Attacking The Root Problem

by: Paul Rosenberg

Sun Sep 21, 2008 at 15:23

Right now, we face three related problems: (1) the immediate financial crisis. (2) long-term economic mismanagement of the economy, and (3) the failure to build a progressive counter-hegemonic infrastructure that can mobilize to fight effectively at the moment of crisis.

As Kevin Phillips has pointed out repeatedly over the years, we've followed the path of previous world powers, and shifted from a manufacturing economy to a finance-based economy, which polarizes wealth and puts small elites sharply at odds with the great mass of the people.  This is the root of the long-term economic mismanagement problem.  Finance-heavy economies are inherently unstable, highly prone to boom-and-bust cycles. So-called "conservative" political philosophy has opposed the traditional conservative virtue of restraint, and principle of limiting risk, thus exacerbating the inherent risks, rather than limiting them.  And now they want to make things even worse.

Lacking the sort of counter-hegemonic infrastructure we really need to fight back effectively, we must rely on our wits and whatever we do have.  One thing we have is the afore-mentioned deep contradiction between the movement conservative ideology of the past 30 years and the supposed values of traditional conservatism.  It's well worth looking at them to see what good they can do us.

Paul Rosenberg :: Attacking The Root Problem
America didn't stop being a manufactuing economy because we stopped making things.  In fact, we still have a huge manufacturing sector.  It's just that it's small by comparison.  What's more, those who work in that sector may much, much less than they used to. It is no longer the engine of our economy.

The reason for this is simple: manufacturing core goods became too expensive, because we were paying people a decent living to make things.  It was much cheaper for the companies involved to ship manufacturing jobs overseas.  This did not sit well with the workers who lost their jobs, of course.  But because there were far more consumers of any one product than there were workers producing it, there was a ready path to sacking workers one industrial sector at a time, all the while justifying it in terms of "lower prices" for the much larger pool of consumers in general.

Of course this was always economically foolish in long-run terms, since every time a worker lost a high-paying job, there was that much less consumer demand to buy up the cheaper imports.  And this is where the finance sector got a good deal of its traction from: financing an increasing gap in what people could afford.  Originally, the Reagan tax-cuts were rationalized in terms of stimulating the economy by increasing savings and encouraging investment.

But this was absurd on its face.  If you wanted to encourage investment, then you'd do things like give investment tax credits--you could even raise marginal tax rates at the same time to keep the move revenus nuetral.  And, in fact, the result of the Reagan tax-cuts was not to increase savings and investment.  Indeed, savings rates drastically declined, and have never recovered since, but instead have eventually dropped to below zero:

This drop in savings rate is in part a reflection of the sharp transition between a multi-decade period after WII, when the New Deal economic bargain produced broadly egalitarian economic growth, and the Reaganite "Voodoo Economics" bargain that has predominated since 1980.  The difference between the distributgion of income gains in these two eras could not be more stark.

New Deal Economic Era

This is a picture of healthy economic growth, broadly shared.  Since the basis of a strong economy is the circulation of money, broadly-shared economic growth is a key ingredient in keeping the economy healthy.  This is what the New Deal bargain accomplished for a period of over 30 years.

Conservativwe Economic Era

This is a picture of unhealthy economic growth, narrowly focused on the most affluent.  Since the basis of a strong economy is the circulation of money, narrowly-focused economic growth is a major contributor to an economically unhealthy system.  This is what the conservative "Voodoo economics" bargain has accomplished for a period of almost 30 years now.

Minority Wealth Inequality

Minorities were especially hard hit by the subprime mortgage crisis, because their exclusion from the New Deal era of vastly increased home ownership deprived them of the major form of inherited family wealth.  With much less family wealth to draw on, the mortgage deal disproportionately offered to them in the conservative era was characteristically a much worse deal than that offered to whites in the New Deal era.

The Root Problem--And Solutions

In summary, the root problem of the last 30 years has been the lack of balanced growth benefitting all income levels of society.  So long as those on the bottom--and even the broad middle--lag so far behind those on top, the economy as a whole will not be healthy, finance will maintain an unhealthy dominance, and we will be highly vulnerable to repeated booms and busts, which will take a much more devastating toll on those below as opposed to those above.  Therefore, the most fundamental thing we need to do is to begin restoring the health of Main Street and the real economy, while subjecting Wall Street to strenuous regulations to reign it in, and make it serve the larger economy.

The following perscription from the Campaign for America's Future is a good broad-spectrum summary of what's needed:

Progressive Solutions

Impose new regulations on all parts of the financial system-limits on capital, leverage, exotic instruments, and compensation. The price of rescuing the financial system must be to get it back under control.

Strengthen the cop on the financial beat. We need regulators who will enforce the law, not scorn the responsibility they have.

Kick start the real economy, don't just bail out the banks. We need a public investment initiative to get the economy moving, investing in renewable energy, rebuilding green, extending unemployment insurance, helping cities and states avoid deep cuts in health care, police and fire services, and more.

You don't have to be a sophisticated economic analyst to understand what's going on here, at least in terms of the broad outlines.  And that's all that the political debate should be about.  Indeed, if we can maintain that focus, there won't even be a poltical debate.  It will be open and shut.

Quite simply put, there is nothing conservative--in the ordinary person's traditional understanding--about running a casino ecoenomy for three decades straight, when the vast majority of people keep falling further and further behind, only to end up bailing out the fat cats when the whole thing falls apart.  This is theivery, pure and simple.  And conservatives should be as mad about it as anyone else.  Madder, in fact, considering that it was all done in their name.

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Cop On The Beat (0.00 / 0)
     Number two, having regulators who will enforce the law, would only work if the voters refuse to elect candidates (Republicans and blue dog Democrats) who are in the tank for Big Business. So it's not a workable part of any plan. The simple truth is that the American voters are too stupid to be able to sustain a world class economy. They're more concerned about electing officials they'd like to have a beer with, who will drill for oil and stop gay marriage.

Why I'm wary of populists (0.00 / 0)
I often hear the argument that gays or minorities or choice (or science) need to be thrown under the bus in order to make the populist appeal to Bubba Nascarfan. I hope I don't start hearing that again this time around.

Conduct your own interview of Sarah Palin!

[ Parent ]
i'm queer, a minority, and a populist (4.00 / 4)
i happen to be the first two, and i'm the third because to be otherwise is just wrong.  It's classist.  Moreover, it's wrong to do it only in the United States.

That said, of course we're going to face homophobia and racism and xenophobia.  The challenge, as kovie outlined earlier, is to mount a populist movement that's inclusive rather than one that's not.  It's the same reason why people like me have been pissed that lgbt groups like HRC are basically single issue and don't pay all that much attention to issues of race, class, gender, nationality, etc.  Same reason Obama pisses me off on occasion for not being more of a populist (though I'll say that the juries still out on him since we don't know how he'll govern - as a centrist who crushes populists or as a centrist who's responsive to them).  And people in the intersections always get screwed - no matter what type of mobilizing is going on - class based, racial, gender, etc.  Until people acknowledge, like Audre Lorde said, that the house of difference is where we live- that we're all different from one another and that's what unites us- we're always going to be in this bind.  It's also a good reason to stop saying "minorities" and start saying "disempowered groups" or simply "movement base."  Women aren't even a minority by themselves.  If you add up all the people in the world that are screwed over, you get a far larger majority to work in, which is why the powers that be play divide and rule.

In short, populism is here, and it's going to be here, because of economic forces.  Those of us who are screwed over by social or economic or political hierarchies need to engage, take things in stride, undersatnd the difference bweteen someone who says something offensive because they don't know any better (i.e. organize them) and someone who says something offensive because they're a$$holes (i.e. Dick Cheney).

And it's a good thing.  Social movements tend to work hand in hand - it's not a coincidence that enormous progress for the poor, for the working class, for women, for lgbt people, for immigrants, and for nearly every other group in the United States happened within the same two decades.

Our decade or so is coming again, but green grass, blue skies, let's make it four.

[ Parent ]
Voters Didn't Say They Wanted To Have A Beer With Bush (4.00 / 1)
It was the TV pundits who said all that stupid shit.

Now, of course, you can blame the voters for not shooting said pundits full of buckshot, or running them out of town on a rail.  But most voters can't get anywhere near close enough to take such matters into their own hands.  So, at least they have a good excuse.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
i'd like to have a beer with bush (0.00 / 0)
i don't know how long he'd stay though.


[ Parent ]
Have A Beer (0.00 / 0)
     No, but it was an apt characterization of the attitude of a large group of voters, who found Bush's personality, as portrayed by the corporate media, more congenial than Gore's. And I think you'd be hard-pressed to find a presidential election in the last 30 years (since CNN began the 24/7 news cycle in 1980) in which the candidate who seemed to have a warmer personality (i.e. the guy you'd prefer to have a beer with) lost. Fortunately, I think that works to Obama's advantage this year. But it's a lousy way to pick a President.

[ Parent ]
But That Doesn't Make People Stupid (0.00 / 0)
That simply reflects hardwiring dating back to tens of thousands of years of evolutionary history, when we lived in small hunter/gatherer bands.

In that context, a genial individual, who could mediate and/or diffuse social tensions was a quite rational choice as a leader--certainly better than a domineering bully, which we've had far more of in our (written) history as a species.

Sure, that's not our reality today.  But overcoming evolutionary predispositions in not easy, nor is it simply a matter of being intelligent or not.  It takes institutional supports, and we don't have them.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Nor does it account for the social clues (0.00 / 0)
that make it easier for people not to participate in the political system.

This is changing a bit, but most characters in prime time TV are not politically active, and if they are, its generally presented as a negative, or futile, event.

"It sounds wrong...
     ...but its right."

[ Parent ]
Same can be said of the voting ballot (0.00 / 0)
"But most voters can't get anywhere near close enough to take such matters into their own hands. "

"It sounds wrong...
     ...but its right."

[ Parent ]
well i'm all for dismantling the nation-state framework (4.00 / 2)
but unless you can come up with a way to do that by tomorrow, who exactly do you want making decisions, a small crowd of wealthy people or the large masses?  I think it's time for the 95% of Americans who have been stomped on for a generation to stand up - and stand with people in the rest of the world.

When Britain's power finally receded, that's when you got the Harold Wilson Labour government that instituted a lot of Britain's social welfare network.  There's no reason we shouldn't demand the same now that the people who were in charge of finance have demonstrated that they're fundamentally incapable of running a country.

[ Parent ]
Continually changing small crowd that has earned the trust of the masses (0.00 / 0)
Thank you.

Just like the Constitution suggests.

"It sounds wrong...
     ...but its right."

[ Parent ]
how about (0.00 / 0)
continually changing large crowd that has earned the trust of themselves? What's wrong with social democracy? :)

[ Parent ]
Easier to attain consensus in a smaller groups (0.00 / 0)
The masses have their place in the mix, but running things by large committee is a recipe for inaction, I think.

We may be stuck on semantics.  What's "large", what's "small".  The US legislative branch is pretty large, once you count staff and embedded lobbyists.  But, does the US Congress actually "run the country"?  I have my doubts.


"It sounds wrong...
     ...but its right."

[ Parent ]
Easier to attain consensus in a smaller groups (0.00 / 0)
The masses have their place in the mix, but running things by large committee is a recipe for inaction, I think.

We may be stuck on semantics.  What's "large", what's "small".  The US legislative branch is pretty large, once you count staff and embedded lobbyists.  But, does the US Congress actually "run the country"?  I have my doubts.

Look, I'm  

"It sounds wrong...
     ...but its right."

[ Parent ]
Easier to attain consensus in a smaller groups (4.00 / 1)
The masses have their place in the mix, but running things by large committee is a recipe for inaction, I think.

We may be stuck on semantics.  What's "large", what's "small".  The US legislative branch is pretty large, once you count staff and embedded lobbyists.  But, does the US Congress actually "run the country"?  I have my doubts.

Look, I'm an  

"It sounds wrong...
     ...but its right."

[ Parent ]
anarchist at heart, so I'll always support smaller groups (4.00 / 1)
and more decentralized power structures.

I don't know what happened with the posting.  Some cntrl characters that I'm unaware of, perhaps?

"It sounds wrong...
     ...but its right."

[ Parent ]
yeah (0.00 / 0)
we should probably have a foucault discussion group and hash this out over some tea :)

[ Parent ]
the constitution sucks by the way (0.00 / 0)
it also allows the slave trade until 1808 and lets states decide if and when to treat human beings like human beings - at least it did until it was rewritten/reunderstood after the civil war.  we should stop worshipping it and start treating it like a text like we say about the bible.


[ Parent ]
I see the US Constitution as a living document that embodies an ideal (0.00 / 0)
of a free democracy. Sadly, I don't think the US has generally lived up to the potential of that document - just as many christians (and christian churches) have not lived up to the potential embodied in the bible.  Life is a process, and hopefully, that procress moves us (humans) toward the positive.  But, what do I know?  I'm just one small example of the humanity that managed to struggle and scrape our way up out of the primordial muck. I can read and I can communicate (somewhat ineffectively, to be sure) with other humans.  Is that the basis for a bright future?  I hope so, 'cause its what we got.

"It sounds wrong...
     ...but its right."

[ Parent ]
sure (0.00 / 0)
but why do we have to have a bright future with THIS constitution?  Most countries don't keep alive the illusion that they've relied on one document written 200 years ago :)  What's wrong with holding a constitutional convention when progressives have more power?  There are surely some things you would want to change without going through 2/3 of each hosue, the president, and i forget what percentage of the states.  Or a civil war.  Those seem to be the two primary ways of changing the constitution in major ways rapidly.

[ Parent ]
I'm not an expert, but I don't think most constitutions were written (4.00 / 1)
to last 200 years.  Obviously, the US consitution has been up-dated by ammendment.  Certainly, I'm not trying to put forth the illusion that the US has relied solely on that one document for over 200 years, much of our culture has little to do with the constitution.

I don't have any problem with a constitutional convention (even if "progressives" don't have more power). I think we should review the document every so often (25 years?) and do so with some means of direct input from the citizenry.  In fact, if I had my druthers, I'd like to see a Personal Constitution of some kind that every citizen signed onto; a personal pact with your fellow citizens that includes a delineation of what might be required of YOU as a citizen.  

"It sounds wrong...
     ...but its right."

[ Parent ]
Excellent Analysis (4.00 / 1)
I heard some of the things you are suggesting in Obama's speech today.

To me, it's about populism.  It's about trickle up.  It's companies realizing that you can't fire you best customers, the American people or give them minimum wage jobs.  For me, it's jobs, jobs, jobs.

Equilibrium Punctured (4.00 / 1)
You should check out Mark Blyth's Great Transformations, he talks about how economic crises have been used in order to alter the prevailing economic discourse in a country.

Basically his argument is that there is a difference between risk and uncertainty.  Economies tolerate risk because it's calculable, but uncertainty, where outcomes are subject to probabilities, kills economies because the only rational action is to do nothing.

Economic ideas allow uncertainty to be converted into risk.  In the 1970s the conservatives did this leading to the neo-liberal cluster... that we've today.

Now its the progressives turn to change the ideas that dominate economic discourse, and to attack the hegemony of the rich and powerful.

I have serious qualms about Obama on this.  I don't think  that he can do it, and that's why I'm so god.... disappointed with the present election. Obama sat down with Rubin for advise, argh....

I think that part of the answer is abolishing corporate income taxes..... and replacing them with a limited liability levy so that companies have to cough up a set percentage of net revenue in exchange for the service that the government renders in limiting their liability to market capitalization. Let them try to find a private insurer who will write them a policy limiting their liability for the same bargain price.

I'm not going to rehash everything, but over at European Tribune we've been talking about this.

By replacing a tax with a charge for services rendered that they can opt out of (and be subject to personal liability if they own stock in a company) we can change the discourse.  We can crush the illusion that the government is taking something from corporations when they ask them to pay the bill for their limited liability coverage.

you rememebr how everyone was worried that republicans would roll obama in the white house? (0.00 / 0)
how about we roll him instead?

[ Parent ]
It seems to me (4.00 / 1)
that few people (and fewer politicians) are awake to the, if you'll excuse me, paradigm shift that is occurring right under our noses. The Republican candidate is trying to present himself a strong regulator. Obama is using the word deregulator as a smear. Wall Street is seen as criminal.

It's sad that so many Dems are talking about going along with Bush when the time is ripe for some serious hardcore, progressive reforms.

[ Parent ]
The Didn't Notice The Paradigm Shift On Iraq (4.00 / 1)
They didn't notice the paradigm shift on Bush's popularity.  (Much less the idea of impeaching the bastard).  

They didn't notice the paradigm shift illegal wiretaps.

Why should they spoil their perfect record and suddenly start noticing what's happening in the country all around them?

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Thanks For The Book Tip (0.00 / 0)
Though, from the review I read on, I'm not sure about your interpretation of his take on the role of risk vs. Knightian uncertainty.

What interests me most is the combination of his building on Polyani's earlier work (revising it, obviously) and the fact that he's making an argument about economic hegemony.  It's also noteworthy, I think, how flimsy the foundations of the 1970s transformation was, intellectually.  Compare this:

Throughout Franklin Roosevelt's first administration, other economic theories, such as the administered prices thesis and "sound finance" (or as we call it today, balancing the federal budget), were tested. Business rejection of the National Recovery Administration and failure of sound finance in the crisis of 1937 led the Roosevelt administration to seize upon a fourth theory, the theory of underconsumption, to diagnose the continuing economic crisis as one of insufficient aggregate demand. Both labor and business came to support this approach....

with this:

A "new again" theoretical foundation was thus arrayed against activist government through the active sponsorship of the business sector. All that was left was the actual dismantling. Reagan used the refrain, "government is the problem," to win the 1980 presidential campaign and proceeded to roll back activist government on many fronts throughout the 1980s. A decade later, Clinton continued this reversal of the double movement by embracing deficit reduction (the sound finance rejected decades earlier by FDR), substantially reducing the welfare entitlement, and proclaiming that "the era of big government is over."

The result of this second great transformation in the U.S, according to Blyth, is a greater concentration in both income and wealth

It's glaringly obvious, however, that "sound finance" was observed much more closely during the Keynsian Era than it was during the "sound finance" era.  Indeed, Clinton was the only "sound finance" President who ever actually balanced a budget.  So the cognitive dissonance of the second "great transformaiton" is pretty damn intense, I'd have to say.

Cognitive dissonance is pretty damn high with Obama, too.  Grand claims of sweeping, transformational change accompanied by a big box shelf display of tiny policy gee gaws.  It somehow managed to make sense to folks with no grasp of what real historical transformation looked like, and suddenly this crisis is thrust on us all, and it's like 2 or 3 orders of magnitude larger than anything Obama's ever dreamed of talking about.

So, it's the Chinese curse: we live in interesting times.

The limited liability levy sounds interesting.  I've long thought we need to further restrict corporations, so that for-profits are mission-informed/constrained, the same way that non-profits are.  This is how it was in the beginning. Corporations were formed for specific purposes, such as building one particular bridge, or whatever.  But the idea here is that if you have a constraining purpose, then money-making isn't the only legal imerative, you imbue the organization with the institutional analogues of a conscience.

I don't expect miracles from that alone, but I do think it can be a useful part of an ensemble of fundamental reforms.  It's conceivable that your limited liability levy might be somewhat adjustable depeneding on a corporation's purpose, and performance measures, for example.  (This may or may not turn out to be a good idea in itself, I'm more interested in pointing to the potentially linking of different ideas, rather then specific advocacy.)

In short, once we "disenthral ourselves" as Lincoln put it, I think that there are a whole universe of previously undreamed of ideas that could help us build a more resilient and human economic order.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
I don't agree with Blyth on everything (0.00 / 0)
but I do appreciate the book.  But Polanyi ranks higher for me.

I do think that as part of a broader program that a limited liability levy could transform the economy.  For one thing it brings a lot of transactions back on the tax rolls, and makes it harder to cheat if we tax gross revenues as opposed to whatever money companies say that they made in profits.

A 25% levy on gross revenues would bring in around an extra $60 billion in annual tax revenue from Exxon Mobil alone......

A fairer approach may be to levy on market capitalization.  

[ Parent ]
Use the tax laws (4.00 / 1)
The tax cuts are a big part of why corporations started paying their top management so much money instead of retaining earnings for future expansion.  They are also the biggerst factpr in exacerbating income inequality.   Therefore, it is imperative that the next Congress:
-Restore the top brackets to 37.5% and 39%;
-Repeal the dividend tax cut for anyone making over $250,000 (this is  a big factor in companies' paying out income as dividends to top management;
-Freeze the estate tax exemption at this year's level, so estate taxes would begin after the first $2 million;
-Institute a .25% stock transfer tax ($2.50 per $1000) to raise money for the bailout and to curb excessive trading.

Then reform the financial industry by reinstating Glass-Steagall to separate investment banks from other financial institutions; require any company that gets money from the Fed to be regulated like a bank, with reserve requirements, leverage limitations and transparency.  End securitization of debt by anyone but a federal agency (Fannie and Freddie, which stay public).

These are the minimum, along with spending on infrastructure and alternative energy to kick-start the economy.  But we have to attack inequality head on.

John McCain--He's not who you think he is.

Wealth Tax (4.00 / 2)
Good ideas all but we need significant additional revenue.  

A return to Clinton era marginal tax rates even augmented by the stock transfer tax won't raise the necessary $700 billion.

What will do the trick is:

80% tax on intangible accumulated assets over $50 million.

[ Parent ]
these are good policy ideas (4.00 / 2)
but the broader need is for constituencies that will fight back on a constant basis.  That's a reason why social security is the third rail of american politics - because there's a large organized constituency that no one wants to touch.  So in addition to all this - which will restore confidence in the market and allow the stupid market people to start spouting off again about how the market takes care of everything (in say, a week or so?  maybe 1 year?  maybe 10 years?) we need to repeal the anti-union laws, stop the immigration raids, stop the divisive identity politics that the right pursued and pursue broader politics.

The financial crisis is a crisis for the elite - the rest of hte population has been in crisis for years.  This is an opportunity to do social movement building because there's a clear gap between the elite conversation and reality that everyone can see, including the elites.  

Without that movement base, and structural reforms, the policies will be pro-market but not people and the pro-people measures will be as easy for the conservatives who follow us to reverse as they will be for people to implement.

[ Parent ]
This Is Really A Key Point (0.00 / 0)
The financial crisis is a crisis for the elite - the rest of hte population has been in crisis for years.

As in, for example, all those folks who didn't have health care coverage when Clinton came into office in 1993, and still don't have it today.  And that's just one example.

Another: here in SoCal, the environmental health externalities of international trade amount to something on the order of $10-$20 billion/year.  The entire international trade system depends on massive externalization of costs, born mostly in the form of premature death.  It's not just here. In fact, we have it "easy," relatively speaking.  In China, it's most recently estimated that industrial pollution kills a staggering 750,000 people a year.

So, yeah, "permanent crisis" pretty much sums it up.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
All worthy short-term bandaids (4.00 / 1)
However, the next Congress and administration may be the last chance in generations to even discuss real root-level economic reform. You are absolutely right that tax law is what we should be looking at as the lever for change.

Historically, the Eisenhower era is still viewed fondly, especially by Republicans, as a time of prosperity and growth. At that time the marginal tax rate was 91 percent at the highest income levels. One result was a much, much smaller income gap. With the parasitic class held somewhat at bay, laborers with one income could afford to buy a house. Jobs were plentiful. The economy worked for everybody. If we want to return to such an economic environment, the critical path is a return to Eisenhower-era tax rates without the loopholes. All individual income sources are taxed that same, whether it's wages, dividends, interest, or something else. The only modification: lower rates for the lowest income levels.

On the corporate side, companies are encouraged to waste money on lobbying, executive salaries, etc, because those expenses are deductible. Replace the corporate income tax with a low-rate tax on revenues, irrespective of whether a profit is reported. If a company wants to pay its execs insane compensation, fine, but it won't lower their taxes one dime.

Well, one could wonk on about details, but those 2 moves along with yours, and maybe a Tobin tax on international money transfers, would build a foundation for change that matters over the longer term.

[ Parent ]
Great Overview (4.00 / 1)
This is a great summary of my views on this entire issue. There are two additional things I would add to this analysis: (1)President Nixon's authorization of HMOs and how the explosion of medical costs have negatively impacted the economy and further stripped the financial well-being of the poor and the middle-class; and (2) the complete failure of Congress to ensure the well-being of the average American citizen - they spend all of their time now either colluding with state governments to gerrymander safe seats for themselves or spending the rest of their time raising money (primarily from lobbyists) to ensure their continual re-election.  

Median and Mean (0.00 / 0)
It is hard to generate public support or outcry when the basic  economic statistics can be used to mask the real (in people terms) economy.
So as a first step in a long term, plan all headline government statistics should reflect the median and not the mean. The world would be different today if the nightly news had been reporting falling incomes three or four years ago. Government would have been forced to act much sooner if the median house price had been coupled with median incomes.

Although (0.00 / 0)
Median and mean household income both fell from 2000 to 2004. Here.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Second the developement of deep analysis, competeing progressive think tanks and funded research. (0.00 / 0)
These problem's aren't going to get easier.

I'm not sure why this isn't commented on, maybe it's the size of the problem and the "esoteric" nature of national finance, but its not rocket science. Paul has it accurately -

"This is thievery, pure and simple."

Naomi Klein's The Shock Doctrine: The Rise of Disaster Capitalism is one of the most important books of our time, and has a direct and distinct analysis of this. Create or merely be ready to take advantage of disastrous events, such as the collapse of a portion of the financial sector, and use the resulting state of shock (panic, disorder) to benefit the "powers that be."

If you haven't read it, or seen it discussed, one example is of course Katrina where the hurricane resulted in essentially ethnic cleansing, wage reductions and the transfer of large amounts of money. The Indonesian tsunami, where the villages all along the coast wiped out in the disaster, were relocated to camps in the interior, and the cleared shore front was transferred to wealthy homes and resorts.

The clarion call from Paul for the progressives to develop and have ready analysis and programs in these situations is right on the money. The lack of a coherent response is due in large part in the paltry nature of the organized left at this level, ie a progressive community of think tanks, with philosophical and material discussions. So that we are ready to offer solutions and warnings, such as this wholesale restructuring of debt, a transfer of wealth from taxpayers who are told "we cant afford" a healthcare system, but we can give Wall Street a trillion dollars, just as we have during the Savings and Loan scandal, and the trillion dollar Iraq war (profiteers).


The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky

Ok long time between start and post. Lots of posts here. . . (0.00 / 0)
and good ones too.


The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky

[ Parent ]
Read "The Predator State (4.00 / 1)
How Conservatives Abandoned the Free Market and Why Liberals Should Too"  By James K. Galbraith,  It is very readable and explains the basis of this crisis as well as anyone.  he is John Kenneth Galbraith's son and teaches econ at U of Texas.  He resurrects many of his father's ideas that helped in the past, like planning (now there's a thought!) and effective standards and regulation.  He's very good on explaining why markets don't really work for lots of things (like health care).  He ought to be in the mix sorting things out.

John McCain--He's not who you think he is.

[ Parent ]
Yeah, He's On Obama's Team (0.00 / 0)
But tucked away in the dugout, for some reason.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Naomi Klien just on Bill Maher on this crisis. (0.00 / 0)

"the most perfect booking we have ever had," Bill Maher says, Naomi Klein on Bill Maher, on You tube.


"The real disaster is about to come."


The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky

Somewhat peripheral, but... (0.00 / 0)
isn't "counter-hegemonic infrastructure" a contradiction in terms?  An infrastructure is by its nature hegemonic.  That being said, the Deleuze and Guattari [umm... if three books constitute a "trilogy," are two books a "bilogy?") duo of books on Capitalism and Schitzophrenia do present an alternate paradigm to that of the dominant culture.  Their premise is that capitalism is based on infinite debt, the upshot of which is that each individual "owes" the government such that s/he feels obligated to contribute to the economy.  The alternative they present could perhaps best be described as "galavanting" - and, in fact, I fail to see how it could be institutionalized at all.  Still, it's a worthwhile read and my provide insight.

Double Counter (0.00 / 0)
I mean "counter-hegemonic infrastructure" in two senses.  First, an infrastructure to counter hegemonic discourse.

In Gramsci's frame of reference it would be Marxist/working class vs. capitalist/bourgoise.  In mine, it would be democratic/egalitarian vs. authoritarian/hierarchical.

But the second sense is more along the lines of what you're pointing to--such an infrastucture would necessarily be guided by principles that are antithetical to how hegemony traditionally works.  It would be encouraging to fundamental questions, rather than stifling them.

But, of course, it's inevitable that some will experience this as repressive.  Bullies always resent being thwarted in their acts of intimidation.  And we would only be fooling ourselves to pretend that this was not part of the package.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Counter-hegemonic Infrastructure wrangling (0.00 / 0)
So... call me crazy, but wouldn't the internet qualify as such a structure?  Of course, that would be presuming all nodes are equal, but there's still a... well, shall we consider it a contact zone of various hegemonic discourses?

...because any discourse is by nature hegemonic.  The extent to which one may understand another depends upon the degree to which orientation/enculturation/socialization/language is shared.

Upon consideration, I think the counter-authoritarian, democratic, socially epistemological  field of discourses (including some that compete and some that gradually synthesize) bears some resemblance to the "cell" structure employed by... umm... terrorists, but hopefully without the penchant for indiscriminate violence.

So we're aiming for the whack-a-mole infrastructure where democracy flourishes in patches where authoritarian powers-that-be can't keep up?

I suspect I'm still not quite grasping your vision here.

I'm all for counter-hegemony up to the point my refrigerator ceases to function.  Call me weak-willed.  Or, better yet, provide an alternative I can conceive of.

Thanks for the stimulation, in any event.

[ Parent ]

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