduce wages and workforce to try to compete with the foreign frauds. This is the "Road to Bangladesh" strategy that has caused U.S. working class wages to stall for decades. Europe is retreating along this same road at an even more rapid rate. The Gresham's dynamic tilts the world in favor of fraudulent firms operating in fraud-friendly nations. It also tilts the world against workers in the developed world.

January 30, 2012

Economic collapse in the Western nations-On the Edge with Max Keiser-01-27-2012

MICHAEL HUDSON SHOWS US THE WAY OUT OF THIS BATTLEFIELD TO VICTORY OVER THE CRIMINAL CLASS

January 30, 2012

WEEKEND REPOST: Banking Wasn’t Meant to Be Like This

http://michael-hudson.com/2012/01/banking-wasnt-meant-to-be-like-this/

...If governments are to underwrite bank loans, they may as well be doing the lending in the first place – and receiving the gains. Indeed, since 2008 the over-indebted economy’s crash led governments to become the major shareholders of the largest and most troubled banks – Citibank in the United States, Anglo-Irish Bank in Ireland, and Britain’s Royal Bank of Scotland. Yet rather than taking this opportunity to run these banks as public utilities and lower their charges for credit-card services – or most important of all, to stop their lending to speculators and gamblers – governments left these banks operating as part of the “casino capitalism” that has become their business plan.

There is no natural reason for matters to be like this. Relations between banks and government used to be the reverse. In 1307, France’s Philip IV (“The Fair”) set the tone by seizing the Knights Templars’ wealth, arresting them and putting many to death – not on financial charges, but on the accusation of devil-worshipping and satanic sexual practices. In 1344 the Peruzzi bank went broke, followed by the Bardi by making unsecured loans to Edward III of England and other monarchs who died or defaulted. Many subsequent banks had to suffer losses on loans gone bad to real estate or financial speculators.

By contrast, now the U.S., British, Irish and Latvian governments have taken bad bank loans onto their national balance sheets, imposing a heavy burden on taxpayers – while letting bankers cash out with immense wealth. These “cash for trash” swaps have turned the mortgage crisis and general debt collapse into a fiscal problem. Shifting the new public bailout debts onto the non-financial economy threaten to increase the cost of living and doing business. This is the result of the economy’s failure to distinguish productive from unproductive loans and debts. It helps explain why nations now are facing financial austerity and debt peonage instead of the leisure economy promised so eagerly by technological optimists a century ago.

So we are brought back to the question of what the proper role of banks should be. This issue was discussed exhaustively prior to World War I. It is even more urgent today....

January 28, 2012

The Pathology of Inequality in the US: Our National Dementia About Work and Wealth

http://blog.buzzflash.com/node/13285

PAUL BUCHHEIT FOR BUZZFLASH AT TRUTHOUT

Inequality is a disease of society, a cancer growing out of control at one end of the body while the rest of it withers away.

It's not just about the money, although income and wealth inequality have never been worse in the United States. It's also the pathological adherence to free market principles that have not worked for most of the country. And a bizarre idolization of the 'innovators' who have rigged the financial system in their favor. High-priced schemers and swindlers and scoundrels roam free on Wall Street, while the downtrodden are condemned for trying to survive. "If you steal $10 from a man's wallet," observed former Secretary of the Interior Walter Hickel, "you're likely to get into a fight, but if you steal billions from the the commons, co-owned by him and his descendants, he may not even notice."

If you steal $10 from a man's wallet...

• Leandro Andrade is serving a life sentence in California for stealing five videotapes from a K-Mart. He was convicted under the state's three strikes law, after convictions for petty theft, burglary, and possession of marijuana. Justice David Souter noted that Andrade "committed theft of trifling value...with no violent crimes against the person."
  
  
• Sisters Jamie and Gladys Scott received double life sentences in 1994 for an $11 armed robbery, the first criminal offense for either of them. They spent 17 years in jail.
  
  
• As of 2003 in California there were 344 individuals serving sentences of 25 years or more for shoplifting as a third offense, in many cases after two non-violent offenses.

If you steal billions from the commons...

• The savings and loan fraud cost the nation between $300 billion and $500 billion, about 100 times more than the total cost of burglaries in 2010. The financial system bailout has already cost the country $3 trillion.
  
  
• Goldman Sachs packaged bad debt, sold it under a different name, persuaded ratings services to label it AAA, and then bet against it by selling it short. Other firms accused of fraud and insider trading were Morgan Stanley, Bear Stearns, Bank of America, Countrywide Financial, and Wells Fargo.
  
  
• The New York Times reported in 2008 that the Justice Department had postponed the bribery or fraud prosecutions of over 50 corporations, choosing instead to enter into agreements involving fines and 'monitoring' periods.

America is suffering from a "pathology of inequality," a term coined by Chilean economist Fernando Fajnzylber with regard to third-world Latin American countries that seemed autocratic and poverty-stricken at the time, but many of whom are now less unequal than the United States. One percent of our body doesn't feel the pain. American Psychological Association research indicates that wealthier people "may just not be as adept at recognizing the cues and signals of suffering because they haven't had to deal with as many obstacles in their lives."

As the body gets sicker, thinking becomes incoherent:

"The financial system led us into the crisis and it will lead us out." -- Goldman Sachs chairman Lloyd Blankfein.
"Western-style private enterprise...will lead the world out of the mess it led the world into." -- Chicago Tribune.
"If capitalism is perceived to not be working in America...it's because the system isn't capitalist enough." -- Rachel Marsden

And dementia sets in.

January 27, 2012

Weekend Economists Get a Little Drunk January 27-29, 2012

Source
Harper's Weekly (Sept. 30, 1865), p. 613. (Copy in Special Collections Department, University of Virginia Library)

Comments
Caption, "View of Darlington courthouse and the sycamore tree where Amy Spain, the Negro slave, was hung by the citizens of Darlington, SC". Amy Spain's crime was that she had yelled, "Bless the Lord, the Yankees have come!" The author of the Harper's Weekly article hailed her as a martyr to the cause of freedom for her people.

http://hitchcock.itc.virginia.edu/Slavery/details.php?categorynum=16&categoryName=Physical%20Punishment,%20Rebellion,%20Running%20Away&theRecord=21&recordCount=87


America was built on the backs of slaves, people stolen from their homes and families, pressed into labor for the duration of their natural lives, and their children after them, with abuse and privation always in their faces. They were powerless.

This is nothing special. I will look, but probably all nations were founded on the forced labor and abuse of the laborers. But this is the 21st century. We are above that, aren't we? Have we not evolved beyond such brutality?

While I'd like to reassure people that we ARE better people, I don't think we are there yet. In fact, I think the human race is slipping back into the bad old times, by trick and fraud and and massive indifference for one's fellow man on the behalf of the most successful predators, pirates and hypocrites yet produced. And I'm not referring to the former Third World nations alone. I'm referring to the United States of America.

Today's title comes from that Broadway standard, "Ole Man River", the hit from "Showboat". It's a terrible lovely, melancholy ballad, but we will look at slavery in art in general, not just this one show.

Since February is Black History Month, we will get a head start on it, but broadening the subject to all people around the world. You don't have to be black to be enslaved. And you don't have to be white to be an oppressor.

Paul Robeson - Ol' Man River (Showboat - 1936) J.Kern O. Hammerstein II

January 27, 2012

Do Progressives Have to Be Loser Liberals? By Dean Baker

http://www.nationofchange.org/do-progressives-have-be-loser-liberals-1327503908

Last week Thomas Edsall had a column in the New York Times where he directly stated that the difference between conservatives and liberals is the extent over which they are willing to reverse market outcomes to redistribute money from winners to losers:

“...the two sides are fighting over what the role of government in redistributing resources from the affluent to the needy should and shouldn’t be."

This was annoying not only because it is so seriously wrong, but also because this statement came from one of the more astute observers of American politics alive today. Anyone trying to understand the role of the government in the economy should know that whatever it does or does not do by way of redistribution is trivial compared with the actions it takes to determine the initial distribution. Rich people don’t get rich exclusively by virtue of their talents and hard work; they get rich because the government made rules to allow them to get rich.

To take an obvious example, according to the Centers for Medicare and Medicaid Services we spend close to $300 billion a year on prescription drugs. If drugs were sold in a free market, without government-granted patent monopolies, we would spend around $30 billion a year. The difference of $270 billion a year is more than five times as much money as is at stake with extending the Bush tax cuts to the wealthy. By making us pay far more for drugs, the government’s patent policy is redistributing a huge amount of money from ordinary people to the shareholders and top executives of the drug companies. We need a way to finance drug research, but there are far more efficient mechanisms than patent monopolies that don’t redistribute income upwards in the same way.

In a similar vein our policy on labor unions is incredibly one-sided in management’s favor. If a company illegally fires a worker for trying to organize a union, the complaint would go to the National Labor Relations Board (NLRB). It is likely to take months and possibly years before the complaint is settled. Even if the worker can prove their case (employers rarely admit that they fired someone because they were organizing a union) the fine to the company is trivial. As a result, breaking the law and getting rid of agitators can be very profitable for the company....On the other hand, if workers stage a strike that violates the law, for example a wildcat strike at a time when a contract is in force or a secondary strike in support of other workers, a company can typically get an injunction immediately. If the workers continue their strike, their assets will be seized and their leaders thrown in jail....Needless to say, this incredible asymmetry tilts the field in management’s favor. It is difficult for workers to organize unions and it is often difficult for organized workers to push for better wages and working conditions. That is not just a market outcome; this is the result of deliberate government policy.

The downturn we are currently suffering through is also the result of government policy. This is for two reasons. First, we got here because of the ineptitude of top policymakers in failing to recognize the housing bubble and the risks that it posed to the economy. The Federal Reserve Board just stood back and let the housing bubble grow to a size where its collapse would inevitably wreck the economy. Furthermore, once the bubble burst, the Fed, Congress, and the White House have opted not to take the actions needed to restore full employment. While the Fed has taken steps to boost the economy, it certainly could have done more. Similarly, Congress did not approve a large enough stimulus package to offset the hit from the collapse of the housing bubble. And, President Obama and the Fed have not tried to push down the value of the dollar to make U.S. goods more competitive in world markets. A lower-valued dollar could create millions of new jobs, most of which would be in manufacturing. However, because an over-valued dollar benefits powerful interest groups, like the financial sector, policy makers have been willing to allow the dollar to remain over-valued at the cost of millions of jobs for ordinary workers.

There are many other ways in which government policy has acted to redistribute money from ordinary workers to the 1 percent. This was done through the setting of the rules. And the amount of money at stake in designing these rules dwarfs the amount of money that we might fight over when we talk about tax policy that redistributes “resources from the affluent to the needy.” If progressives restrict ourselves to fighting over the tax code, then we are playing in the sandbox. This is classic “loser liberalism.” The real battle is over setting the rules, not shuffling around a few crumbs after the fact. The issue is not, as some have put it, leaving our neighbor by the side of the road. The issue is that our neighbor has been thrown off the bus. The first step toward getting him back on the bus is to say as loudly and clearly as possible exactly what happened.

January 27, 2012

How Swedes and Norwegians Broke the Power of the ‘1 Percent’ by George Lakey

http://www.commondreams.org/view/2012/01/26-3


While many of us are working to ensure that the Occupy movement will have a lasting impact, it’s worthwhile to consider other countries where masses of people succeeded in nonviolently bringing about a high degree of democracy and economic justice. Sweden and Norway, for example, both experienced a major power shift in the 1930s after prolonged nonviolent struggle. They “fired” the top 1 percent of people who set the direction for society and created the basis for something different.

A march in Ådalen, Sweden, in 1931.

Both countries had a history of horrendous poverty. When the 1 percent was in charge, hundreds of thousands of people emigrated to avoid starvation. Under the leadership of the working class, however, both countries built robust and successful economies that nearly eliminated poverty, expanded free university education, abolished slums, provided excellent health care available to all as a matter of right and created a system of full employment. Unlike the Norwegians, the Swedes didn’t find oil, but that didn’t stop them from building what the latest CIA World Factbook calls “an enviable standard of living.”

Neither country is a utopia, as readers of the crime novels by Stieg Larsson, Kurt Wallender and Jo Nesbro will know. Critical left-wing authors such as these try to push Sweden and Norway to continue on the path toward more fully just societies. However, as an American activist who first encountered Norway as a student in 1959 and learned some of its language and culture, the achievements I found amazed me. I remember, for example, bicycling for hours through a small industrial city, looking in vain for substandard housing. Sometimes resisting the evidence of my eyes, I made up stories that “accounted for” the differences I saw: “small country,” “homogeneous,” “a value consensus.” I finally gave up imposing my frameworks on these countries and learned the real reason: their own histories.

Then I began to learn that the Swedes and Norwegians paid a price for their standards of living through nonviolent struggle. There was a time when Scandinavian workers didn’t expect that the electoral arena could deliver the change they believed in. They realized that, with the 1 percent in charge, electoral “democracy” was stacked against them, so nonviolent direct action was needed to exert the power for change.

In both countries, the troops were called out to defend the 1 percent; people died. Award-winning Swedish filmmaker Bo Widerberg told the Swedish story vividly in Ådalen 31, which depicts the strikers killed in 1931 and the sparking of a nationwide general strike. (You can read more about this case in an entry by Max Rennebohm in the Global Nonviolent Action Database.)

The Norwegians had a harder time organizing a cohesive people’s movement because Norway’s small population—about three million—was spread out over a territory the size of Britain. People were divided by mountains and fjords, and they spoke regional dialects in isolated valleys. In the nineteenth century, Norway was ruled by Denmark and then by Sweden; in the context of Europe Norwegians were the “country rubes,” of little consequence. Not until 1905 did Norway finally become independent.

When workers formed unions in the early 1900s, they generally turned to Marxism, organizing for revolution as well as immediate gains. They were overjoyed by the overthrow of the czar in Russia, and the Norwegian Labor Party joined the Communist International organized by Lenin. Labor didn’t stay long, however. One way in which most Norwegians parted ways with Leninist strategy was on the role of violence: Norwegians wanted to win their revolution through collective nonviolent struggle, along with establishing co-ops and using the electoral arena.

In the 1920s strikes increased in intensity. The town of Hammerfest formed a commune in 1921, led by workers councils; the army intervened to crush it. The workers’ response verged toward a national general strike. The employers, backed by the state, beat back that strike, but workers erupted again in the ironworkers’ strike of 1923–24.

The Norwegian 1 percent decided not to rely simply on the army; in 1926 they formed a social movement called the Patriotic League, recruiting mainly from the middle class. By the 1930s, the League included as many as 100,000 people for armed protection of strike breakers—this in a country of only 3 million!

The Labor Party, in the meantime, opened its membership to anyone, whether or not in a unionized workplace. Middle-class Marxists and some reformers joined the party. Many rural farm workers joined the Labor Party, as well as some small landholders. Labor leadership understood that in a protracted struggle, constant outreach and organizing was needed to a nonviolent campaign. In the midst of the growing polarization, Norway’s workers launched another wave of strikes and boycotts in 1928.

The Depression hit bottom in 1931. More people were jobless there than in any other Nordic country. Unlike in the U.S., the Norwegian union movement kept the people thrown out of work as members, even though they couldn’t pay dues. This decision paid off in mass mobilizations. When the employers’ federation locked employees out of the factories to try to force a reduction of wages, the workers fought back with massive demonstrations.

Many people then found that their mortgages were in jeopardy. (Sound familiar?) The Depression continued, and farmers were unable to keep up payment on their debts. As turbulence hit the rural sector, crowds gathered nonviolently to prevent the eviction of families from their farms. The Agrarian Party, which included larger farmers and had previously been allied with the Conservative Party, began to distance itself from the 1 percent; some could see that the ability of the few to rule the many was in doubt.

By 1935, Norway was on the brink. The Conservative-led government was losing legitimacy daily; the 1 percent became increasingly desperate as militancy grew among workers and farmers. A complete overthrow might be just a couple years away, radical workers thought. However, the misery of the poor became more urgent daily, and the Labor Party felt increasing pressure from its members to alleviate their suffering, which it could do only if it took charge of the government in a compromise agreement with the other side.

This it did. In a compromise that allowed owners to retain the right to own and manage their firms, Labor in 1935 took the reins of government in coalition with the Agrarian Party. They expanded the economy and started public works projects to head toward a policy of full employment that became the keystone of Norwegian economic policy. Labor’s success and the continued militancy of workers enabled steady inroads against the privileges of the 1 percent, to the point that majority ownership of all large firms was taken by the public interest. (There is an entry on this case as well at the Global Nonviolent Action Database.)

The 1 percent thereby lost its historic power to dominate the economy and society. Not until three decades later could the Conservatives return to a governing coalition, having by then accepted the new rules of the game, including a high degree of public ownership of the means of production, extremely progressive taxation, strong business regulation for the public good and the virtual abolition of poverty. When Conservatives eventually tried a fling with neoliberal policies, the economy generated a bubble and headed for disaster. (Sound familiar?)

Labor stepped in, seized the three largest banks, fired the top management, left the stockholders without a dime and refused to bail out any of the smaller banks. The well-purged Norwegian financial sector was not one of those countries that lurched into crisis in 2008; carefully regulated and much of it publicly owned, the sector was solid.

Although Norwegians may not tell you about this the first time you meet them, the fact remains that their society’s high level of freedom and broadly-shared prosperity began when workers and farmers, along with middle class allies, waged a nonviolent struggle that empowered the people to govern for the common good.

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This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License

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George Lakey is Visiting Professor at Swarthmore College and a Quaker. He has led 1,500 workshops on five continents and led activist projects on local, national, and international levels. Among many other books and articles, he is author of “Strategizing for a Living Revolution” in David Solnit’s book Globalize Liberation (City Lights, 2004). His first arrest was for a civil rights sit-in and most recent was with Earth Quaker Action Team while protesting mountain top removal coal mining. E-mail: glakey1@swarthmore.edu

January 25, 2012

Mic check! Occupy Wall Street offers a rebuttal to State of the Union

http://blog.sfgate.com/nov05election/2012/01/24/mic-check-occupy-wall-street-offers-a-rebuttal-to-state-of-the-union/

Everybody’s got a response to the State of the Union these days — including Occupy Wall Street. Or at least a branch of Occupiers in D.C. do. They were supposed to deliver it live post-State of the Union in McPherson Square in Washington.

(By the way, in yet another sign that the Occupy movement is maturing — or at least is becoming more mainstream media friendly — we received this text from their publicist, marked “embargoed” until after the SOTU. Really.)

The following was designed to for Occupiers to take turns reading a couple lines at a time, then the crowd repeating them, “People’s Mic”-style.