Manufacturing and trade news do not get much coverage in our mainstream press. Japanese obsess over trade data, as do the Chinese, Koreans, and most others who take manufacturing seriously. This is obvious from reading any of the mainstream and business-oriented newspapers overseas.
Ours? The focus is more on Wall Street, corporate profits, and finance. Our corporate media does not want to spend much time on the implications of large, chronic, and structural trade deficits, except for the predictable paeans to free trade, how much we benefit, and how boorishly stupid you are if you are not a committed free trader. Honest analyses of how we arrived at our current condition are rare; most commentary is ideologically driven tripe that contends workers are overpaid and investors need more profits.
To be sure, we have all read of the decline of American manufacturing. And for those who are determined to know, many websites and blogs, especially those hosted by academics, cover these subjects very well. But while complaints about Chinese currency manipulation and the hazards of doing business in China do get coverage, little is said in the mainstream media about the role of American corporations and how they turned over technology and manufacturing to China and other trade competitors, all in an effort to tap cheap labor, ignore the challenges and capital requirements of advanced manufacturing, boost short-term profits, and please the investor class.
As Chinese wages continue to climb, we are now seeing some evidence of a pick-up in US manufacturing. But a central conundrum remains: Should it be a matter of policy to promote the return of manufacturing to the US? Or is the market going to resolve domestic manufacturing, and perhaps give a boost to exports, without policy intervention?
It is hard to get enthusiastic about an improving manufacturing sector, especially in the face of new data. I once would have welcomed it more openly, but it is becoming increasingly clear that a global economy or neo-mercantilist trading partners are only secondary reasons. In other words, less blame should be attributed to cheap labor in China and more to the desire for cheap labor in the US. The current condition of the US, complete with massive trade and current account deficits, is the direct result of wealthy and well-connected purveyors of neo-liberal free markets. It is they who have hobbled government's essential regulatory role (derivatives anyone?) and facilitated the dominance of finance and the rentier class.
So there is little reason to think that newly created manufacturing jobs are going to pay very well. Neo-liberal policy wonks, along with right-wing politicians, have had a 30+ year run promoting ideas, policies, and legislation that has weakened labor unions, kept minimum wages low, undermined workers' rights and put into place an elaborate tax code that ensures that corporations will largely avoid taxes. All of that in addition to the glories of free and unfettered international trade.
All of which was always the goal. To the extent that corporations locate or relocate manufacturing in the US, it will only be in response to low wages, obscene tax giveaways from states, the absence of unions, and elaborate agreements with government officials that ensure corporations will continue to privatize the benefits and socialize that costs. If manufacturing does meaningfully increase in the US, it will only be
because wages have been driven down. If wages go up, even in accordance
with productivity gains, corporations will threaten to off-shore
production once again.
Showing posts with label regulation. Show all posts
Showing posts with label regulation. Show all posts
Tuesday, July 9, 2013
Thursday, December 13, 2012
Tax the Traders
Here is an idea that is slowly gaining ground, though I don't suspect our corporate-owned media wants to spend much time on it. As if Wall Street didn't hate him enough already, Eliot Spitzer recently made the case that Wall Street traders should be taxed.
As Spitzer says:
Elliot Spitzer is spot-on when he concludes:
As Spitzer says:
This one is not so new; it has been around for a long time, supported by a wide range of economists, including Nobel laureate James Tobin, as well as advocates, including Ralph Nader in the Washington Post this weekend, and elected officials: a tax on financial transactions. It will give us gobs of revenue. It will fall on a sector that has generated enormous and unwarranted profits for a very few, who at the same time have benefited from huge bailouts and regulatory help and largely escaped any responsibility for their central role in creating the financial cataclysm that we are still struggling with.
Here is the idea: A tax of less than half a percent on every $100 of stock sales or sales of other financial instruments including bonds, derivatives, and options. The tax could raise anywhere from $170 billion to $350 billion per year depending how it was applied. Extend that over 10 years, and we are raising almost what the White House and Republicans agree needs to be raised in order to accomplish the objectives of a grand bargain.
The exact amount is open for debate; Spitzer says 1/2 of a percent per $100 of trade value. Others have said a flat 1% or $.10 per trade. The amount raised would be highly significant in each case. The key would be to set the tax at a low enough rate that small investors would hardly notice, but make it high enough so that high-frequency program traders on Wall Street would think twice about the speculative casino they have created. In other words, impose a tax that compels Wall Street to contribute more and take less, and at the same time encourage actual investing, and with longer-term outlooks.
Right, but don't hold your breath. The investor class and the politicians they control are not into doing the right thing, they are into money and power. For them, the current system works well.The application of this concept to the financial sector could solve our need for revenue, bring some sanity back into the financial sector, and give us a way to raise the revenue we need to run the government in a fiscally responsible way. Maybe this is the old idea that we need folks in D.C. to pay attention to again.
Wednesday, December 5, 2012
Dixification
I am pleased, if that is the right word, to see a growing chorus of criticism about not just the direction this country is headed, but the very specific reasons why. Some point to the eroding infrastructure, and characterize it, too vaguely I believe, as "economic decline." It is, but without detailing why such decline is happening, such assertions have limited utility.
Others are closer to the point when they talk of the US becoming "third world." They don't mean a lack of technology or development, but instead point to economic inequality and a political economy dominated by a well-entrenched landed-gentry-cum-oligarchs; e.g., an aristocratic overclass.
Those who know their American history, the history we did not learn in high school, are well aware this country was built on cultural fault lines from the very beginning. Talk of secession was in the air, and has remained there, from the earliest days of the Republic. If you didn't hear much about secession growing up, and thought it was just that one flare-up called the Civil War, it's probably because you were not born in the south, or in Texas.
But this is not about secession; it's about southern economics, or Dixiefication. A recent article by Nicholas Kristof in the New York Times takes an important leap in fleshing out what has gone wrong in the US in the last 30+ years.
Kristof writes of the last 30+ years of conservative influence as a "failed experiment."
Slavery may be gone, but much of the rest of Dixie model not only has remained, it has spread to other states, mostly in the Midwest and Appalachia. A sense of where I am coming from on this can be found in Democracy Heading South: National Politics in the Shadow of Dixie, (2001) and Dixie Rising: How the South is Shaping American Values, Politics, and Culture, (1996) by Peter Applebome. A study I have mentioned before, Colin Woodward's American Nations, provides an invaluable historical backdrop to explain how we got this way.
A sense of that Southern model, what I am calling Dixification, can be seen in a litany of examples. Kristof provides a few:
Recent data shows just how badly the middle class has been squeezed. As CNNMoney just reported (my emphasis):
Others are closer to the point when they talk of the US becoming "third world." They don't mean a lack of technology or development, but instead point to economic inequality and a political economy dominated by a well-entrenched landed-gentry-cum-oligarchs; e.g., an aristocratic overclass.
Those who know their American history, the history we did not learn in high school, are well aware this country was built on cultural fault lines from the very beginning. Talk of secession was in the air, and has remained there, from the earliest days of the Republic. If you didn't hear much about secession growing up, and thought it was just that one flare-up called the Civil War, it's probably because you were not born in the south, or in Texas.
But this is not about secession; it's about southern economics, or Dixiefication. A recent article by Nicholas Kristof in the New York Times takes an important leap in fleshing out what has gone wrong in the US in the last 30+ years.
Kristof writes of the last 30+ years of conservative influence as a "failed experiment."
Kristof notes that demand for household generators has surged. Most of them are being scooped up by upper-middle class families that can afford the generator and the gas that goes with it....In upper-middle-class suburbs on the East Coast, the newest must-have isn’t a $7,500 Sub-Zero refrigerator. It’s a standby generator that automatically flips on backup power to an entire house when the electrical grid goes out.
In part, that’s a legacy of Hurricane Sandy. Such a system can cost well over $10,000, but many families are fed up with losing power again and again...
...the lust for generators is a reflection of our antiquated electrical grid and failure to address climate change. The American Society of Civil Engineers gave our grid , prone to bottlenecks and blackouts, a grade of D+ in 2009.
That’s how things often work in America. Half-a-century of tax cuts focused on the wealthiest Americans leave us with third-rate public services, leading the wealthy to develop inefficient private workarounds.
But our political system is dysfunctional: in addressing income inequality, in confronting climate change and in maintaining national infrastructure.Indeed it it dysfunctional. But government is not a mess because people do not know what to do. We are being purposefully pushed in one direction because of deeply held ideological beliefs and the policies that reflect that ideology. That belief system is familiar to those raised in the deep south. It is based on class, race, hierarchy, tribalism, and an obsequious allegiance to authority. The result is that the plantation mentality of the colonial south, where cruel slave masters from Barbados established themselves far from the prying eyes of Yankee do-gooders, and created a feudal society dominated by a privileged few. In other words, a society much like the old one they left behind in Europe, one structured on wealth, privilege, and class. Democracy and equality before the law had nothing to do with it. Mouth breather Ted Nugent, who appears increasingly unstable these days, epitomizes this brutally undemocratic attitude when he says that poor people and those on welfare should be denied the right to vote.
Slavery may be gone, but much of the rest of Dixie model not only has remained, it has spread to other states, mostly in the Midwest and Appalachia. A sense of where I am coming from on this can be found in Democracy Heading South: National Politics in the Shadow of Dixie, (2001) and Dixie Rising: How the South is Shaping American Values, Politics, and Culture, (1996) by Peter Applebome. A study I have mentioned before, Colin Woodward's American Nations, provides an invaluable historical backdrop to explain how we got this way.
A sense of that Southern model, what I am calling Dixification, can be seen in a litany of examples. Kristof provides a few:
So time and again, we see the decline of public services accompanied by the rise of private workarounds for the wealthy.
Is crime a problem? Well, rather than pay for better policing, move to a gated community with private security guards!
Are public schools failing? Well, superb private schools have spaces for a mere $40,000 per child per year.
Public libraries closing branches and cutting hours? Well, buy your own books and magazines!
Are public parks — even our awesome national parks, dubbed “America’s best idea” and the quintessential “public good” — suffering from budget cuts? Don’t whine. Just buy a weekend home in the country!
Public playgrounds and tennis courts decrepit? Never mind — just join a private tennis club!
I’m used to seeing this mind-set in developing countries like Chad or Pakistan, where the feudal rich make do behind high walls topped with shards of glass; increasingly, I see it in our country. The disregard for public goods was epitomized by Mitt Romney’s call to end financing of public broadcasting.You got it, Kristof. At its core, Dixification means disdain for the public sector, but also low wages, low regulations, and low taxes. It calls for a dominant class run by corporations, the modern version of the plantation's boss man; land owners and sharecroppers, feudal overlords and a peasantry.
Recent data shows just how badly the middle class has been squeezed. As CNNMoney just reported (my emphasis):
Corporate profits hit their highest percentage of GDP on record in the third quarter.
Just four years after the worst shock to the economy since the Great Depression, U.S. corporate profits are stronger than ever.
In the third quarter, corporate earnings were $1.75 trillion, up 18.6% from a year ago, according to last week's gross domestic product report. That took after-tax profits to their greatest percentage of GDP in history.
But the record profits come at the same time that workers' wages have fallen to their lowest-ever share of GDP.Welcome to Dixie.
Friday, March 23, 2012
Lying: An Unregulated Industry
We keep hearing the same theme on the Republican campaign trail, the same tired bromide about how government weighs heavily on the private sector, the onerous regulations that sap our energy, and the ruinous taxes that undermine private initiative. And of course, all of this is what President Obama wants, because liberals, especially the foreign-born dark ones, want bureaucrats to take over the economy. That's why there are fewer civil servants now than when Obama assumed office. He wanted to destroy the big banks, which is why he rescued them. And his anti-corporate mentality explains not only that GM is turning profits and cutting paychecks, but that corporate profits are way up, as is the stock market. Private sector job creation has steadily climbed, despite Obama's confiscatory socialism. And he wants to drive up oil prices, which is why domestic oil production-and domestic drilling permits-- have increased every year since Bush left office, the same year Wall Street triggered the recession.
For some people, in other words, facts don't matter. Not even to presidential candidates. We have been subjected to a barrage of rhetoric that says essentially two things: 1) taxes are too high, and that is half the reason why the economy is sluggish, and 2) regulations are too numerous and burdensome, which is the other half. The solution? It's simple. In the Manichean mind of Republicanism, all policy prescriptions are simple; cut taxes and regulations.
Never mind that we already have the lowest taxes in the OECD; no where else are the very wealthy able to protect so much of their money. And that nonsense about corporate taxes at a ruinous 35%? I addressed that here. Union death-grip on the economy? The United States has the lowest union membership in the entire OECD. And it has been steadily declining, exactly what conservatives have always wanted. And we have the cheapest gasoline in the OECD as well.
But that campaign theme, the one about unleashing the private sector by gutting taxes and government? None of the four Republicans left standing (OK, Paul and Gingrich are on their knees) ever misses a chance to tell voters that fewer corporate regulations means freedom for us all. We are left with a truism that Republicans have understood better than Democrats: you can get enough people, not all, but enough of them, to believe outrageous and nonsensical tripe if you just repeat it enough, preferably with confidence and conviction, if not outright rage.
Now for some reality. According to Ifo Institute for Economic Research at the University of Munich, in a study that compiled World Bank data, and entitled Business Regulation in International Comparison (available here), the United States is a mighty fine place to do business. The US is suffering, and fares poorly when broad demographic data are compared to similar OECD members, but when it comes to business getting what it wants, the US scored higher than any other large country. It was third overall (among a total of 30 OECD and non-OECD countries), bested marginally by smallish New Zealand and Singapore.
The US scored highest in category 5 -protecting investors- confirming the charge that government prioritizes the interests of the investor class. And we were fourth-best, right up there with the two authoritarian states, Hong Kong and Singapore, when it came to the relative ease of starting a business. The real kicker is that the US was also ranked fourth-best when it came to hiring and firing workers, where nations scored high if business was able to fire workers easily and avoid costly penalties and benefits.
Republicans like Romney and Santorum have been telling us that they will unleash the private sector from that horrid Obama, and they will do it by ever more tax cuts, ever fewer regulations.
They are full of shit. The reality is almost the complete opposite of their fact-free narrative. If suppressing working-class wages and unions, enabling and subsidizing the welfare queens on Wall Street, cutting taxes for the investor class, and letting management compensation run wild were the appropriate policy tools, Wall Street would not have crashed and we would not have had the recession in the first place.
If you know anything about economic history, you know that we have been on this path for decades. And all the Republican candidates can do is call for more of it.
For some people, in other words, facts don't matter. Not even to presidential candidates. We have been subjected to a barrage of rhetoric that says essentially two things: 1) taxes are too high, and that is half the reason why the economy is sluggish, and 2) regulations are too numerous and burdensome, which is the other half. The solution? It's simple. In the Manichean mind of Republicanism, all policy prescriptions are simple; cut taxes and regulations.
Never mind that we already have the lowest taxes in the OECD; no where else are the very wealthy able to protect so much of their money. And that nonsense about corporate taxes at a ruinous 35%? I addressed that here. Union death-grip on the economy? The United States has the lowest union membership in the entire OECD. And it has been steadily declining, exactly what conservatives have always wanted. And we have the cheapest gasoline in the OECD as well.
But that campaign theme, the one about unleashing the private sector by gutting taxes and government? None of the four Republicans left standing (OK, Paul and Gingrich are on their knees) ever misses a chance to tell voters that fewer corporate regulations means freedom for us all. We are left with a truism that Republicans have understood better than Democrats: you can get enough people, not all, but enough of them, to believe outrageous and nonsensical tripe if you just repeat it enough, preferably with confidence and conviction, if not outright rage.
Now for some reality. According to Ifo Institute for Economic Research at the University of Munich, in a study that compiled World Bank data, and entitled Business Regulation in International Comparison (available here), the United States is a mighty fine place to do business. The US is suffering, and fares poorly when broad demographic data are compared to similar OECD members, but when it comes to business getting what it wants, the US scored higher than any other large country. It was third overall (among a total of 30 OECD and non-OECD countries), bested marginally by smallish New Zealand and Singapore.
The US scored highest in category 5 -protecting investors- confirming the charge that government prioritizes the interests of the investor class. And we were fourth-best, right up there with the two authoritarian states, Hong Kong and Singapore, when it came to the relative ease of starting a business. The real kicker is that the US was also ranked fourth-best when it came to hiring and firing workers, where nations scored high if business was able to fire workers easily and avoid costly penalties and benefits.
Republicans like Romney and Santorum have been telling us that they will unleash the private sector from that horrid Obama, and they will do it by ever more tax cuts, ever fewer regulations.
They are full of shit. The reality is almost the complete opposite of their fact-free narrative. If suppressing working-class wages and unions, enabling and subsidizing the welfare queens on Wall Street, cutting taxes for the investor class, and letting management compensation run wild were the appropriate policy tools, Wall Street would not have crashed and we would not have had the recession in the first place.
If you know anything about economic history, you know that we have been on this path for decades. And all the Republican candidates can do is call for more of it.
Sunday, February 5, 2012
Super Bowl Socialism
On this day, Super Bowl Sunday, we will once again witness the gawdy mixture of sports, excess, patriotism, and military pride. The US military and the National Football League are two institutions in America that are deeply socialist in their structure: They are successful for that reason.
Take the US military: Everyone from a fresh recruit to the Joint Chiefs of Staff is on the public payroll; housing, food, travel benefits, a retirement plan. And they all have a government-provided and regulated health care I suspect few are willing to abandon for the capriciousness of the profits-first private sector. Moreover, the military is chock-a -block with regulations, rules, requirements, and a thick code of behavior.
At the same time, most observers will happily tell you the US military is full of courageous, dedicated, devoted, proud, and hypercompetitive men and women. All this and modest pay as well.
This is a combination that free market advocates say cannot exist. Any institution so encumbered will surely stifle innovation, resourcefulness, and personal responsibility.
We see a similar result with professional sports. The NFL, for example, exemplifies bounded competition: a highly circumscribed set of rules and regulations which define and control every aspect of the game. That set of rules and regs is exactly why the game works; they are designed to enhance competition because they do not allow a richer or better situated team to dominate the game. And they minimize cheating, which bothers Americans more in sports than it does in Wall Street and government. Players, union members all, compete fiercely within the confines of the rules, and abide by a thick rulebook that regulates every aspect of play.
Again this contradicts the free market doctrine that insists regulations are inherently burdensome and constrict creativity, competition, and glorious individualism. With no sense of irony, sports fans glibly cheer on their favorite franchises that make clear they win through team effort and pound out selfishness, arrogance, and self-centered individualists more concerned about their stats and their image. There is no I in team, as they say. And no, it is not because of high pay; the pattern fits all sports, including high school, college, and amateur players with no real prospects for riches.
I see that Bill Maher got my memo. In the video below Maher also notes the socialist structure of the NFL, what he calls the irritable bowl syndrome He does stress different points, however. Watch it and note how the socialized structure of the NFL provides such different results than does major league baseball.
Take the US military: Everyone from a fresh recruit to the Joint Chiefs of Staff is on the public payroll; housing, food, travel benefits, a retirement plan. And they all have a government-provided and regulated health care I suspect few are willing to abandon for the capriciousness of the profits-first private sector. Moreover, the military is chock-a -block with regulations, rules, requirements, and a thick code of behavior.
It is worth noting that the US military is a dominating force in the world because the US government wanted it to be, not because the markets made it happen. Military preeminence is this nation's industrial policy and power, complete with the world's most sophisticated weapons. Our defense industry is number one because our government put resources into it and fostered private sector support.
This is a combination that free market advocates say cannot exist. Any institution so encumbered will surely stifle innovation, resourcefulness, and personal responsibility.
We see a similar result with professional sports. The NFL, for example, exemplifies bounded competition: a highly circumscribed set of rules and regulations which define and control every aspect of the game. That set of rules and regs is exactly why the game works; they are designed to enhance competition because they do not allow a richer or better situated team to dominate the game. And they minimize cheating, which bothers Americans more in sports than it does in Wall Street and government. Players, union members all, compete fiercely within the confines of the rules, and abide by a thick rulebook that regulates every aspect of play.
Again this contradicts the free market doctrine that insists regulations are inherently burdensome and constrict creativity, competition, and glorious individualism. With no sense of irony, sports fans glibly cheer on their favorite franchises that make clear they win through team effort and pound out selfishness, arrogance, and self-centered individualists more concerned about their stats and their image. There is no I in team, as they say. And no, it is not because of high pay; the pattern fits all sports, including high school, college, and amateur players with no real prospects for riches.
I see that Bill Maher got my memo. In the video below Maher also notes the socialist structure of the NFL, what he calls the irritable bowl syndrome He does stress different points, however. Watch it and note how the socialized structure of the NFL provides such different results than does major league baseball.
Wednesday, January 18, 2012
Red State Reality
Below is one of the few times conservative columnist David Brooks has actually said something intelligent, albeit in an otherwise ignorant piece:
Blue Texan notes, as have many others, that the constant harangue from conservatives about the path to prosperity, stabiity, and, sweet Jesus, freedom itself, is through an environment with low taxes, cheap labor, damn few regulations and devoid of unions, bureaucrats, and secular liberals. The big problem with this view is that it is at odds with empirical reality.
CNN's Jack Cafferty raises a good question, one not raised enough, when he asks: What does it say that most of the 10 poorest states are Republican? Things don't look good when Mississippi, home of Republican heavyweight Gov. Haley Barbour, has a friendly, pro-business infrastructure with low wages, low union membership, and Republican domination of local and government. And churches everywhere.
The problem is that Missippippi is America's poorest state, with poverty levels reminiscent of the third world. Next in line are Arkansas, Tennessee, West Virginia, Louisiana, Montana, South Carolina, Kentucky, Alabama and North Carolina. Republicans dominate all of them in most elections.
Steve Chapman, writing in the Chicago Tribune, also notes the conservative meme is a fantasy:
As Harry Truman famously said:
Like most Americans, including most evangelicals under 40, I find this culture war language absurd. If conservative ideas were that much more virtuous than liberal ideas, then the conservative parts of the country would have fewer social pathologies than the liberal parts of the country. They don’t.Brooks is correct, though I doubt he is truly cognizant of the implications of this admission. He originally wrote it in his own New York Times post, but in case you can't get past the barriers, and don't want to register, try Blue Texan's take.
Blue Texan notes, as have many others, that the constant harangue from conservatives about the path to prosperity, stabiity, and, sweet Jesus, freedom itself, is through an environment with low taxes, cheap labor, damn few regulations and devoid of unions, bureaucrats, and secular liberals. The big problem with this view is that it is at odds with empirical reality.
CNN's Jack Cafferty raises a good question, one not raised enough, when he asks: What does it say that most of the 10 poorest states are Republican? Things don't look good when Mississippi, home of Republican heavyweight Gov. Haley Barbour, has a friendly, pro-business infrastructure with low wages, low union membership, and Republican domination of local and government. And churches everywhere.
The problem is that Missippippi is America's poorest state, with poverty levels reminiscent of the third world. Next in line are Arkansas, Tennessee, West Virginia, Louisiana, Montana, South Carolina, Kentucky, Alabama and North Carolina. Republicans dominate all of them in most elections.
Steve Chapman, writing in the Chicago Tribune, also notes the conservative meme is a fantasy:
Consider homicide, which is not only socially harmful but a violation of one of the Ten Commandments. Mississippi has the highest rate of church attendance in America, according to a Gallup survey, with 63 percent of people saying they go to church "weekly or almost weekly." But Mississippians are far more likely to be murdered than other Americans.David Brooks needs to complete his mea culpa. It won't do to just say that social pathology measurements are no better in red states than blue; they are, in fact, much worse.
On the other hand, we have Vermont, where people are the most likely to skip church. Its murder rate is only about one-fourth as high as the rest of the country. New Hampshire, the second-least religious state, has the lowest murder rate.
These are no flukes. Of the 10 states with the most worshippers, all but one have higher than average homicide rates. Of the 11 states with the lowest church attendance, by contrast, 10 have low homicide rates.
As Harry Truman famously said:
"If you want to live like a Republican, vote Democratic."
Wednesday, November 30, 2011
How They Really Feel
This man's comments speaks volumes on the attitudes of the wealthy.
His disdain for those with less money is palpable. He clearly is
equating people's value with the size of their portfolio. Rich people
are better.
And it is not just an arrogant attitude; he is also egregiously wrong,his intellectual honesty clearly compromised by his ideology. Notice that he claims to be subsidizing the 99% because he is making big bucks. It is especially ridiculous in light of the massive amounts of money our government has directed at the 1%, and especially the 0.1%, who operate under a self-serving delusion that everything they have is because of skill and hard work. Overlooked by this dickhead are the endless flows of government contracts and concessions to big Pharma, defense contractors and the like. Overlooked are the multi-million dollar giveaways by state and municipal governments as they compete to entice corporations to locate in their areas.
Richie Rich also ignores huge sums given to banks as part of their bailout, money bank executives then used to pay outsized bonuses. And just this week we read that those banks earned roughly $13 billion in interest directly the result of the sweetheart deal they received for tanking the US economy. Here is the gist of it, as related by AllGov:
Source: Citizens for Tax Justice
That's some serious corporate welfare. And from their government-subsidized profits, they pay outsized compensation to people like the guy in the video. If corporate boards claim that their executives deserve their often huge compensation, then those corporations don't need and don't deserve government support. If you cannot live without taxpayers like me subsidizing your bottom line, then your insistence on fat bonuses is even more morally obscene than it already is.
Or is this a problem only when the recipients are the 99%?
The implicit message: It's just good business, complete with tax write-offs, when rich guys are in on it, and it's socialism only when the poor receive it.
And it is not just an arrogant attitude; he is also egregiously wrong,his intellectual honesty clearly compromised by his ideology. Notice that he claims to be subsidizing the 99% because he is making big bucks. It is especially ridiculous in light of the massive amounts of money our government has directed at the 1%, and especially the 0.1%, who operate under a self-serving delusion that everything they have is because of skill and hard work. Overlooked by this dickhead are the endless flows of government contracts and concessions to big Pharma, defense contractors and the like. Overlooked are the multi-million dollar giveaways by state and municipal governments as they compete to entice corporations to locate in their areas.
Richie Rich also ignores huge sums given to banks as part of their bailout, money bank executives then used to pay outsized bonuses. And just this week we read that those banks earned roughly $13 billion in interest directly the result of the sweetheart deal they received for tanking the US economy. Here is the gist of it, as related by AllGov:
Finally, have a look at the chart below. The corporations in these sectors are generally run by individuals who espouse rugged individualism, a can-do attitude, and the glories of a free market. They also almost always bitch about high taxes and government regulation. As you can see, they rarely pay their share of taxes, but they sure know how to pull in those tax subsidies- nearly $223 billion from 2008-2010.Thanks to the Federal Reserve’s generous lending during the 2007-2009 financial crisis, banks that were teetering and at risk of collapsing wound up making billions of dollars in profits, according to Bloomberg Markets magazine.
After combing through 29,000 pages of Fed documents released to Bloomberg by court order, the publication determined that banks earned about $13 billion in income by taking advantage of the Fed’s below-market rates. These loans were made without informing the public or Congress of which institutions were borrowing heavily to stave off disaster.
That's some serious corporate welfare. And from their government-subsidized profits, they pay outsized compensation to people like the guy in the video. If corporate boards claim that their executives deserve their often huge compensation, then those corporations don't need and don't deserve government support. If you cannot live without taxpayers like me subsidizing your bottom line, then your insistence on fat bonuses is even more morally obscene than it already is.
Or is this a problem only when the recipients are the 99%?
The implicit message: It's just good business, complete with tax write-offs, when rich guys are in on it, and it's socialism only when the poor receive it.
Thursday, November 10, 2011
Pigs Fly
Jim Cramer gets a lot of things wrong, especially his stock picks, which are running roughly the same as a chimp and a dartboard. He has generally been a cheerleader for Republicans because Wall Street can buy them so easily. But even he has had enough of the small-minded buffoons at the last Republican debate.
Our problem, as Cramer says, is "unregulated, rapacious capitalism."
Our problem, as Cramer says, is "unregulated, rapacious capitalism."
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.
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.
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 Texaswatch.org).
Not a record I would want to run on.
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 Texaswatch.org).
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:
Let the pushback begin.
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:
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.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.
Let the pushback begin.
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