Breaking it Down: Industrial Capitalism vs. Financial Capitalism (or, Why We’re F*cked)

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.

And weep.

h/t

(Image: jesse.millan, Flickr)

Etch-A-Mitt Shakes Things Up Again: Welfare Moms Better Off With “The Dignity of Work”

Via Ryan Grim (ICYMI):

Apparently Ann Romney forgot to mention to Willard that moms who don’t work outside the home do THE MOST IMPORTANT JOB IN THE WORLD!!!1 and already have ample dignity, thankyouverymuchyousupersexistsoand…

oh, wait — Mittens meant those moms — y’know, the ones who can’t afford dignity.

Sorry. They gotsta earn their Caddies (if not teh car elevators).

Related: Pay no attention to the ongoing war on women voting.

David Banner on the Shooting of Trayvon Martin: “We Have to Get Some Type of Legislation Now.”

Gulf Coast hip hop impresario David Banner drops some straight knowledge re: Trayvon, race, and class in the US of A in this BlackEnterprise.com interview:

“The fact [is] we have to get some type of legislation now.

“What do we want to see implemented to make sure this doesn’t happen again because y’know American culture, now that we’ve seen this happen it’s going to take something two-times as bad as this to even get peoples attention.”

h/t Colorlines

“The Frankenstein monster you created/Has turned against you, now you’re hated.”

by matttbastard

Mary Riddell:

London’s riots are not the Tupperware troubles of Greece or Spain, where the middle classes lash out against their day of reckoning. They are the proof that a section of young Britain – the stabbers, shooters, looters, chancers and their frightened acolytes – has fallen off the cliff-edge of a crumbling nation.

The failure of the markets goes hand in hand with human blight. Meanwhile, the view is gaining ground that social democracy, with its safety nets, its costly education and health care for all, is unsustainable in the bleak times ahead. The reality is that it is the only solution. After the Great Crash, Britain recalibrated, for a time. Income differentials fell, the welfare state was born and skills and growth increased.

That exact model is not replicable, but nor, as Adam Smith recognised, can a well-ordered society ever develop when a sizeable number of its members are miserable and, as a consequence, dangerous. This is not a gospel of determinism, for poverty does not ordain lawlessness. Nor, however, is it sufficient to heap contempt on the rioters as if they are a pariah caste.

Peter Oborne:

A great deal has been made over the past few days of the greed of the rioters for consumer goods, not least by Rotherham MP Denis MacShane who accurately remarked, “What the looters wanted was for a few minutes to enter the world of Sloane Street consumption.” This from a man who notoriously claimed £5,900 for eight laptops. Of course, as an MP he obtained these laptops legally through his expenses.

Yesterday, the veteran Labour MP Gerald Kaufman asked the Prime Minister to consider how these rioters can be “reclaimed” by society. Yes, this is indeed the same Gerald Kaufman who submitted a claim for three months’ expenses totalling £14,301.60, which included £8,865 for a Bang & Olufsen television.

Or take the Salford MP Hazel Blears, who has been loudly calling for draconian action against the looters. I find it very hard to make any kind of ethical distinction between Blears’s expense cheating and tax avoidance, and the straight robbery carried out by the looters.

The Prime Minister showed no sign that he understood that something stank about yesterday’s Commons debate. He spoke of morality, but only as something which applies to the very poor: “We will restore a stronger sense of morality and responsibility – in every town, in every street and in every estate.” He appeared not to grasp that this should apply to the rich and powerful as well.

Russell Brand:

Politicians don’t represent the interests of people who don’t vote. They barely care about the people who do vote. They look after the corporations who get them elected. Cameron only spoke out against News International when it became evident to us, US, the people, not to him (like Rose West, “He must’ve known”) that the newspapers Murdoch controlled were happy to desecrate the dead in the pursuit of another exploitative, distracting story.

Why am I surprised that these young people behave destructively, “mindlessly”, motivated only by self-interest? How should we describe the actions of the city bankers who brought our economy to its knees in 2010? Altruistic? Mindful? Kind? But then again, they do wear suits, so they deserve to be bailed out, perhaps that’s why not one of them has been imprisoned. And they got away with a lot more than a few fucking pairs of trainers.

These young people have no sense of community because they haven’t been given one. They have no stake in society because Cameron’s mentor Margaret Thatcher told us there’s no such thing.

If we don’t want our young people to tear apart our communities then don’t let people in power tear apart the values that hold our communities together.

Matthias Matthijs:

The 1980s were marked by a more traditional struggle between the state and organized labor. The present moment, however, is defined by a more disorganized class politics of reaction, propelled by huge inequalities and a perceived injustice and indifference by the state to the fate of those involved. This time it is also not about race. The looting youngsters in London are a mixture of both immigrants and English natives, and they have quickly and deliberately made their way into the fancier neighborhoods of the city. An incident from the much-gentrified Notting Hill neighborhood in London is particularly telling. Hooded rioters armed with bats invaded the Ledbury, a two-star Michelin restaurant, demanding that diners hand over their wallets and wedding rings. As two female rioters told the BBC, “We’re just showing the rich people we can do what we want.”

[…]

So class politics are back in what many political scientists see as their most traditional home: the United Kingdom. Most of the country perceives Cameron’s policies as the poor paying for the mistakes of the rich. Thatcher’s neoliberal medicine was equally unpopular in 1981, but she was under no illusions as to what was required to enforce austerity and remains famous to this day for having argued in a 1987 interview that “there [was] no such thing as society.” Cameron’s assumptions have been challenged by these riots, and it is not at all clear that he has an alternative to offer. The rest of the world should take notice: After all, the perverse experiment of high inequality, low growth, and now fiscal austerity is hardly a uniquely British phenomenon.

Cameron Tories Quietly Castigate Single Mothers: J.K. Rowling Brings Teh Pwn

by matttbastard

A kinder, gentler Conservative Party (UK)? That’s certainly the image Conservative leader David Cameron has been desperate to project ever since he took the reigns of the so-called ‘nasty party’.  But Harry Potter impresario (and single parent) J.K. Rowling isn’t buying the Tory’s New Labour Lite makeover. Rowling notes that despite the fuzzy rhetoric, Cameron’s Tories exhibit the same naked contempt for the poor they did during Maggie T’s tenure — especially towards poor women:

Yesterday’s Conservative manifesto makes it clear that the Tories aim for less governmental support for the needy, and more input from the “third sector”: charity. It also reiterates the flagship policy so proudly defended by David Cameron last weekend, that of “sticking up for marriage”. To this end, they promise a half-a-billion pound tax break for lower-income married couples, working out at £150 per annum.

I accept that my friends and I might be atypical. Maybe you know people who would legally bind themselves to another human being, for life, for an extra £150 a year? Perhaps you were contemplating leaving a loveless or abusive marriage, but underwent a change of heart on hearing about a possible £150 tax break? Anything is possible; but somehow, I doubt it. Even Mr Cameron seems to admit that he is offering nothing more than a token gesture when he tells us “it’s not the money, it’s the message”.

Nobody who has ever experienced the reality of poverty could say “it’s not the money, it’s the message”. When your flat has been broken into, and you cannot afford a locksmith, it is the money. When you are two pence short of a tin of baked beans, and your child is hungry, it is the money. When you find yourself contemplating shoplifting to get nappies, it is the money. If Mr Cameron’s only practical advice to women living in poverty, the sole carers of their children, is “get married, and we’ll give you £150”, he reveals himself to be completely ignorant of their true situation.

As they say, read the whole damn thing, then read it again — and, if you are a UK citizen of voting age, maybe think twice before uttering the foreboding words “I’ve never voted Tory before, but . . .”

h/t Chris Bertram

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Mary Jo.

by matttbastard

Amid the overwhelming coverage surrounding the historic passing of Sen. Ted Kennedy, one important name from his past has either been reduced to a footnote or, far too often, ignored completely: Mary Jo Kopechne, the civil rights activist and Kennedy aide who perished in a now-infamous 1969 car accident in Chappaquiddick, ME when a besotted Kennedy crashed his car into the ocean. The controversy surrounding these events would follow Kennedy throughout his career.

Melissa Lasky gives the 411:

Mary Jo wasn’t a right-wing talking point or a negative campaign slogan. She was a dedicated civil rights activist and political talent with a bright future — granted, whenever someone dies young, people sermonize about how he had a “bright future” ahead of him — but she actually did. She wasn’t afraid to defy convention (28 and unmarried, oh the horror!) or create her own career path based on her talents. She lived in Georgetown (where I grew up) and loved the Red Sox (we’ll forgive her for that). Then she got in a car driven by a 36-year-old senator with an alcohol problem and a cauldron full of demons, and wound up a controversial footnote in a dynasty.

We don’t know how much Kennedy was affected by her death, or what she’d have thought about arguably being a catalyst for the most successful Senate career in history. What we don’t know, as always, could fill a Metrodome.

Liss tries to balance the deserved accolades Kennedy has received for his lifelong work serving his constituents and the US with his despicable actions on that fateful day:

I suspect that Teddy, who knew himself well and could stare his flaws in the face, who carried the shame of his misdeeds in the furrow of his brow that never totally lightened even with a smile, also felt burdened by his own abuses of the privilege he knew he hadn’t earned. It was there; he couldn’t help himself using it, even when he knew he shouldn’t have. And it hung on him, as well it should have.

He’d made a terrible bargain with himself, too.

Teddy’s legacy, then, is complicated. A man of privilege, who used it cynically for his own benefit. A man of privilege, who used it generously to try to change the world. And maybe to salve his own conscience. Even as he believed fervently in the genuine rightness of his endeavors—and certainly would have, even if there wasn’t a scale to balance.

I have no tidy conclusion. It is what it is.

Daisy is far less charitable:

Sorry my dear liberal brothers and sisters, I respectfully sit this one out. Women first.

Further, as an alcoholic, I will not mourn a rich drunk allowed to make a deadly mistake and carry on as if nothing had happened.

I will mourn the working woman who was forgotten, as the actual circumstances of her death were covered up by a powerful family, who then arbitrarily assigned her slut status.

Imagine slowly, slowly drowning, water enveloping you inch by inch as you drown, waiting for the person to rescue you that never arrives.

Sorry, folks. Some things, I do not excuse.

Mary Jo represents all the nobody-women killed (or allowed to die, if you want to quibble over my terms) by all the powerful, rich men, because they were “evidence”–because they got in the way.

During this orgy of remembrance and sentimentality, of course, we won’t be hearing about her…once again, it will be considered somehow “rude” to mention Mary Jo Kopechne’s suspicious and untimely death. Well, let me be RUDE, then, and remind everyone that she existed. That she was a beautiful and lively woman, cherished by family and friends; she was a human being that was considered expendable by the Kennedy clan.

FUCK Ted Kennedy. Purgatory is hot, and he’ll be there awhile.

How this unresolved incident should affect the way we consider his legacy is, as noted by Will Bunch and myself, a difficult question that historians will likely struggle with for some time to come. Kennedy’s undeniably laudable accomplishments should not be allowed to mitigate his responsibility for and the subsequent irresponsibility and lack of accountability displayed following the death of Kopechne. That said, I’m not comfortable discounting a lifetime of tireless social justice advocacy and impactful legislating, no matter how horrible his actions were (should we solely refer to George Washington or Thomas Jefferson as racist slave owners, or Sen. Robert Byrd as a former KKK member at the expense of the overall historical record?)

Ultimately, like most truly great (though not necessarily morally upright) historical figures, an accurate summation of Sen. Kennedy’s life must take all aspects into account, even those we’d prefer to avoid; indeed, to merely indulge in hagiography does an unforgiveable disservice to both Kopechne’s memory and Kennedy’s.

Update: Welcome Feministing readers! Make sure to check out the latest thoughtful posts on Kennedy and Kopechne from Daisy and Bunch (much thanks for the linkage & kind words). [links corrected — mea culpa, is late.]

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Palin Resigns (ZOMG?!)

by matttbastard

Shorter: “You won’t have Palin to kick around any more!”

Yeah, yeah, I know — quitters never win.  Still, as Adele Stan warns, we (as in ‘progressives’) shouldn’t start singing the ‘na-na-na’ song just yet (h/t Jennifer Pozner):

For some reason, the very ambitious Sarah Palin finds the need to take herself out of public view. It’s hard not to speculate that there’s another shoe yet to drop. But don’t count her out; she’s as tenacious a political fighter as I’ve ever seen. She’ll no doubt put the time gained of her early exit from the governor’s mansion to good use — perhaps studying up on issues for her visits to the people of Iowa and New Hampshire.When I first speculated that she would be John McCain’s vice presidential pick, people said, Sarah who? Despite colossal missteps, she emerged from the 2008 presidential election as the darling of the Republican Party, her running mate returning to the Senate as a has-been. Mark my words: She’ll be back.

We (again, as in ‘progressives’) should remember what happened in 1968, after liberals and upper-class elites at the time had prematurely dismissed Sarah Palin’s political forefather, the man who wrote the book on exploiting class/racial grievance for electoral gain.

A book that the soon-to-be-former Governor of Alaska has studied well.

Much, much more over at Memeorandum.

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Adding Pikes and Tumbrils to the Populist Arsenal

by matttbastard

Hilzoy sharpens her pitchfork (what? Hil so owns a pitchfork — and, from what I’ve heard, has quite the loverly garden) and pins the AIG bonus issue–and out-of-touch Wall Street execs—to the wall:

[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!!!)

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Shoving a Jeroboam Straight Up David Brooks’ Backside

by matttbastard

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

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Sharpening the Pitchfork

by matttbastard

Oh FFS, part deux:

“Last February, an heir to the Johnson & Johnson fortune wrote on the Huffington Post, ‘For the mega-rich, recession brings with it the ability to live well at a lower cost and with less of a hassle.’

In Decemeber, Arianna Huffington’s daughter Christina came out at New York’s International Debutante Ball.* The organizer’s justification for the $14000 a table event: ‘Watches cost more.'”

Watches.

Cost.

More.

Buh?!

Ok, not to get all class war and shit, but. a FUCKING COMING OUT PARTY IN 2009 DURING A FUCKING RECESSION?! You know what? Fuck it — Sarah, via email (h/t), is absolutely fucking correct:

[T]hat’s exactly when we need to get all class war. Right now, when even my Republican parents are pissed about bailouts and CEO pay.

I mean,  an asymmetrical class war has already been going on for too fucking long (Tax cuts! Welfare reform! Deregulation!), only with hostilities coming from the top down–and they’ve been kicking our fucking asses. With all that wealth still concentrated at the VERY top,  it’s about goddamn time the little people finally started fighting back. Because it really, really says something that some people (even nominal progressives ) still have the fucking stones to throw $14,000/plate debutante balls during the worst economic crisis since the Great fucking Depression.

That’s it — I’m fucking done taking hunks of cake without question and pretending to like the taste. Time to import a non-violent modern variation of the French Revolution to North America post-fucking-haste.

*[insert tart observation about how not paying your writers really helps with the bottom line — and the coming out party expenses.]

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