dagblog - Comments for "FIDDLING WHILE ROME BURNS"

Thanks. My reticence on this

Oxy Mora — Tue, 16 Nov 2010 17:03:15 +0000

Thanks. My reticence on this issue is partly my lack of confidence in the Administration's ability to control the narrative, especially with respect to the "deficit". I just perused the CNN poll and the thing that skewed the most and leaped off the page was the "unfavoable" on the question of Obama's control of the "deficiit". Conversely, if O can turn this perception around,particularly on this tax issue, it would seem to lever his chances for re-election. But if O can't control the narrative better than he did the first two years, I'd at least go with something that's not contractionary in the short term.

It is a very difficult

coatesd — Tue, 16 Nov 2010 15:48:06 +0000

In reply to Thanks for a great post. I

It is a very difficult judgment call, but lines do need to be drawn, particularly with a Republican Party as rampantly conservative as this one. The case for not extending the Bush tax cuts to the very rich is compelling. I think it should be made loud, long and clear, and the onus put on the Republicans to block the middle class tax cut. This is no time to blink! Because one blink, one allowing the Republicans in the House to call the shots, will just encourage them to call more.

Thanks, David. Better perhaps

SleepinJeezus — Tue, 16 Nov 2010 14:24:20 +0000

In reply to Dear SleepinJeeezus - what a

Thanks, David. Better perhaps one day to meet indeed!

I would love to pick your brain in a more dynamic conversation than this give-and-take, even as I realize one question answered would lead to three more to pursue. I read most of your "Seen From Below" essay and find it fascinating. (i worked all night last night and so this has been "bedtime reading" for me this morning, hence my inability to get through it all. As it is, I kept going back over paragraphs to fix the lesson learned in my head.)

I am most certainly not a trained economist. nor can I claim credentials as an academic. It therefore takes a little time to personally digest the scope and breadth of the material you've laid out here. But, yeegads! You have given me a helluva lot to chew on! I will definitely be in touch to pursue this conversation further to whatever extent you will welcome and allow such a discussion

The "new social settlement" you address here is, I believe, precisely what I am talking about when I insist that the fundamental rules governing the economy (or wealth accumulation) must change. I look forward to rolling this about in that chasm between my ears for awhile in attempt to place my previously considered "remedy" within the historical and systemic context you have so magnificently described in your essay.

Enough for now. I'll be in touch again, soon!

- Jeff (BTW: The "SleepinJeezus" nickname has an extensive backstory. For these purposes here, suffice to say it's firmly derived from a very proletarian experience of sleeping head down over a steering wheel in an 18 wheeler - parked, of course! ;O)

Thanks for a great post. I

Oxy Mora — Tue, 16 Nov 2010 04:15:58 +0000

In reply to FIDDLING WHILE ROME BURNS

Thanks for a great post. I wonder what you think of a one or two year extension on the tax cuts, perhaps with a reset at $500K rather than $250. I think an extension of the tax cuts above $250K is a revolting idea and inimical to a level playing field, but I am tempered by several points. I am only speaking here of a one or two year extension. Because of the contractionary effects of not extending them, if it were a choice between across the board extension or no extension at all, I would choose to extend them, knowing no other stimulus is coming out of this Congress and not wanting to risk any contractionary effect.And I would only choose this option under an assumption that there will be a firebrand's arpproach to enforcing the regulations and the CFPB which are already on the books. Obviously one could choose to let the cuts expire, and have a strategy to separate the Middle Class from the rest and let the chips fall. Am I delusional in thinking there is sensible compromise, on a one or two year basis, in extending all the cuts?

Dear SleepinJeeezus - what a

coatesd — Tue, 16 Nov 2010 02:40:47 +0000

In reply to Thanks for the response,

Dear SleepinJeeezus - what a great neme!

It is good to be in conversation. Even better perhaps one day to meet.

But since we must type at each other, let me come back this way. There are clearly different models of capitalism out there, and we happen to be in the worst of them. What the US created in its first period of growth is still there in the German model - still strong in manufacturing, still with established trade unions and worker rights. That model is always precarious because of global competition, but it seems to have sufficient strength to sustain itself as the motor of the European Union, burdened more by bailing out "weaker" European economies like Greece and Ireland than with seeing off Chinese competition. But then the EU as a whole keeps exports out - it does protect itself in ways we don't.

But globalization is a reality for all models of capitalism - and its central feature is the growth of a global labor force. I don't know how much of my writing you can inflict upon yourself, but I have recently tried to get to grips with what that means for the left. It's not good! The essay "Seen from Below: Labor in the Story of Capitalism" is at http://www.davidcoates.net/publications/non-fiction/global-capitalism/. It puts the Reagan moment in a much bigger picture. It would be good to know your reaction.

The growth periods are simply examples of class accords underpinning periods of capital accumulation. The best material on them is in Terence McDonough, Michael Reich and David M. Kotz (editors), Contemporary Capitalism and Its Crises: Social Structures of Accumulation Theory for the 21^st Century. You probably know this material, but I do recommend it to anyone sharing this exchange. We don't just need new policies. We need a new social settlement.

Best wishes

David

Thanks for the response,

SleepinJeezus — Mon, 15 Nov 2010 22:41:23 +0000

In reply to I happen entirely to agree

Thanks for the response, David.

I think we are close tp agreement on the dynamics of the problem; that this represents class struggle, or class warfare. But where we might differ is in your charcterization that this is class struggle "as usual."

I view the wholesale adoption of Reaganomics as an insidious change in the way this country does business. It is an experiment gone mad which altered the fundamental rules by which we govern our economy. There really is no room for any kind of a labor movement (domestic or foreign) within the game as presently constituted. Any effort to improve the plight of the working class - to ensure that workers (or the "proletariat") get their share of the economic pie - is now dead on arrival for reason that it negatively affects "profits."

The concept of labor as a commodity is a new invention, and it is devastating in its consequences. "If the American labor commodity can't be cost-competitive," we are told, "then the owners will simply move elsewhere." There is no longer any effort at all to create rules that allow the worker to retain any ownership of his labors and to even the playing field. As an example, just when did you see your last effectively realized labor strike in the last thirty years? The thought of workers withholding their labor in pursuit of higher wages and benefits is properly deemed to be suicidal under present rules. What tools are left to labor to exercise any muscle in the fight to wrest their share of wealth from this economy as presently constituted?

We are even seeing this played out within the developing economies. I read about countries like VietNam losing some of their textile industry to places like Myanmar or Jordan because VietNam's economic growth has sparked an "uncompetitive" growth in the wages demanded in that country. Increased globalization has only exacerbated what we initially saw as a "war between the states," wherein industry moved from one state to another (most commonly from the Rust Belt to the South) in search of a non-union, "more competitive" (aka "cheaper") workforce.

Any institutional rule that previously afforded workers some clout in making certain that there is a just and fair distribution of the wealth generated by economic growth is now derided as "protectionism" or as an impediment to profits that must be avoided. THAT is a fundamental change between the first and second growth period, and it must be reversed.

Ultimately, I think the change in labor's circumstance that is required will come about only if we adopt a far more fundamental solution than simply telling workers to "stand tall and fight!" We must first define the fact that we are indeed under assault in a "Class War," and that begins by declaring this insane, ongoing experiment in trickle-down economics to be an anomaly that has failed us miserably. Only when we begin to understand the the many ways in which the present rules governing our economy are recent inventions designed to work against our interests can we even begin to fight back.

Your "first period" of economic growth shows how well an economic system can work for all socio-economic classes when the rules are in place that support economic justice and a fair distribution of wealth. But we have no basis for wresting justice from the present, perverse economic system that insists all wealth must accrue to the "owners" of this economy, whilst the rest of us are simply engaged in making it all happen.

I happen entirely to agree

coatesd — Mon, 15 Nov 2010 17:52:19 +0000

In reply to Excellent blog post. I think

I happen entirely to agree with you, so if in compressing the argument I created the impression that the distribution of wealth and power between classes in the second growth period was externally dictated, then the compression needs amending. The driving force in the second growth period was internal class struggle - as usual - as you say, a serious assault on the power of organized labor in the United States. The "global dimension" giving extra weight to that assault was the dramatic increase in the size of the global proletariat to which US capital now had access because of the collapse of the Cold War and developments in China. The weakness of organized labor even in the first growth period was its regional, racial and gender narrowness. That weakness is now massively compounded. A critical requirement for a progressive third growth period, therefore, is the emergence of a large and inclusive labor movement - a very tall order given the recession, and one which is not in the sights of the Obama administration as far as I can tell.

Excellent blog post. I think

SleepinJeezus — Mon, 15 Nov 2010 15:13:31 +0000

In reply to FIDDLING WHILE ROME BURNS

Excellent blog post. I think you have outlined the two growth periods quite well, along with an accurate description of the major ways they differ, one from the other.

I disagree with what I understand to be an underlying premise here, however, which I read as the second period growing out of the first in response to new global realities (i.e. The absence of the Cold War; increased development in Asia and elsewhere, etc.) I understand your point about the impact these had on what might be called - for lack of a better term - the "Capitalist/Labor/Socialist" economic expansion in the first half of the century. But I don't see any of these extraneous pressures being fatal to that set of policies that were written in a belief that the benefits of growth would rightly accrue throughout the socio-economic levels.

Increased productivity in the first period, for example, resulted in not only increased profits for the "owners" of production, but also allowed for greater wealth gained by the workers as well as other specifically direct benefits such as the 40 hour work week, increased vacation time, and more holidays. I see little reason that these principles of shared wealth and benefit couldn't have been supported throughout global economic expansion if they were deemed to be "the rules" by which this economics game is played.

What I see instead is that the second period represents a radical and actually quite sudden shift away from the fundamental rules that were based upon principles of economic justice. We instead launched ourselves pell mell into an experiment with what can best be only described as "Trickle Down Reaganomics." Reagan's firing of the Air Traffic Controllers remains a watershed event in our history that is hardly appreciated for its importance. Suddenly, the rules were changed, and we turned toward this experiment wherein the new principles dictated that top-loading EVERYTHING in the economy (foreign trade; tax policy; political clout; support of the military industrial complex; etc.) would result in a growing economy with an implied promise that everyone would benefit. Well, as your statistics point out, we got the growth. Mutual benefit? Not so much. In fact, as an example, increased productivity now prompted market demands for reduced wages, downsizing, and an increased workload for the individual laborer. Trade policies were developed - not to export the blessings of economic justice we had previously experienced in our domestic economic system - but rather to exploit labor (both foreign and domestic) as a commodity to be "consumed" at its cheapest cost.

Right across the board, we've witnessed the ways in which this monster of our own creation has turned against those of us who must work for wages. Retirement plans went away. Wages stagnated. Workplace labor and safety regulations were ignored or dismantled altogether. A housing bubble and consumer credit devices were created that gave us a false sense of our own wealth, and these have since collapsed and gone away. This "wealth" has vanished into the ether to our own decimation, while the banks and the "owners" have been held harmless..

having lost our wealth and our homes (in many cases), they now come at us wanting our Social Security, our Medicare, and all manner of safety nets that we previously earned as part of the social compact that underscored the first period of growth. There is no longer any pretense that the growth of the economy is to be accomplished for the universal good. Instead, the wealth of the "owners" of this economy is really all that matters, and we workers/consumers should be willing to consider any manner of sacrifice and reduction in our standard of living for the continued growth of that economy. (Read that last sentence again to get a sense for just how counter-intuitively crazy this has all become!)

Ultimately, what we need is for everyone to come to a realization that the experiment with Trickle Down Reaganomics has failed, and failed mightily! We also need to understand that there is a preferred alternative. That alternative can be found in an economic system that abides the principles we adopted in the first period of economic growth in the last century. Many of the particulars need to be revisited to reflect the changes in the global economy you outline. But there can be no economic justice until we first affirm the principle that says the economy must work for us all, and can never be just the provenance of those who can afford to take advantage of others, for take advantage of others they will do until there is nothing else to be gotten.

Excellent post. You clearly

oleeb — Mon, 15 Nov 2010 06:24:32 +0000

In reply to FIDDLING WHILE ROME BURNS

Excellent post. You clearly outline the very obvious problems the US finds itself mired in. It's funny too because this stuff isn't difficult to figure out in terms of what has happened to the US economy because the Republicans (being the irresponsible assholes they are) will nevercare about the facts since all they care about is power, getting it and keeping it and also because Democrats are so pathetic they act as though they don't understad these basic facts so they can pretend what is important is sucking up to the interest of predatory wealth in hopes of being taken care of upon leaving office. It is a disgacefully corrupt moment in history.

The first period was that

cmaukonen — Mon, 15 Nov 2010 03:07:28 +0000

In reply to FIDDLING WHILE ROME BURNS

The first period was that between 1948 and 1973. Abroad in those years the world was organized around a Cold War division and a nuclear stand-off. At home, prosperity was anchored in the spread of semi-automated production systems. Productivity per worker rose dramatically after 1948, as did the wages of unionized workers: north-eastern and mid-western wage militancy was crucial to the demand side of the 1950s economic equation. American manufacturing led the world, and blue-collar American living standards exceeded those of traditional middle class and professional families in Western Europe and Japan.

As I have said before, it's easy to have a great and productive economy when most of the rest of the world is not yet industrialized or lays in rubble do to a major world war. When your country is essentially the only game in town.

Once Europe and Japan rebuilt and Asia an others industrialized and we could no longer steal oil from the Middle East, American Manufacturing just took a hike instead of trying to compete on the global market.