Posts Tagged ‘Economics’

This past Thursday was an occasion of protest for many immigrant laborers who did not show up to work. Presumably, this action was in response to recent executive attacks on immigrants and hoped to demonstrate how businesses would suffer without immigrant labor doing jobs Americans frequently do not want. Tensions between the ownership and laboring classes have a long, tawdry history I cannot begin to summarize. As with other contextual failures, I daresay the general public believes incorrectly that such conflicts date from the 19th century when formal sociopolitical theories like Marxism were published, which intersect heavily with labor economics. An only slightly better understanding is that the labor movement commenced in the United Kingdom some fifty years after the Industrial Revolution began, such as with the Luddites. I pause to remind that the most basic, enduring, and abhorrent labor relationship, extending back millennia, is slavery, which ended in the U.S. only 152 years ago but continues even today in slightly revised forms around the globe.

Thursday’s work stoppage was a faint echo of general strikes and unionism from the middle of the 20th century. Gains in wages and benefits, working conditions, and negotiating position transferred some power from owners to laborers during that period, but today, laborers must sense they are back on their heels, defending conditions fought for by their grandparents but ultimately losing considerable ground. Of course, I’m sympathetic to labor, considering I’m not in the ownership class. (It’s all about perspective.) I must also admit, however, to once quitting a job after only one day that was simply too, well, laborious. I had that option at the time, though it ultimately led nearly to bankruptcy for me — a life lesson that continues to inform my attitudes. As I survey the scene today, however, I suspect many laborers — immigrants and native-born Americans alike — have the unenviable choice of accepting difficult, strenuous labor for low pay or being unemployed. Gradual reduction of demand for labor has two main causes: globalization and automation.

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I don’t have the patience or expertise to prepare and offer a detailed political analysis such as those I sometimes (not very often) read on other blogs. Besides, once the comments start filling up at those sites, every possible permutation is trotted out, muddying the initial or preferred interpretation with alternatives that make at least as much sense. They’re interesting brainstorming sessions, but I have to wonder what is accomplished.

My own back-of-the-envelope analysis is much simpler and probably no closer to (or farther from) being correct, what with everything being open to dispute. So the new POTUS was born in 1946, which puts the bulk of his boyhood in the 1950s, overlapping with the Eisenhower Administration. That period has lots of attributes, but the most significant (IMO), which would impact an adolescent, was the U.S. economy launching into the stratosphere, largely on the back of the manufacturing sector (e.g., automobiles, airplanes, TVs, etc.), and creating the American middle class. The interstate highway system also dates from that decade. Secondarily, there was a strong but misplaced sense of American moral leadership (one might also say authority or superiority), since we took (too much) credit for winning WWII.

However, it wasn’t great for everyone. Racism, misogyny, and other forms of bigotry were open and virulent. Still, if one was lucky to be a white, middle class male, things were arguably about as good as they would get, which many remember rather fondly, either through rose-colored glasses or otherwise. POTUS as a boy wasn’t middle class, but the culture around him supported a worldview that he embodies even now. He’s also never been an industrialist, but he is a real estate developer (some would say slumlord) and media figure, and his models are taken from the 1950s.

The decade of my boyhood was the 1970s, which were the Nixon, Ford, and Carter Administrations. Everyone could sense the wheels were already coming off the bus, and white male entitlement was far diminished from previous decades. The Rust Belt was already a thing. Like children from the 1950s forward, however, I spent a lot of time in front of the TV. Much of it was goofy fun such as Gilligan’s Island, The Brady Bunch, and interestingly enough, Happy Days. It was innocent stuff. What are the chances that, as a boy plopped in front of the TV, POTUS would have seen the show below (excerpted) and taken special notice considering that the character shares his surname?

Snopes confirms that this a real episode from the TV show Trackdown. Not nearly as innocent as the shows I watched. The coincidences that the character is a con man, promises to build a wall, and claims to be the only person who can save the town are eerie, to say the least. Could that TV show be lodged in the back of POTUS’ brain, along with so many other boyhood memories, misremembered and revised the way memory tends to do?

Some have said that the great economic expansion of the 1950s and 60s was an anomaly. A constellation of conditions configured to produce an historical effect, a Golden Era by some reckonings, that cannot be repeated. We simply cannot return to an industrial or manufacturing economy that had once (arguably) made America great. And besides, the attempt would accelerate the collapse of the ecosystem, which is already in free fall. Yet that appears to be the intention of POTUS, whose early regression to childhood is a threat to us all.

I pause periodically to contemplate deep time, ancient history, and other subjects that lie beyond most human conceptual abilities. Sure, we sorta get the idea of a very long ago past out there in the recesses or on the margins, just like we get the idea of U.S. sovereign debt now approaching $20 trillion. Problem is, numbers lose coherence when they mount up too high. Scales differ widely with respect to time and currency. Thus, we can still think reasonably about human history back to roughly 6,000 years ago, but 20,000 years ago or more draws a blank. We can also think about how $1 million might have utility, but $1 billion and $1 trillion are phantoms that appear only on ledgers and contracts and in the news (typically mergers and acquisitions). If deep time or deep debt feel like they don’t exist except as conceptual categories, try wrapping your head around the deep state , which in the U.S. is understood to be a surprisingly large rogue’s gallery of plutocrats, kleptocrats, and oligarchs drawn from the military-industrial-corporate complex, the intelligence community, and Wall Street. It exists but does so far enough outside the frame of reference most of us share that it effectively functions in the shadow of daylight where it can’t be seen for all the glare. Players are plain enough to the eye as they board their private jets to attend annual meetings of the World Economic Forum in Davos-Klosters, Switzerland, or two years ago the Jackson Hole [Economic] Summit in Jackson Hole, WY, in connection with the American Principles Project, whatever that is. They also enjoy plausible deniability precisely because most of us don’t really believe self-appointed masters of the universe can or should exist.

Another example of a really bad trip down the rabbit hole, what I might call deep cynicism (and a place I rarely allow myself to go), appeared earlier this month at Gin and Tacos (on my blogroll):

The way they [conservatives] see it, half the kids coming out of public schools today are basically illiterate. To them, this is fine. We have enough competition for the kinds of jobs a college degree is supposed to qualify one for as it is. Our options are to pump a ton of money into public schools and maybe see some incremental improvement in outcomes, or we can just create a system that selects out the half-decent students for a real education and future and then warehouse the rest until they’re no longer minors and they’re ready for the prison-poverty-violence cycle [add military] to Hoover them up. Vouchers and Charter Schools are not, to the conservative mind, a better way to educate kids well. They are a cheaper way to educate them poorly. What matters is that it costs less to people like six-figure income earners and home owners. Those people can afford to send their kids to a decent school anyway. Public education, to their way of thinking, used to be about educating people just enough that they could provide blue collar or service industry labor. Now that we have too much of that, a public high school is just a waiting room for prison. So why throw money into it? They don’t think education “works” anyway; people are born Good or Bad, Talented or Useless. So it only makes sense to find the cheapest possible way to process the students who were written off before they reached middle school. If charter schools manage to save 1% of them, great. If not, well, then they’re no worse than public schools. And they’re cheaper! Did I mention that they’re cheaper?

There’s more. I provided only the main paragraph. I wish I could reveal that the author is being arch or ironic, but there is no evidence of that. I also wish I could refute him, but there is similarly no useful evidence for that. Rather, the explanation he provides is a reality check that fits the experience of wide swaths of the American public, namely, that “public high school is just a waiting room for prison” (soon and again, debtor’s prison) and that it’s designed to be just that because it’s cheaper than actually educating people. Those truly interesting in being educated will take care of it themselves. Plus, there’s additional money to be made operating prisons.

Deep cynicism is a sort of radical awareness that stares balefully at the truth and refuses to blink or pretend. A psychologist might call it the reality principle; a scientist might aver that it relies unflinchingly on objective evidence; a philosopher might call it strict epistemology. To get through life, however, most of us deny abundant evidence presented to us daily in favor of dreams and fantasies that assemble into the dominant paradigm. That paradigm includes the notions that evil doesn’t really exist, that we’re basically good people who care about each other, and that our opportunities and fates are not, on the whole, established long before we begin the journey.

Back in the day, I studied jazz improvisation. Like many endeavors, it takes dedication and continuous effort to develop the ear and learn to function effectively within the constraints of the genre. Most are familiar with the most simple form: the 12-bar blues. Whether more attuned to rhythm, harmony, lyrics, or structure doesn’t much matter; all elements work together to define the blues. As a novice improviser, structure is easy to grasp and lyrics don’t factor in (I’m an instrumentalist), but harmony and rhythm, simple though they may be to understand, are formidable when one is making up a solo on the spot. That’s improvisation. In class one day, after two passes through the chord changes, the instructor asked me how I thought I had done, and I blurted out that I was just trying to fill up the time. Other students heaved a huge sigh of recognition and relief: I had put my thumb on our shared anxiety. None of us were skilled enough yet to be fluent or to actually have something to say — the latter especially the mark of a skilled improvisor — but were merely trying to plug the whole when our turn came.

These days, weekends feel sorta the same way. On Friday night, the next two days often feel like a yawning chasm where I plan what I know from experience will be an improvisation, filling up the available time with shifting priorities, some combination of chores, duties, obligations, and entertainments (and unavoidable bodily functions such as eating, sleeping, etc.). Often enough I go back to work with stories to tell about enviable weekend exploits, but just I often have a nagging feeling that I’m still a novice with nothing much to say or contribute, just filling up the time with noise. And as I contemplate what years and decades may be left to me (if the world doesn’t crack up first), the question arises: what big projects would I like to accomplish before I’m done? That, too, seems an act of improvisation.

I suspect recent retirees face these dilemmas with great urgency until they relax and decide “who cares?” What is left to do, really, before one finally checks out? If careers are completed, children are raised, and most of life’s goals are accomplished, what remains besides an indulgent second childhood of light hedonism? Or more pointedly, what about one’s final years keeps it from feeling like quiet desperation or simply waiting for the Grim Reaper? What last improvisations and flourishes are worth undertaking? I have no answers to these questions. They don’t press upon me just yet with any significance, and I suffered no midlife crisis (so far) that would spur me to address the questions head on. But I can feel them gathering in the back of my mind like a shadow — especially with the specters of American-style fascism, financial and industrial collapse, and NTE looming.

This is a continuation from part 1.

A long, tortured argument could be offered how we (in the U.S.) are governed by a narrow class of plutocrats (both now and at the founding) who not-so-secretly distrust the people and the practice of direct democracy, employing instead mechanisms found in the U.S. Constitution (such as the electoral college) to transfer power away from the people to so-called experts. I won’t indulge in a history lesson or other analysis, but it should be clear to anyone who bothers to look that typical holders of elected office (and their appointees) more nearly resemble yesteryear’s landed gentry than the proletariat. Rule by elites is thus quite familiar to us despite plenty of lofty language celebrating the common man and stories repeated ad naseum of a few exceptional individuals (exceptional being the important modifier here) who managed to bootstrap their way into the elite from modest circumstances.

Part 1 started with deGrasse Tyson’s recommendation that experts/elites should pitch ideas at the public’s level and ended with my contention that some have lost their public by adopting style or content that fails to connect. In the field of politics, I’ve never quite understood the obsession with how things present to the public (optics) on the one hand and obvious disregard for true consent of the governed on the other. For instance, some might recall pretty serious public opposition before the fact to invasion of Afghanistan and Iraq in response to the 9/11 attacks. The Bush Administration’s propaganda campaign succeeded in buffaloing a fair percentage of the public, many of whom still believe the rank lie that Saddam Hussein had WMDs and represented enough of an existential threat to the U.S. to justify preemptive invasion. Without indulging in conspiratorial conjecture about the true motivations for invasion, the last decade plus has proven that opposition pretty well founded, though it went unheeded.

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I learned recently about a new website, inequality.org, which bills itself as a project of the Institute for Policy Studies (a think tank in Washington, D.C. — we obviously need more D.C. think tanks). Inequality, specifically of the wealth and income type, is a trend that has been underway for decades. One has to be living under a rock not to have noticed by now where trends are pointed. The site linked to above no doubt contains quite a lot of information and resources, but I admit I don’t have the patience to wade in only to discover needless details of what is already well known. So where, in fact, has all the money gone? OxFam International provides a disturbing snapshot:

The Oxfam report An Economy for the 1%, shows that the wealth of the poorest half of the world’s population has fallen by a trillion dollars since 2010, a drop of 38 percent. This has occurred despite the global population increasing by around 400 million people during that period. Meanwhile, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76tr. The report also shows how women are disproportionately affected by inequality — of the current ‘62’, 53 are men and just nine are women.

The title of the Oxfam report is misleading, of course, because the numbers don’t support the populist reference to the 1%. In 2010, when the estimated midyear world population was 6,916,183,482, (6.9 billion, if you prefer) the number of people who accounted for half of the world’s wealth was 388, or 0.000000056% (that’s seven zeroes before the 56). In 2016, with an estimated midyear world population of 7,404,976,783 (or 7.4 billion), the now 62 people who account for half the world’s wealth (assuming the number 62 doesn’t diminish further between now and July 1) is 0.0000000084% (that’s eight zeroes before the 84). The absurdity of so few people having consolidated so much wealth, a trend that continued (probably accelerated) from 2010 to 2016, cannot be lost on any thinking person. Those dates are relatively arbitrary for purposes of comparison.

To say that economic systems are rigged in favor of the few is a statement of the obvious. No rational argument could be made that the value of social contribution or labor of a mere 62 people is equivalent to half the world’s population. Nor can it be reasonably argued that such large pools of money, stagnant or otherwise, are good for economic systems that require both liquidity and diversity. Is anything being done to dismantle this entrenched and deepening inequality? None that I can observe within the context of geopolitics or economics. However, considering how convinced I am that our economic arrangements will fail utterly when the house of cards we’ve built shakes itself apart, not least because so much of it is based on growth fueled by cheap energy that has been losing ROI for over a century, I would argue that what we are doing to ourselves by doing essentially nothing ought to crash things back to where the value of fiat currency is nothing. Poof: no more 1%, no more 0.000000056%, no more 0.0000000084%.