Michael Hudson asks: “In light of the enormous productivity gains since the end of World War II – and especially since 1980 – why isn’t everyone rich and enjoying the leisure economy that was promised?”
The answer (per Hudson) is painfully obvious, but bears repeating (ad infinitum):
What was applauded as a post-industrial economy has turned into a financialized economy. The reason you have to work so much harder than before, even when wages rise, is to carry your debt overhead. You’re unable to buy the goods you produce because you need to pay your bankers. And the only way that you can barely maintain your living standards is to borrow even more. This means having to pay back even more in years to come.
That is the Eurozone plan in a nutshell for its economic future. It is a financial plan that is replacing industrial capitalism – with finance capitalism.
Industrial capitalism was based on increasing production and expanding markets. Industrialists were supposed to use their profits to build more factories, buy more machinery and hire more labor. But this is not what happens under finance capitalism. Banks lend out their receipt of interest, fees and penalties (which now yield credit card companies as much as interest) in new loans.
The problem is that income used to pay debts cannot simultaneously be used to buy the goods and services that labor produces. So when wages and living standards do not rise, how are producers to sell – unless they find new markets abroad? The gains have been siphoned off by finance. And the financial dynamic ends up in austerity.
And to make matters worse, it is not the fat that is cut. The fat is the financial sector. What is cut is the bone: the industrial sector. So when writers refer to a post-industrial economy led by the banks, they imply deindustrialization. And for you it means unemployment and lower wages.
As they say, read the whole damn thing.
(Image: jesse.millan, Flickr)
While many the US were celebrating seemingly positive job numbers yesterday, for London, Ontario residents such news was caustic, rock salt poured into a gaping wound.
Caterpillar subsidiary Electro-Motive Diesel (EMD) has announced that it is transforming the lockout at its London, Ontario diesel-locomotive manufacturing facility into a plant closure.
Six weeks ago, Caterpillar locked out the 465 production workers at its London plant after they overwhelmingly rejected the company’s demands for a 55 percent wage cut, the elimination of their pension plan, and other sweeping concessions.
EMD announced the closure Friday morning in a terse press release that blamed uncompetitive labor costs and worker intransigence for its decision. “The cost structure of the operation was not sustainable,” said the release, “and efforts to negotiate a new, competitive collective agreement were not successful.”
Just last week Caterpillar boasted that the 2011 fiscal year was the most profitable in its history, with profits rising by 83 percent to US $4.9 billion.
Take a moment to absorb the jarring ironic contrast between those last two paragraphs, then listen to London Mayor Joe Fontana give Caterpillar the business for letting naked greed determine the bottom line — at the expense of local workers whose lives have now been callously thrown into total flux.
And wither the Harpercons? Alas, Canada’s market fundamentalist government always respects the sanctity of the Invisible Hand (except when it doesn’t).
Prime Minister Stephen Harper used Electro-Motive as a backdrop in 2008 to promote big tax breaks for industrial capital investments, but the federal government declined to get involved in the labour dispute.
“This matter falls under provincial jurisdiction, and we are also disappointed that the Ontario Government was unable to mediate a solution to the dispute between the company and its employees,” read a statement from the Prime Minister’s Office.
The statement also promised that the federal government will continue to work on a plan that will generate new jobs and opportunities for those affected by the closure.
Thanks for providing a great campaign backdrop, but, um, we have our majority now, and besides, we can’t help it if the crummy Ontario Liberal Government is teh suck. So, uh, anyway, don’t call us — we’ll call you.
Of course, the matter of government responsibility — yes, at all levels — goes beyond mere inaction.
It is not so much its inaction that looks bad on the Harper government, but that the lockout undermines its argument that corporate tax cuts produce jobs. Electro-Motive Canada, under a previous owner, was given $5 million in tax cuts by Harper personally. The Harper government recently lowered Canada’s corporate tax rate by an additional 1.5%, voluntarily cutting almost $3 billion from government revenue. This at a time when it is planning massive budget cuts to reduce its deficit.
The lockout is equally damning to the Conservative claim that free trade will attract job-creating foreign investment. The federal Conservatives are finishing up a new free-trade deal with Europe and have plans for a deal with India next. Given the fact that the government will not discuss the details of these free-trade negotiations, there is no way of knowing whether they would leave Canada more vulnerable to actions like those of Caterpillar’s.
Premier Dalton McGuinty has largely escaped the anger directed toward Harper. That may be in part because Harper is seen as more of a poster boy for the free-market policies.
But McGuinty is equally committed to corporate tax cuts and free trade. He is planning to cut another $2 billion in corporate taxes in the 2012 budget, and is an enthusiastic supporter of free trade, even if a deal with Europe risks overturning local content rules in the Green Energy Act, his chief response to Ontario’s manufacturing losses.
Given Harper’s preference for an Alberta-style resource economy, his indifference to Ontario’s manufacturing losses can be understood. For McGuinty, the Caterpillar lockout hits closer to home.
Partisan/jurisdictional slap-fighting aside, 465 workers have been pink-slipped and now find themselves stuck in financial limbo as severance negotiations delay the already-tedious Employment Insurance application process.
Federal MPs stressed that the workers couldn’t get EI because they hadn’t officially lost their jobs. Well now they have – sacked in fact – and that’s a game changer. Terminated by their employer, they now qualify for EI. The problem is that they are fighting for severance at the same time and EI can’t kick in until that is solved. So here’s something you can finally do without any jurisdictional excuses. Seek to streamline the access to EI in this unique situation. Given Caterpillar’s modus operandi, the severance issue might not be settled for months. Get these workers EI now and help them to survive. The maximum a veteran worker gets is two-thirds of their salary for 42 weeks. They’re about to lose their homes, so maybe a little intervention would be nice – it’s now in your jurisdiction. If severance is an issue, then arrange it so that it can be clawed back out of EI once the negotiations are concluded. But please, do something. This isn’t about your party’s detached position but about human justice, ostensibly offered to every worker who has paid into the system.
In an age when austerity rules, justice for workers is a rare commodity — especially in London, Ontario, where the willfully indifferent, cruelly banal machinations of the 1% have become all too apparent as a community reels in shock from the latest top-down missive of an ongoing, all-too-asymmetrical class war.
Entirely coincidental, I’m sure.
(Image: Tacoma Urbanist, Flickr)
Sarah Palin is back — and, seemingly, everywhere, as she launches a book tour (and, perhaps, a run at the White House in 2012).
In a Republican Party hoping to rebound in 2010 on the strength of a newly energized and ideologically aroused conservative grassroots, Palin’s influence is now unparalleled. Through her Facebook page, she was the one who pushed the rumor of “death panels” into the national healthcare debate, prompting the White House to issue a series of defensive responses. Unfazed by its absurdity, she repeated the charge in her recent speech in Wisconsin. In a special congressional election in New York’s 23rd congressional district, Palin’s endorsement of Doug Hoffman, an unknown far-right third-party candidate, helped force a popular moderate Republican politician, Dede Scozzafava, from the race. In the end, Palin’s ideological purge in upstate New York led to an improbable Democratic victory, the first in that GOP-heavy district in more than 100 years.
Though the ideological purge may have backfired, Palin’s participation in it magnified her influence in the party. In a telling sign of this, Congressman Mark Kirk, a pro-choice Republican from the posh suburban North Shore of Chicago, running for the Senate in Illinois, issued an anxious call for Palin’s support while she campaigned for Hoffman. According to a Kirk campaign memo, the candidate was terrified that Palin would be asked about his candidacy during her scheduled appearance on the Chicago-based Oprah Winfrey Show later this month — the kick-off for her book tour — and would not react enthusiastically. With $2.3 million in campaign cash and no viable primary challengers, Kirk was still desperate to avoid Palin-backed attacks from his right flank, however hypothetical they might be.
“She’s gangbusters!” a leading conservative radio host exclaimed to me. “There is nobody in the Republican Party who can raise money like her or top her name recognition.”
In contemporary politics, money + brand recognition = power –period. For a Republican party scrambling to maintain its ever-shrinking base, that makes Sarah Palin its most influential personality. And with the Democratic Party and the White House being seen, rightly or wrongly, as the party of Goldman Sachs, an avowed fauxpulist like Palin (she’s ‘one of us!’) driving the tone and tenor of conservative politics in an age of economic instability is not something to airily discount.
Right now, a time when only 20 percent of Americans call themselves Republicans and Democrats are shrinking as well, the independents are disgusted with both parties. In large part, it’s because neither one seems to be on their side.
The early warning shots came on Nov. 3, against an ineffective former Wall Street executive, ousted New Jersey governor Jon Corzine, and the billionaire mayor who barely bought himself a third term, Michael Bloomberg of New York. Both felt the back hand of an electorate that feels as if the system is rigged against them.
A year ago, most people were open-minded about the ground-shaking changes that came with the economic collapse. Polls found a slim majority in favor of Wall street bailouts to save the economy. They would listen, watch, wait.
By this fall, the majority were not only against the bailouts, but in favor of curbing pay on Wall Street, and tightening government regulation of same.
The continuous drip of perceived unfairness continues. One day it’s news that Goldman Sachs seems to have stepped ahead of the line of those waiting to receive H1N1 vaccines, prompting questions about why investment bankers were getting doses rather than children or pregnant women. This week, Gallup found one in five parents saying they were unable to get swine flu vaccine for their children.
Another day brings a report that the top banks are raising credit card interest rates – some as high as 29 percent, which would shame a Mob extortionist — even against people who have always paid on time. This is the thanks we get?
If Congress steers through the Great Recession without responding to the thousand points of pain among average Americans, people will see them for what they are in bottom-line terms: an insulated club. Proof, just recently, came from a Center for Responsive Politics report that 237 members of Congress — 44 percent — are millionaires, compared to just 1 percent for the country as whole.
It’s difficult to take the clumsy rhetorical and symbolic excesses of the so-called Tea Party protest movement seriously. The ham-fisted polyester populism employed by some of the more exuberant adherants seems designed to drive a stake through the barely-beating heart of parody. But the (partly manufactured) rage that is driving teabaggers to target moderate Republicans like Dede Scozzafava or burn Speaker Pelosi in effigy isn’t simply fodder for mockery by progressive bloggers and #p2 snarkmeisters; it’s a bellwhether for a burgeoning class divide that threatens to leave the Congressional millionaire elite behind — and give a boost to any political movement that figures out how to tap that rage, regardless of where that movement lies on the ideological spectrum.
The fall of social democracy in Europe may provide clues as to how this could play out if progressives fail to heed the mood of the electorate. In a piece for Red Pepper published in June of 2008, Magnus Marsdal tried to explain how and why the populist right has been ascendant in Europe over the past decade, using the Norwegian Freedom Party (FrP) as an example:
Talking to people who voted for the Norwegian populist right offers useful insights for anyone trying to fight radical right-wing populism elsewhere in Europe, particularly when it comes to what I call ‘identity politics’.
How does the FrP make the worker-voter identify with a party that is positioned so far to the right? Hostility towards foreigners and mobilisation of ‘white’ or ‘Norwegian’ identity plays a big part. So does the male- orientated FrP’s anti- feminism, which mobilises identity among male voters.
The right-wing populists also play with a particular type of consumer identity that sets the population as consumer individuals against the state, the tax system and the elite. These are the obvious side of the FrP’s identity politics.
There are two other elements that are less apparent but even more important to consider, both in Norway and in other countries where right-wing populism is on the rise.
First, the FrP’s rhetoric offers its own worker-identity. This is not the worker as opposed to bosses and owners. It is the worker contrasted to the lazy and dole abusers ‘below’ and ‘posh’, cultured people ‘above’.
It is quite normal for people to imagine society as if it were split into three different sections, with themselves in the middle. Moral values determine who is worthy, and who is unworthy, both ‘up there’, ‘down below’ and among ‘proper working people’. The unworthy ‘up there’ include all those who represent the state, the Labour Party, the government and everybody else who ‘lies and steals money from common workers’, as Hans Erling Willersrud, the car worker who is the main character in The FrP Code, puts it.
Among people ‘down there’, the worthy are those who, through no fault of their own, have become ill, disabled or been made redundant. Everyone else is unworthy, including those who don’t do their jobs properly. For many workers worthiness equals skills – you are worth something because you have skills and you do something. This way of measuring worth and dignity is an alternative to measuring by income or education. On this essentially moral scale, the ‘honest worker’ comes out on the same level as, or above, the rich person or the leading politician.
The unworthy also include the dishonest: those who turn with the wind, pay lip service to all, who are not ‘solid wood’, as Norwegians say. The worst are probably those who suck up to ‘posh’ people and intellectuals one moment, only to denounce them among workers the next. Not being perceived as ‘solid wood’ has created quite a few problems for politicians, especially for the Labour Party, which needs to present itself favourably to different groups at the same time.
From my interviews with working-class FrP voters, I made a simple model to show how those ‘up there’ and ‘down there’ stand in relation to the ‘proper working people’. The elite ‘up there’ are divided into three different types:
- the ‘know-it-alls’ linked to the education system and the state;
- the greedy, found at the top of the economy; and
- the politically powerful (often connected to the ‘know-it- alls’ and the greedy).
A second element to the FrP’s identity politics is that of aggrieved identity. ‘I’m just an ordinary worker, I have no fucking say,’ says Hans Erling Willersrud. He knows what it means to be at the boss’s beck and call and he’s had enough of the condescending attitude of Labour politicians who ‘can’t be bothered to listen to what [he’s] got to say’.He had some contact with the social security office when he was sick, and ‘has had it up to here with the system’. ‘They wouldn’t even believe he was in pain,’ says his mother Eli.
Hans Erling thinks politicians and bureaucrats are driving his country into the ground. He believes the social democratic elite has arranged things so the rich, the shrewd and the sleazy can take advantage of the system at the expense of the common man. He’s at the bottom of the pile at work. He’s at the bottom of the pile at the dole office. He’s at the bottom of the pile in the trade union (as an FrP voter) and in politics in general. He sees himself as a ‘political underdog’.
This doesn’t mean he is weak. On the contrary: being an underdog is not about lacking personal strengths, but finding that they don’t count for anything. More powerful people, regardless of their competence, are lording it over theunderdog, without recognising his skills or paying attention to what he actually knows, thinks or wants. It’s humiliating. He feels aggrieved.
And how does a political party like the FrP exploit the popular mood? It uses political language and images to touch a nerve with people who feel ignored, trampled on and overruled.
Carl Hagen’s most important ploy is to place himself in the role of the underdog. When he rages against the other parties wanting to keep a strong FrP out of government, he says, ‘Our voters will not be treated as second-rate.’ This simple sentence is perfect for connecting with people who on a daily basis, whether at work, at school or in the media, feel that they are treated like second-class citizens. Widening the focus, Hagen implies that what ordinary workers are in the workplace, the FrP is in the party political system. The voters can identify only too readily with what he is saying.
At the same time, Hagen – in the role of the affronted man who refuses to back down – offers the promise of vindication. For more than 30 years he has paid for the conceited sins of others, he tells them. But he turns the other cheek. Unlike the powerful and the arrogant, he is not driven by haughtiness or personal ambition. He is only fighting for what’s fair.
This underdog pose is brilliant because it can be applied to so many different voter groups. Above/below is a relationship that most people can recognise. Because he understands the underdog mentality, Hagen can connect with social-democratic workers as readily as with Christian fundamentalists who feel that their Christian cultural heritage is under threat.
Other subjects that mobilise the affronted population’s sense of themselves as the underdog include the FrP’s attacks on ‘politicians and bureaucrats’, its protest against schemes such as ‘the new opera being paid for by taxpayers’ and accusations that overpaid journalists are ‘persecuting the FrP’.
So where does Sarah Palin and her overwhelming ubiquity fit in all this? Like Barack Obama in 2008, Palin could prove to be a blank canvas on which citizens could project their desires en masse. Only instead of hope and change driving a national popular movement, hate and fear would be the engine of political change in 2012.
Of course, recent polls make the likelihood of a Palin run for the Presidency seem dim for the moment, as Joan Walsh notes.
But that doesn’t mean progressives should exhale:
The main reason not to fear a President Palin can be seen in recent polling among independents and moderates. In a the most current ABC News/Washington Post poll, Greg Sargent drilled down to find that: only 37 percent of independents and 30 percent of self-described moderates think she’s qualified for the presidency, and 58 percent of moderates view her unfavorably. Even more intriguing (but not surprising): Palin’s approval rating with men is higher than with women, 48 percent to 39 percent, and just a third of women believe she’d be qualified to be our first female president. (So much for Palin’s appeal to Hillary Clinton fans!)
So I think the Sarah Palin rehab tour is more about Sarah Palin Inc. than Sarah Palin 2012. She’ll rack up the speaking fees, raise some money for red-state, red-meat Republicans, further polarize the party and live the high life she thinks she deserves. Still, even as I dismiss Palin as a serious GOP threat, increasingly I believe that the faux-populism of the right is something to worry about. It may be fun to mock Sarah Palin, but Democrats shouldn’t laugh at many of the people who admire her – who see a folksy, new kind of self-made mom trying to fight the bad old Eastern elites.
Digby nails it:
I’m not saying that we should panic. These people are politically weak in their own right. But when I see the liberal gasbags on TV blithely dismissing this as if it”s impossible that Americans could ever fall for such lunacy, I feel a little frisson of alarm. I’ve read too many accounts of people who, 80 or so years ago, complacently made the same assumption. And the whole world found out that under the right circumstances even the most civilized nations can throw in with the crazies.
Bottom line: If the ugly momentum of right-wing identity politics carries into 2012, we could see the nastiest, most polarizing Presidential campaign since 1972, regardless of who gets the GOP nomination.
[T]he real issue isn’t bonuses. It’s your compensation, period. It’s the fact that, after doing your very best to wreck the world economy, you regard yourselves as entitled to levels of compensation that people who actually make things can only fantasize about. The bonus part is just the icing on the cake.Oddly, though, the idea that bonuses have something to do with performance isn’t limited to us outsiders. The WSJ article also contains this gem:
“Under the forthcoming rules, bonuses could come to no more than one-third of the total annual compensation paid to employees covered by the restrictions. Some compensation experts view the bonus limits as a mistake that turns the notion of pay for performance on its head, despite Wall Street’s culpability for the recession and credit crisis.”Oh noes! We can’t have the notion of pay for performance turned on its head! Not on Wall Street!
As someone who thinks that levels of compensation in the US are absurdly unequal, and that this is bad for the country, it’s tempting to say: oh, go ahead, you idiots. Keep your sense of entitlement to other people’s money. Make people come after you with pikes and tumbrils. See if I care.
The thing is, I don’t think that rage normally leads to good policy. (Though, as I’ve said before, I really believe that it would help a lot with moral hazard if people found the experience of having the government bail out their firms profoundly unpleasant.) And I’m sure that my inner policy wonk will shortly regain control. Still, at the moment, it’s awfully tempting. I think of people I’ve known who have worked hard all their lives for not very much money, only to be completely bankrupted by unforeseen medical catastrophes, and I imagine these people being asked to support investment bankers in the style to which they have become accustomed, and fury feels like exactly the right response.”
Here’s hoping Hil’s inner policy wonk doesn’t regain control any time soon — she definitely needs to include the phrase “pikes and tumbrils” in more posts.
h/t Sarah (who has a must-read piece over at GC on growing public fury with AIG –GO!!!)
Jim Hightower has never let his pitchfork grow dull, as he shows in this merciless skewering of the latest idiotic bleat from token NY Times conservative columnist Bobo Brooks:
There is a fury in the countryside toward these plutocratic purse-snatchers who are being allowed to keep their exalted executive positions, draw fat paychecks and get trillions of dollars in bailout money from common taxpayers. People don’t merely resent them, they yearn for the legalization of tar-and-feathering!
Yet, Brooks and his political brethren are now bemoaning the plight of the plutocrats, assailing the “redistributionists” who talk of spreading America’s wealth. In his column, Brooks cried out for a conservative vision of “a nation in which we’re all in it together – in which burdens are shared broadly, rather than simply inflicted on a small minority.”
Do we look like we have suckerwrappers around our heads? Where were these tender-hearted champions of sharing throughout the last 30 years, when that same “small minority” was absolutely giddy with redistributionist fervor – redistributing upward, that is?
With the full support of their political hirelings from both parties, this minority created tax dodges, trade scams, corporate subsidies, deregulation fantasies, financial hustles, de-unionization schemes, bankruptcy loopholes and other mechanisms that turned government into a redistributionist bulldozer, shoving wealth from the workaday majority into their own pockets.
Brooks might have missed this 30-year class war, but most folks have been right in the thick of it and are not the least bit squeamish about supporting a national effort to right those wrongs. After all, even a dog knows the difference between being stumbled over – and being kicked.
If only Hightower’s fellow populist Texican rabble-rouser Molly Ivins was still among the living; we need her brilliantly pointed insight now more than ever to help puncture bloated elite windbags like Bobo.
Related: Ok, I can kinda sorta grok fiddling as Rome goes up in flames. But dancing on tables at brunch while sipping on $2,500 ($2,500!) jeroboams of champagne–in the middle of the afternoon? Un-fucking-believable.
h/t Erik Loomis
Via Memeorandum, some of the other progressive bloggers highlighting McHenry’s statement seem to be primarily concerned with how the Dem0cratic leadership in Congress can use the GOP’s apparent lack of ‘discipline’ to partisan advantage. Yeah, um, so what does the obstruction uber alles strategy mean for the economic health of the fucking nation and world, to ordinary people worried about the future?
We’re talking 4.4 million US jobs lost since the recession began (with more losses almost guaranteed to occur), further bank failures, potential state government bankruptcies. And yet it’s still all about scoring points and the perpetual fucking horse race?
This isn’t a fucking game; this is class warfare, kids.
Sharpen the goddamn fucking pitchforks.
Greg Sargent notes that House Taliban lieutenant Rep. Patrick McHenry has finally given voice to the blatantly obvious motivation driving the GOP obstruction uber alles strategy:
McHenry’s description is buried in this new article from National Journal (sub. only):
“We will lose on legislation. But we will win the message war every day, and every week, until November 2010,” said Rep. Patrick McHenry, R-N.C., an outspoken conservative who has participated on the GOP message teams. “Our goal is to bring down approval numbers for [Speaker Nancy] Pelosi and for House Democrats. That will take repetition. This is a marathon, not a sprint.”
McHenry’s spokesperson, Brock McCleary, tells me his boss is standing by the quote.
Of course McHenry is standing by the quote. The leaderless GOP insurgency has nothing left in its depleted arsenal except recycled guerrilla tactics, the ideological equivalent of roadside IEDs. They are literally betting the House on the efficacy of this strategy.
And, as D-Day notes, the asymmetrical campaign goes beyond mere electoral gain:
Over the long term, all [Congressional Republicans] are doing is chipping away at the notion that government can perform its core function, demonizing the activities of the Congress, evoking mistrust in elected officials, and poisoning the whole notion of federal spending. That’s their REAL project.
So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.
But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.
Bottom line is this: The GOP is perfectly willing to sacrifice the economic solvency of the United States–of the entire fucking world–simply to gain a few seats in 2010–and, in the process, will do whatever it takes to guarantee the fulfilment of its by-now tired contention that public investment never, ever works.
Frank Schaeffer is absolutely correct:
[T]he Republican Party has become the party of obstruction at just the time when all Americans should be pulling together for the good of our country. Instead, Republicans are today’s fifth column sabotaging American renewal.
Sharpen the pitchforks.