Monday, November 23, 2009

Ye Olde Split Between Top and MIddle

"Top" here means the White House and the Congressional leadership, whom Krugman describes as being pulled away from job creation and other recovery politics by the banks, who in a growing number of accounts have conquered the U.S. Government.   Max Keiser's "Goldman Sachs are scum . .. they've basically coopted the US Government, the US Treasury Department, the US Federal Reserve functionality, they've coopted Barack Obama" -the second part, about banker cooptation, apprears on the pages of many daily newspapers.

The middle - here rank-and-file Congressional Dems - rebelled a bit.  They passed a measure in the House Finance Committee requiring an audit of the Fed's many enormous bailouts of insolvent banks, whose sums and recipients remain undisclosed. They passed the measure over the opposition of House Finance Committee Chair Barney Frank.

There are lots of good ideas around about how to fix things.  One of many examples is Dean Baker's idea of how to actually go about revaluing the Chinese yuan. The problem isn't that nobody knows what to do, that it's all so complicated. The problem is that the top doesn't want to do the things that could be done to fix things.  These things would cost them money.  

The outcome is the sort of phony helplessness that now pervades US policy in finance, job creation, higher education - take your pick.  It only works on the assumption that most of us are pretty dumb.

Saturday, November 14, 2009

Disaster in Plain Sight

It's interesting to see the category "financial elites" used as a natural object by the New York Times. On top of that, Bob Herbert nicely summarizes the clearly visible problem with the current "recovery":
It was the financial elites who took the economy down, and it was ordinary working people, the longtime natural constituents of the Democratic Party, who were buried in the rubble. Mr. Obama and the Democrats have been unconscionably slow in riding to the rescue of those millions of Americans struggling with the curse of joblessness.
Amidst an underemployment rate of about 25% for Blacks and Latinos, and a poverty rate of 35% for Black children, "Wall Street can boast about recovery all it wants, [but] much of America remains trapped in economic hell."

I think it's worse than that, actually.  The "investment" and "employment" economies have been divided for some time: attempts to save the company by firing workers, the national stroke of managerial genius of the 1970s, became attempts to loft the stock price by firing workers.  The markets divorced the industrial employment base a long time ago,and they have long gone in opposite directions.  The crisis has given the financial sector the chance to perform the most complete dumping of the employment economy in modern history.  It's not sustainable, but finance doesn't care.  Without some kind of upheaval, by the time the political sector shifts a little emphasis back to the employment economy,  all of the political sector's money will be gone.

Sunday, November 08, 2009

Dismal Dems

Driving the point home about the failing Democrats, John Nichols blogs in the Nation that Obama and the Congressional Dims "continue to make the mistake of treating unemployment as an afterthought rather than the most serious issue facing the nation."  Writing about last week's Republican victories, he points out that " in New Jersey and especially in Virginia, where Republican candidates in high-profile races focused tightly on economic issues and job creation, they won." And Fr. Frank's Sunday sermon notes,
The system is going back to the way it was with a vengeance, against a backdrop of despair. As the unemployment rate crossed the 10 percent threshold at week’s end, we learned that bankers were helping themselves not just to bonuses as large as those at the bubble’s peak but to early allotments of H1N1 vaccine.  . . . both parties have their own delusions, not the least of which is the Republicans’ conviction that Tuesday was a referendum on what Obama has done so far. If anything, it was a judgment on just how much he has not.

Friday, November 06, 2009

Unhappy Obama Anniversary

It's Obama's one-year birthday as president and I like many others am not celebrating this week.  Afghanistan escalation, Guantanamo closure, the ongoing fiasco in Honduras,  non-existent financial reform, health care with no public option, you name it.   The middle-classes are shrinking and falling as before.  Obamanomics has split Main Street off from Wall Street in order to protect Wall Street, which is busy reinflating various bubbles and is back paying its people like an aristocracy superior to everyone else on earth.  Public higher education is sinking fast.  As Avery put it, what in practice is better after a year of Obama than before?

There are no doubt federal institutions that are better because they are no longer being run by sworn enemies of government.  There are many many fewer appearances by George W. Bush. There are no doubt improvements in the judiciary.  But the top-level decisions have been uniformly disappointing.

This impression is beginning to circulate in Europe as well.  The American economist Jeff Madrick had an interview published in Le Monde on November 4 in which he deplored Obama's reflexive attempt to find the middle way even if it is a dead end.   The problem is not that Obama compromises too easily, but that he is what Cass Sunstein a while ago called a "Chicago Democrat." He wants government to set some rules for a "market" that he conceives to be the source of all economic value and which therefore must be as free as possible. In practice this means as unregulated and as unaccountable as possible.  This is exactly what we are getting.

See Paul Krugman's mournful description of Obama's strategy, which might be called "one bridge too few."  "The Democratic base, so energized last year, has lost much of its passion, at least partly because the administration’s soft-touch approach to Wall Street has seemed to many like a betrayal of their ideals." discusses statistically visible "democratic disgruntlement" -
Current data showing strong disapproval of the Democratic-led Congress by rank-and-file Democrats could be given voice as follows: I realize that when Democrats first took control of Congress, Bush was still President, and Congress, even though dominated by Democratic partisans, had their hands tied. But now, with Obama as president and increased majorities in Congress, you're still not getting stuff done that I care about? And, when are you guys (expletive deleted) gonna focus on what we need most—jobs! You wanted complete control, and that's what you finally have. And this is what we get?!
I stick to my description one year ago of Obama One, a near-reincarnation of Bill Clinton.  The proposed gutting of Sarbanes-Oxley this week - by Democrats - may become a fitting monument.  When we face this fact, we may really get back to working on something better.  Grace Lee Boggs had a nice passage on this.
I think that the only answer to the counterrevolution . . .  is to begin creating a new concept of hope, not to talk about recovery. We don’t need to go back to a society that is concentrated on economic growth, that dehumanizes us, that makes us consumers only and is threatening all life on this planet. We need to be thinking about something new.

Sunday, November 01, 2009

Warlord Schoolboy

I'd almost forgotten what a dunce David Schoolboy Brooks is because I never read him anymore, but this terrible piece was somehow unavoidable.  In it, Schoolboy offers no actual argument for escalating in Afghanistan. He just refers to unnamed gladiators like himself to taunt and bully Obama with that great question of modern statecraft: "are you man enough to go to war"?

Glenn Greenwald has previously sent Schoolboy to the corner for chest-beating in class.  He does it again this time (as does Amy Davidson at the New Yorker), so I'm reluctant to mention the man again.  The problem is that Schoolboy spent the Bush years not only defending all pointless invasions but also establishing himself as the national spokesperson for middle-class values.  In other words, he has specialized in defining extreme right-wing positions - particularly military conflict-resolution and economic plutocracy - as the foundation of bourgeois utopia. 

A few people call Schoolboy on this publicly, and Greenwald is exemplary in railing tirelessly against the weird, myopic hypocrisy of media and political elites who are happy to spend money we don't have for war but not for health care.  To me they sound like the clueless leaders of France during Napoleon III's mid-19th century Second Empire, a period when France should have been democratizing and developing its social capacities for various kinds of economic and social development, and when it instead became increasingly militaristic and economically second-rate.  Schoolboy's term "tenacity" accidentally invoked not Churchill but Nixon in Vietnam.  The middle-class lets people like Brooks speak for it only at its own mortal peril.

Schoolboy published the day after his own paper shone yet another light into the cesspool of Afghan leadership with a story revealing that Ahmed Wali Karzai, already suspected of being a major opium trafficker, is a CIA operative who helps them run a paramilitary force in Kahdahar province. The past couple of weeks have seen increasing exposure of Afghan and "AfPak" reality, including Jane Mayer's report that the CIA is also running a U.S. drone campaign in Pakistan (see also UN Special Rapporteur Philip Alston), Secretary of State Hilary Clinton's unpopular visit to Pakistan, marked by the market bombing in Peshawar (and Clinton pushing "the button on a computer that randomly chose more than 700 lottery winners"),  and the U.S. visit of Afghan democracy activist Malalai Joya, whose book, A Woman Among Warlords, is a reminder of the costs of the real-world version of the armchair warlord schoolboys.