Monday, July 26, 2010

Quote Of The Day

Robert Reich on how the economy is likely to go in the near future:

The reality is this: Big American companies may never rehire large numbers of workers. And they won’t even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won’t start buying against until they know they have reliable paychecks.

The Great Decoupling of Corporate Profits from Jobs

I have no argument with this. This is how things will be unless the government starts doing serious stimulus, with the idea that it will continue for quite some time. If they don't, you can expect twenty percent real unemployment, and a generation of slow or negative economic growth. Kids graduating from high school or college will be middle aged before this is over, if it even can be considered over by then.

I mentioned earlier that progressives are clueless about why they need to smack the Democrats down this election. You can add another thought to that list, not that any of them are inclined to think all that much: Would you rather have the Democrats defeated in 2010 or 2012? A Democratic defeat in this election means divided government. If the Democrats manage to hang on, and then continue as they have, they'll be turned out in 2012, when they probably will lose the White House, too.

So, if you're inclined to be scared of Republicans in power, you ought to think about when they can acquire it, and whether Democrats will have any credibility left by then.


Dusty said...

But the uber-rich saw their largess grow by 17-fucking-percent last you really think they give a rat's ass what the unemployment percentage is?

Cujo359 said...

They don't care one bit. Unfortunately, neither party listens to anyone else at the moment. If we are to have a future that doesn't involve indentured servitude, then I think that at least one of them has to understand that it will not have power if it doesn't change.

Expat said...

Once upon a time …
IIRC the "Fortune 500" corporations hired < (less than) 10% of the workforce in the country but earned about 65% of profits (information available late 60's) which in the intervening years has seen growth (economically distorted) to present conditions (production economy to financial based economy).
Contrast was that small and medium sized firms employed > (greater than) 90% of the workforce at that time. Several phenomena occurred; one most successful enterprises were purchased, incorporated into conglomerates, assets drained, and the corpse sold on without the means to maintain employment (the junk bond phenomena), or their assets were acquired and operations were terminated, arbitraged to less labour expensive regions from which he corporate profit was derived (Walmarting), this effecting price to where nothing of lesser economic size or purchasing power could compete.
Politically, two changes were effected, one the evisceration of the unions and labour associations, the other was suborning the government rĂ´le in providing an equalizing force into the labour/management power disparity (providing a level playing field) which totally overwhelmed associative labour.
Without having an operative economic perception other than the free market ideology, or an ability to discern actual economic forces, and the history of those forces in constant terms can only lead to absolute cluelessness and paralysis in adequately responding to economic emergencies. The country has only a thin veneer of the economically educated, and those are subjected to a totally bankrupt economic ideology.
The problem is that stimulating monopolistic corporations has little effect on the employment economy. The stimulus of the small and medium sized, employment effective economy is not being addressed, evidenced by the dearth of credit available to those firms employing substantial labour. Once the labour economy enters depression, without adequate succor, demand deflation follows and ultimately the collapse of the economic cycle and system becomes unavoidable and that is guaranteed with asset deflation, the foundation of systemic wealth.
This will not end well …

Cujo359 said...

All I can say, Expat, is that it's certain none of that will change if the current political order doesn't change. I don't want to hit bottom if we can avoid it. If we take our best shot and can't avoid it, that's the way it is.

The only way I can see of doing that is to marginalize this Democratic Party, then either rebuild it from within, or challenge it with a third party. Neither will be easy, and neither is even remotely close to sure-fire. But I don't see any other choices besides sitting back and watching the world burn, which I'm not going to do.

Expat said...

Fully agree that things will not change. Total political corruption will forestall any attempt to effect change and political corruption will not disappear without taking the political edifice with it, that will take the economic edifice as well; corruption is not called a cancer on the body politic for nothing. Had the corruption been superficial, it could have been surmounted; pervasive corruption cannot be dealt with while attempting to effect necessary change.

The only realistic recourse is retreat. Withdrawal of consent will not add to the malfeasance of power and the bankruptcy leading to collapse. This is what was suggested in this comment at Ian's:

The Republican Party has gone politically insane, the Tea Party acts as refuge for rabid but reliable republicans.

The big tent of the Democratic Party has accommodated the semi-sane wing of the Republican Party in the form of blue dog conservatives [and their corporate sponsors] which have taken over the space leaving no room for traditional, liberal, and labour Democrats except at the edges, there is no longer a home in that inn for them.

Any attempt for disaffected Democrats to form a viable other party organization will be ridiculed as another me-too-Tea Party and by so doing will keep any serious consideration from forming. That opportunity for forming a political party ended when Pelosi took impeachment off the table, the Patriot Act was renewed, and spying on Americans was approved.

About the only recourse left for Traditional Democrats is to concentrate on local and state offices, national offices are never going to be responsive to Democratic programs. The national system must undergo complete and utter collapse before the Traditional Democrat will ever have a voice in those halls again. The Republican ideology will have to demonstrate absolutely its bankruptcy beyond all doubt and for all time. The destruction of the corporate control of the political process must be complete as well. The undoing of Social Security will show the program was sound, what was not sound was the promise of the government to return the borrowed wealth paid for by the pensioners, but that is another in a long list of crimes against humanity, crimes against the peace, and war crimes perpetrated by the federal government ( federal government legitimacy has not existed since the election of 2000).
end quote.

The only remnant of Franklin Roosevelt's party is the name, his coalition has been rent asunder. The only available recourse for the members wishing to continue the coalition is to retreat from federal levels and obtain control of state level political parties until the collapse is expended, and then return to reconstruct the pieces into a workable construct. The experience from Irish history may give some guidance. The IRA effected the separation of Ireland from Britain but underwent a schism, one faction (Fianna Fail) dominated and silenced the other (Sinn Fein) which was reformed later as the Provisional IRA in Northern Ireland in response to egregious civil conditions there. When diplomacy began working after a long armed struggle another schism took place in the PIRA and the "Real" IRA, not accepting the politics, became active and is continued by the diehard faction, the history is still being written at this time.

With the widespread corruption of the political process by authoritarian corporatist interests, collapse is the only way to rid the body politic of the cancer, in the same way the collapse of Germany and the Third Reich removed National Socialism from that national agenda, or Fascism from Italy. Rather than a catastrophe, this presents opportunity to reconstruct the nation with effective safeguards for fundamental rights. This is another choice that is available.

Expat said...

If monologue is the preferred format here, please delete my second comment. It was an attempt at dialogue, I'll know better next time. Thanks.

Cujo359 said...

Hi, Expat. Sorry for the delay in replying. You may have noticed I haven't been posting a whole lot here lately. I regret that occasionally comments will be monologues, because there are times when I don't know how to answer them.

Anyway, as to your comment, I think that reorienting state political parties may be as difficult as reorienting the national one. Talking with the WA state Dems is like talking to a wall. I gave up. Montana Maven wrote several times about the difficulty she had with trying to reform the Democratic Party in her state. These should be two of the easier states - Washington because it's comparatively new and not so corrupt, Montana because, let's face it, you're not likely to see big city machine politics there. Yet she had one hell of a time. Her site's down now, and I think that's partly because she's given up for the time being.

Talk about chaos is one thing, chaos itself is another. I don't want to go through a great depression, nor a war. That's what chaos really is. It will hurt lots of people, and kill lots of people. It's an opportunity, but as you may recollect, the Great Depression gave us FDR, but it gave Germany Hitler.

Chaos doesn't always work out like you planned.

And while it does seem to work out that way most of the time, I don't think that chaos is the only way to major change, even when a system is corrupt. I'm not aware of any law of nature that says it has to be. It's just usually easier to accomplish. I'd feel better about that statement if I could think of some corrupt systems that were reformed without complete chaos. The Soviet Union is the closest I can come, and it's not a sterling example, to be sure.

Expat said...

TGFD (thank doG for dialogue)
I hope you are correct about being able to preserve some political party. I suggested local and state levels since sponsors can be more easily limited to local funding resources and national/international sponsors can be limited. Think - he who controls the purse … and then after waiting out the maelstrom, there is a political organization ready to function.

As for survivability, look to the history of Spain. Its Republic was overthrown, a dictatorship founded and sustained on terror usurped power, and yet, after that unsustainable autocracy passed, normal and healthy political life resumed. Even though a substantial portion still support the Franco regime, they can walk the streets in safety, their day has passed and time will remove their numbers, life in Spain goes on. There is an object lesson to be had from the Spanish experience.

As for the original direction of the post, the economic conditions are not well served by any monopolistic market entity. Their power is absolutely tied to the continuation of the economy and the monetary system that supports the economy. Once deflation becomes rampant it is no longer controllable by traditional economic methods. This, in light of the corruption of the political and governmental functions, will bring down the economy and its political governance. The financial bailout was abuse of the monetary system by corrupt politicians at the behest of the great economic malefactors. A new economic discourse is necessary, untainted by bankrupt economic ideology.

YMMV ;-)

Cujo359 said...

Hopefully, my M will V. Even a deflationary spiral could be an ugly thing, with the only out being some calamitous change or really long term government stimulus, which I have to agree with conservatives would be bad (they'd say it's always bad, of course, but given enough stimulus, what they fear - massive waste and corruption - will happen).

Along the lines of that parenthetical, though, I agree with your earlier statement that too much stimulus is likely to go to big businesses in the current environment, at least in some sectors. The construction and green energy industries, though, are not yet dominated by big business, and lots of stimulus could profitably put into those areas. Education also is not a big business, and is something else we've shamefully neglected in the last few decades.

Anyway, I suspect that we're going to have to either change the Democratic Party or replace it. Either requires that the current leaders be weakened, so that's Step One until someone provides a better plan.

So far, no one has. All they do is whine about what a nihilist I am for suggesting such a thing. One thing this conversation has gotten me in touch with is that I'm not a nihilist. ;)