Monday, August 29, 2011

US as Third World

On August 25 I had a post on Wall Street and how it bought and captured the institutions originally meant to ensure the public was served. I wrote then, and I say here again, the outsized role of the financial sector and the obscene, short-sighted, and shameless priorities of a reckless investor class, complete with unprecedented lack of accountability and legal liability, are at the heart of America's economic difficulties.

Corporate America's dominance of media and public discourse gloss over the fact that said financial dominance was what conservatives wanted; it was they that pushed through legislation favorable to the wealthy, investors (wealthy or not), and corporations. Conservatives, especially the wealthy variety, have gotten most of what they have wanted; lower taxes, fewer regulations, free movement of capital, lucrative defense contracts, and more.

Crap about how progressive agendas have hurt America are the imaginary domain of the ignorant. Union membership is now at negligible levels, far below similar countries. Labor unions have been weak for the last 30-odd years and getting weaker, just what  conservatives wanted.

New Deal legislation had made banking relatively safe and stable for generations. It was conservatives who said barriers between banking and finance were dated and holding us back. So Republicans in Congress overturned Glass-Steagall. Conservatives got what they wanted. Casino capitalism almost immediately ensued; financial meltdown soon followed. They wanted taxpayers to bail out the banks, and without any meaningful reform to prevent further catastrophes or undeserved enrichment. They got that too.

Wages for most workers have been flat for decades, precisely what conservatives have wanted. The US was a wage leader before Reagan; since then, wages for most have been flat. Conservative policy has been to suppress wages however possible. Conservatives got what they wanted.

The list goes on and on; our nation's richest and most powerful get what they want; favorable legislation, weak regulation, accommodating regulators, court rulings, and a compliant press. This should all be obvious to anyone who pays attention and doesn't walk on their knuckles. But reality struggles for attention in the face of a conservative noise machine that continually distracts voters.

Conservatives have also favored free trade, the mantra, the religion, the chiseled-in-stone gospel of laissez faire economics. It is front and center in the pantheon of conservative political economy, right up there with free markets. And here again, conservatives get what they want.

Conservatives, including Republican party operatives, rarely miss a chance to pimp free trade doctrine. American media usually goes along with Republican talking points. Even if one does find articles that dutifully report massive deficits, and even outsourcing, there are few coherent and visible efforts that explain the ramifications in detail and dare to analyze free trade as class warfare or why a lack of industrial policy is destroying us.

To get just an inkling of how international trade is playing out for the US, have a look at the figures below (Data are from Alan Tonelson's America's Increasingly Third World Trade Profile).

Below are the top ten US trade SURPLUS manufacturing categories for Jan.-June, 2011
(billions of current U.S. dollars)

Waste & scrap materials:  +$15.53
Spacial classification provisions:  +$11.44
Plastics & resins:  +$10.19
Soybeans:  +$8.81
Non-anthracite coal and petroleum gases:  +$7.18
Corn:  +$6.67
Wheat:  +$6.45
Cotton:  +$6.39
Misc. basic organic chemicals:  +$3.87
Non-poultry meat:  +$3.85

Next are the top ten US trade DEFICIT manufacturing categories for Jan.-June, 2011
(billions of current U.S. dollars)

Crude oil & gas:  --$121.13
Autos & light trucks:  --$37.82
Petroleum refinery products:  --$27.62
Computers:  --$22.50
Broadcast & wireless communication. equip.:  --$22.35
Goods returned to Canada & reimported:  --$21.47
Audio & video equipment:  --$15.80
Pharmaceuticals:  --$13.38
Telecommunications hardware:  --$12.72
Computer parts:  --$12.67

Notice a pattern? The US has become a big supplier of scrap and raw materials. Although the data do not show it, this is a substantial reversal of a few decades ago, when the US had a trade surplus in a variety of manufactures, especially high-end, high-tech goods.

Now look at the sectors with the biggest trade deficits. Except for oil, they are all manufactured goods that not long ago were among America's biggest contributors to what we once had, a trade surplus.

There is much to address here. My intention in future posts is to further explore issues in international trade and to demonstrate that America's free-trade ideology and the policies and practices that have resulted, are primarily in the interests of the overclass, have shaped corporate America to serve the interests of that overclass, but are damaging for the country as a whole.

Don't let conservatives tell you the US has a trade deficit because our taxes are too high, wages are too high, unions are too powerful, or regulations are too onerous.

They are wrong on every point.

Saturday, August 27, 2011

Facts Don't Matter

Ah yes, Fox News working its magic. Get a load of the guy in this video admitting that the facts on global warming are on Republican candidate John Huntsman's side. Texas Governor Rick Perry's comments "don't hold a lot of water, but it doesn't matter."

"Perry's gaining traction, facts or not."  

If ignorance is bliss, Perry must be ecstatic.

Thursday, August 25, 2011

Why Isn't Wall Street in Jail?

Here's Cenk Uygur with guest Matt Taibbi acknowledging that Wall Street is now above the law.

Taibbi, who is one of America's last remaining old-school journalists, the kind that actually investigate the issues that matter and the perps behind the issues, reports on what should be on the front page of every newspaper, but isn't: The Security and Exchange Commission has been routinely destroying data, including sensitive and potentially incriminating data, for years. And it isn't data on you and me, but the bankers, brokers, and hedgies, the ones who have been defrauding us.

So not only are no charges being brought against criminals on Wall Street, much of the primary evidence against them, thanks to an accommodating SEC, has been trashed, quite literally. As Taibbi writes:

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That story was in the August 17th edition of Rolling Stone, Taibbi's main haunt. There is, or should be, much more to this story. And, of course, much remains to be actually proven. But that is precisely what the media should be jumping on. Uncover the story one way or another. But we have a deadly combination of feckless media and embarrassing lack of citizen interest and knowledge. Considering all the Ritalin this country takes, you would think people could pay attention.

What do you want to bet this story goes nowhere? Republicans won't touch it because they don't care; they are ones that have largely emasculated the SEC anyway. and Obama is having enough trouble with moneyed interests as it is. He has decided he needs Wall Street's approval, so that quaint shit about equal application of the law is out the door.

Sunday, August 21, 2011

Raise Taxes? Reagan Would Have

Have a look at the chart below. Previous Presidents used a mixture of revenue and spending cuts over the years. Only Obama is being denied any chance to raise taxes. The taxes Obama did propose would have been the lowest in decades, far lower than Reagan, Bush I, and Clinton. He was called a socialist for it.

Instead, Republicans bitched and howled about the need to extend the Bush tax cuts for the rich, refused to consider any tax increases, despite claiming that deficit reduction was the most fantastically important thing in the world, and now blame Obama because of rising debt.

What the hell did they expect would happen?

Friday, August 19, 2011

Media: Once Bitten, Twice Shy on Texan Bloviators

It is gratifying that so many are already speaking out against Rick Perry and his Presidential campaign. This contrasts with Bush, where we suffered from a national press that acted like it was his lapdog.

Take, for example, that hotbed of Marxism, The Houston Chronicle, which has enough journalistic integrity to remind us that Texas's recent job creation has nothing to do with Rick Perry, though he is quick to claim credit.

According to their online edition, there are 10 reasons why:

1. Rising oil prices) Glad to see Texans admit that much of the wealth in their state was already there in the ground when they arrived; swaggering Republicans have nothing to do with it. (Same for Alaska, Sarah)

2. Government growth) Ouch, that one must be galling to Randian purists. But as the Chronicle notes, government jobs grew twice as fast as private sector jobs since 2000. Teabaggers aren't going to like that.  Such jobs expand the tax base, and create ancillary jobs in Texas just like everywhere else.

3. Military spending) The feds ratcheted up military spending since 2001, back when Bush the Lesser completely missed the 9/11 warning signs. But since that time, TX has had more than its share of taxpayers' money, from other states, pour into the state's huge military facilities.

4. No housing bubble) This is fairly involved. Read the Chronicle's take on it. But note the irony; Texas has strict regulations on mortgages. The downside is home ownership is very low, but hey, no disaster as in other states. Why? Because of strict and enforceable regulations, exactly what conservatives claim are a drag on the economy.

5. Cheap Immigrant labor) Now this is one area conservatives love; docile, cheap, non-unionized workers with few rights, no benefits, no pensions, no strikes, and no worker's comp claims (see chart below). And these low-paying and low-skilled jobs are a major portion of those Perry claims he created.

There are five more reasons, some of which Texas politicians could ostensibly take at least some credit, such as the state's high-tech industries. But the Chronicle's argument is that these too are long-standing conditions; maybe someone can take credit, but it ain't Perry.

As far as current conditions are concerned, Perry needs to explain his state's poor socio-demographic standing, as the chart below reveals (From

Not a record I would want to run on.

Monday, August 15, 2011

Wasn't the Last Texas Governor Bad Enough?

Rick Perry has announced he is running for President, to the delight of some, and the horror and disgust of others. So it looks like we are going to be hearing a lot more about this guy. Democrats, and his Republican opponents, will need to get out in front on Perry and his Texas Mirage. Don't wait for Obama to make the case.

Lets do a quick review of the Perry's record as Governor; the one he has already set about to distort. First, the folks at The American Dream, hardly a far-left bastion, offer 14 reasons why Perry would be a "really really bad President." Among them: Texas has the highest percentage of workers at the minimum wage of all 50 states. The site's main complaint is that Perry has raised taxes even while the state has increased its debt and failed to address unemployment, poverty, and poor educational achievement. The takeaway is that most Republicans are going to hesitate when they see his record.

Jason Cherkis writes that the "Texas Miracle" includes low-wage jobs, crowded homeless shelters, and budget shortfalls. Joshua Holland echoes this sentiment, warning us to get ready for a "boat-load of spin" as Perry's campaign strategy will be to distort his "abysmal economic record."

Finally, Paul Krugman notes a beggar-thy-neighbor element to Texas economic policy. Offering an appealing mix of jobs, low taxes, low wages, and cheap housing will attract both corporations and desperate workers.  As Krugman puts it:
What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.” The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs — which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice — involves a fallacy of composition: every state can’t lure jobs away from every other state.
We are only in the middle of 2011; the election is not until next year, ferchristsake. We'll be seeing Perry strut and swagger from here on out. He is a combination (as in the worst) of Michelle Bachmann and Mitt Romney.

Let the pushback begin.

Wednesday, August 10, 2011

US Bringing Up the Rear

Here is yet another study demonstrating how costly and inefficient the US health care system is. The full report, from Canada, is behind a paywall, but the abstract makes clear how "interacting with payers," what we would call paperwork or red tape, drives up costs dramatically in the US and how Canada is significantly less costly:
Physician practices, especially the small practices with just one or two physicians that are common in the United States, incur substantial costs in time and labor interacting with multiple insurance plans about claims, coverage, and billing for patient care and prescription drugs. We surveyed physicians and administrators in the province of Ontario, Canada, about time spent interacting with payers and compared the results with a national companion survey in the United States. We estimated physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency—just 27 percent of the $82,975 per physician per year spent in the United States...
This kind of shit is at the heart of our embarrassingly poor health care system. Much of the red tape relates to insurance companies jerking health-care providers around because they, the insurers, have profit margins to protect. What we rarely heard in the mainstream media during last year's health care debate was any recognition that the high cost of health care in the US is precisely the opposite of free marketeers' claims that competition and profit motive always improve service and drive down cost.

And the other side of that ideological shibboleth is that any government-run, socialized, or nationalized program, and that would certainly include anything so massive and complex as national health care, cannot be efficiently run, and is absolutely a terrible choice for freedom-loving Americans (cue the fireworks).

Once again, conservative ideology needs to explain itself to empirical reality. The United Kingdom has fully-nationalized health care. As reported in The Guardian on August 7, the UK's National Health Service, or NHS, is among the developed world's most efficient health care systems.

The "surprising" findings show the NHS saving more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland over 25 years. Among the 17 countries considered, the United States healthcare system was among the least efficient and effective.

Nothing surprising about it. The study merely confirms what other research has shown. Maybe they should have watched Michael Moore's Sicko. The irony to this is that Prime Minister David Cameron, of the Conservative Party, just came out and said that the NHS needs to foster more competition so it can be more competitive. You mean like the US?

Maybe Cameron is the one surprised; he should not have been. He should have read that report first.

The Guardian's story, with a link to the complete study (pdf), is here.

Saturday, August 6, 2011

And No Regulations Too

Wall Street says you can do better investing with them than with Social Security. Yes, you can... except when you don't.

Always More for Defense

The post below is originally from a blog called Southern Belle, who is rightfully disgusted that the US continues to spend vast amounts of money on defense. As always, Congress finds piles of it to spend on lucrative defense contracts, meaning your tax dollars going to upper management of corporate America and the investor class. They just can't break themselves from this gravy train. And Congress just can't muster the will to do the right thing. All this crap about shared sacrifice is a supremely obscene insult to anyone who cares to pay attention.

And remember, it is immoral socialism only when the jobless get unemployement benefits or the destitute get foodstamps. When corporate America gets $ billions for weapons we do not need, well, that is moral capitalism. So naturally they get tax breaks on top of it, too. It's only fair, you see.

"We don't need these weapon systems," you say?  Son, you are missing the point. The military brass is addicted to shit that blows things up and we enrich ourselves off that addiction because we can, just like those financial types on Wall Street. You could do it too if you just stopped caring about people that don't matter.
* * *
I am reproducing Southern Belle's article in its entirety. Go on over and read what else she has to say.

                       Because There’s Always Money For War!

WTF? We’re slashing budgets right and left, cutting back on “entitlements” and Medicaid and Pell Grants and having hissy fits over the paltry sums of money NPR receives, but we have a spare $7.5 billion to build nuclear bombs in Oak Ridge?

It’s a YES on the new bomb plant for Oak Ridge. Last Wednesday, the Department of Energy/National Nuclear Security Administration published its Record of Decision in the Federal Register. And the decision was no surprise: they selected the alternative they previously identified as their “preferred alternative;” a Uranium Processing Facility with the capacity to produce 80 nuclear secondaries per year.
The Record of Decision came on the heels of an audit performed by the Army Corps of Engineers that projected the cost of construction will soar to $7.5 billion. Of course, no one imagines costs will be constrained to that total over the next twelve years of construction. With half a billion dollars already spent on designing the facility and designers saying they are only 50% complete, it is clear that neither common sense nor fiscal responsibility will stand in the way of the bomb plant.

What the hell? Who are we building these bombs for? We already have more nuclear weapons than any other country on earth. What are we going to do, use them on some guys armed with box cutters? If 9/11 proved anything at all it’s what a colossal waste of money our Defense budget is. Anyone else remember how the big conversation pre-9/11 was the resurgence of the ridiculous “star wars” program?

It’s not just $7.5 billion for Oak Ridge, either. We’re set to spend $100 billion on a fleet of new ballistic missile launching submarines and $55 bilion on new bombers.

Why do we need these weapons? Who are we fighting? Who is the enemy? A bunch of men in pajamas in the hills of Waziristan riding around on donkeys? Are you kidding me?

I’m not the only one wondering:

At this stage in history, U.S. nuclear weapons serve no useful purpose other than preventing another nation from using nuclear weapons against the United States. And a study by two professors of military strategy at U.S. military colleges has suggested that that mission could be accomplished with roughly 300 warheads, compared with the 1,550 deployed warheads permitted under the New START treaty, and the roughly 5,000 currently in the U.S. stockpile if one counts all categories of non-deployed weapons. Going down to these levels would save additional billions in reduced operating and maintenance costs for the arsenal as a whole.
Not only have a growing list of former secretaries of state and defense, presidents and prime ministers, scientists and retired military officials called for the elimination of nuclear weapons, but if pushed by budgetary realities so would many current U.S. military leaders. While they won’t say so publicly, if forced to choose between nukes and major conventional systems it is my bet that nukes would lose out in that particular budget battle.

That wasn’t some pot-smoking DFH, that was William Hartung, director of the Arms and Security Project at the Center for International Policy.

It is the height of hypocrisy that Republicans and Conservadems like Joe Lieberman refuse to touch our Defense budget, yet keep crying about how the nation is broke. Oh my, we’re broke, we can’t pay our bills, oh dearest me, we’re just going to have to make grandpa go without his blood pressure medicine and grandma will have to eat cat food, what else can we do? Meanwhile we’re spending hundreds of billions of dollars on nonsense like this. We’re supposed to think of the jobs making those fighter jet engines, but somehow teachers and social workers don’t have real jobs?

This is insanity.

Thursday, August 4, 2011

Ass Backwards Anger

Yesterday I came across this little item posted on my Facebook page by a teabagger who has often posted or commented approvingly of teabagger nostrums. We'll call her Sal.

Sal had the following data posted on her FB page:
Salary of the US President ..................$400,000
Salary of retired US Presidents .............$180,000
Salary of House/Senate .......................$174,00​0
Salary of Speaker of the House ............$223,500
Salary of Majority/Minority Leaders ...... $193,400
Average Salary of Soldier DEPLOYED IN IRAQ $38,000
I think we found where the cuts should be made ! If you agree.. RE-POST
This is the sort of pointless, feel-good pablum that ignorant teabaggers cannot resist. It's identity and tribalism substituting for knowledge and analysis.

So let's see; in our multi-trillion dollar economy, the salaries of Congress and the President are budget-busters and must be cut; you know, to save the country. Most members of Congress could make more in the private sector; most will when they leave government. Let's be clear about this: Congressional pay is relatively low compared to what most members of Congress could be doing; law and lobbying are two lucrative choices. Some prefer to line their pockets at Fox News.

Most members of Congress are relatively wealthy. They did not go into politics for the salary; the graft, kickbacks, and influence-peddling, perhaps, but not the salary. And while most are wealthy, some are not. Suppose we did slash pay for elected officials. That would make Congress more of a rich man's club than it already is. Only those independently wealthy could afford to serve in Washington. I think we already have a serious problem of bright and able, but not rich, individuals spurning government service because of low pay.

I realize that may not make any sense to people who think we can fix education by cutting teachers' salaries and benefits.

Sal is correct in her concern over the plight of our troops serving in harm's way. She seems unconcerned about the massive amounts of money being spent on the twin rat holes in Iraq and Afghanistan. Corporate America loves a bloated defense industry and it loves war. Every bomb, every sortie, every meal, every piece of equipment and spare part represents profits for defense contractors.

Now I know full well we have legitimate national defense interests, so you teabaggers can stop soiling your pants. My disgust is with simpletons who lose all sense of perspective. I mean, how many times do we have to hear about how defense contractors have overrun cost projections and trot back to the Pentagon for more. "We figured $4 billion for this project, but we will need a few billion more." And they get it. Talking about gaming the system.

Where is the outrage when the Army is charged $800 for a wrench, or $2000 for a toilet seat? Where is the outrage when the Pentagon admits it cannot account for billions of dollars in cash, lost in Iraq? Or the fact that Donald Rumsfeld himself publicly stated that the Pentagon's accounting was so flawed that a total of $2.3 trillion could not be located?

Do you remember when he said this? Sept 10, 2001. Talk about being pushed off the front page by subsequent events! And that does not account for the disappearing billions in Iraq after 9/11. Here is the video explaining where teabaggers should be venting their pathological and misplaced rage:

So um... yeah, government wastes money. But getting worked up over salaries of our elected officials and ignoring the real costs inflicted on us by corporate America, special interests, and our increasingly powerful overclass requires willful ignorance from those who have their brain stuck up their ideological ass. Pull it out, clean it off and give it a chance to learn about the pitfalls of misinformed ideological sophistry.

The videos below is a parody starring the infamous Nathan Spewman, but makes the same points in a slightly different way (I see Ugly Betty is grown up and very un-ugly).

Part One

Part Two: