Good Economics vs. Bad Economics-You Choose

It's time to choose sides. Despite what you hear on the money programs and from the Wall Street cheerleaders, there are very good economists who think austerity economics is a bad idea. Paul Krugman and Joseph Stiglitz, our most recent Nobel economists, are on the Democratic side of this argument, the side of the 99%. Others are stepping up too.

"On November 13th 2011, economists from the University of Massachusetts Amherst drafted an open statement to the Occupy Wall Street movement pledging their support. Since then, more than 250 economists from around the world have added their names. Read more at econ4.org "

To be fair, there are two sides to this argument. Having watched the documentary Inside Job, I know that some economists know exactly who butters their bread and it isn't working people. It's the people who now have all the money who butter their bread. Some economists are happy to tailor their ideas to suit their benefactors.

Then there are the mouthpieces for the 1%, who earn a lot of money just by being mouthpieces. For instance, there's Ann Coulter, who said recently that she thinks the horrible dirty worthless people of the Occupy movement should be gunned down by the police. It worked on the Vietnam protesters, she says.

Larry Summers, who led Obama's economic team, doesn't come off very well in Inside Job, but he is on the right side of the argument now, favoring aggressive stimulus and tax cuts to working people––instead of more billions thrown at the rich, at corporations and banks. He's no fool.

Concentrated wealth got us here. It made our economy topheavy and fragile. It sucked the life out of the consumer economy by making working people less prosperous and less able to make ends meet.

Our economy will only revive when working people feel prosperous again, confident that their jobs are secure, that their health and their families are secure, that their children have a future. We need to shift from the Reagan economics of concentrated wealth. Those economic policies promoted and exploited broad insecurity and vulnerability rather than broad prosperity and strength.

Today, more than 2 million Brits took to the streets to protest their government's austerity policy. What is Austerity? It's the rich elite's answer to global recession. "We have money so we get to buy. Everybody else is poor, so they should live that way."

AUSTERITY IS HOW THE RICH AND POWERFUL TEACH WORKING PEOPLE TO BE POOR.

That is where austerity measures bite. They bite the poor, the working people, the middle class who are getting poorer every year. Austerity bites the victims of the global collapse which was caused by the very rich.

In this country it's the Republican economic policy. They want most Americans to be a lot poorer, a lot less secure. When Americans are afraid they work harder and longer for less. That's the long term Republican goal. In the short term the Republicans simply want Americans to suffer, figuring an unhappy populace will vote for Republicans next year. They are happy for Americans to fail in order for Obama to fail.

Do you want to see what effect Republican policies have? Look at the map of the British austerity measures put in place by their Conservative government.

Austerity doesn't work during a recession. It hasn't before. It won't now. Imagine an airline pilot in a stalling aircraft. Does he see the emergency as an opportunity to save fuel? No. He pushes the pedal down and accelerates out of the dive.

Here are some sound commentaries from economists on the intelligent side of this argument, setting out the dire consequences of these ugly conservative policies. From EconMatters.com

From CNN

Here's Robert Reich's useful and persuasive debunking of the Republican austerity policies.

Sadly, cable television is dominated by a Republican network and talk radio is all Republican all the time. And a lot of Americans are easy to fool.

How Corporations Became Persons and People Became Garbage

I finally got around to reading an article in the New York Times. It was about how the people with money and corporations with money are keeping this money "in the family." Paying themselves and their near and dear. It's not circulating, it's not building, it's not being productively invested, it isn't putting people back to work. During the Great Depression this narrow holding of money, whether it was in a farmer's mattress or a safe deposit box, was called "hoarding" and people who did it were classed as Scrooges or worse.

Today's hoarders of great wealth look a lot more handsome in their tennis outfits or on the town. They photograph well. The television programs about rich people make us admire them, while the programs about regular people usually make them the butt of the joke. Wealth self-advertises and self-justifies. Money = Moral; that's the gist of the Prosperity Gospel, the fastest growing religion in America. Still, however attractive these people are, this hoarding of cash, concentrating the wealth and power in fewer hands, happens at a cost. It benefits few to impoverish many. Big always wins, small always loses. (Picture a large man taking a smaller man and shaking him upside down to get the last bit of cash out of his pockets.) I'll give you a moment to decide which category you fall under.

Here's the New York Times article that got me thinking today.

During a downturn, those with money always buy shares from those with less. They offer very little. Those with too little money have to cash out their holdings at a loss, just to make ends meet and rich people aren't in a hurry. It's a buyer's market. At the top of the business cycle the ones with money (and inside information) are the ones selling. Buy low, sell high.

Human beings are bought and sold the same way. Those with money in hand are in the catbird seat when workers are desperate for jobs. They can hire cheap, they can buy their supplies cheap, pay vendors a discount price...or they can wait and let the desperation deepen into a lower wage scale, wait for the price to go down. (They can afford to be patient, and are happy to remind themselves that "patience is a virtue". A virtue that they avoid practicing with those who owe them money.)

In a recession money is worth more and people are worth less. Humanity is degraded in measurable ways. To think this way people with money step out of their human role, forget they are human beings for the moment, and assume their alternate role: they try to think how their money would think, how their corporation would think, and they persuade themselves that this is more "prudent" more "responsible", more "high-minded", when it's just more cold-blooded and inhumane.

Right now the teachers and plumbers and mechanics and students and nurses protesting on Wall Street are being dehumanized and beaten and pepper-sprayed, while the champagne class in the towers and the comfortable classes in their suburbs are invisible and protected, their names hidden behind the corporations who are allowed to stand in for them. People of all classes and all ages and backgrounds, as soon as they have a grievance, are called "dirty", "longhaired", "lazy", "garbage", "violent", "depraved", "perverted", "smelly" by the well-dressed pundits on FoxNews. Corporations have a well-paid apparatus to shape public opinion, and cable news has everyone's attention 24 hours of every day, so the public is being instructed how to think.

The Daily Show does a much better job of putting the pushback into context, and it's funny.

The terms of all transactions are dictated by the more powerful party, and they get to tell everyone what to think of the transaction. Now, thanks to the Supreme Court appointees of Reagan and two Bushes, corporations are people and money is speech. Meanwhile ordinary people are not people, are garbage to be thrown away, especially if they don't have a job, and lack of money becomes a handy measure of human worthlessness. It's a strange distortion of how our forebears thought. Adam Smith, Lincoln, TR, the Founding Fathers and the Sermon on the Mount turned upside down and inside out by the best public relations money can buy.

O'Reilly: The American Revolution is Over

THE AMERICAN REVOLUTION IS DEAD

By William O'Reilly (from the archives)

In the beginning, there was some sympathy toward the revolutionaries, who believe the parliament in London should lift its monarchist and commercial tyranny from our shores. In the face of the present conditions, that message is a powerful one, and so the folks who wanted independence got some traction.

But the more we saw and heard, the more fair-minded Americans came to believe that this rebel movement was not interested in legitimate issues. Many of them simply want to blow up the economic system.

In addition, some of their behavior was and is reprehensible: shooting at British soldiers from behind trees, throwing expensive imported tea into Boston harbor, tarring and feathering their opponents, speaking treason in public, all kinds of provocation against our British rulers, all kinds of depraved behavior in general.

A picture taken by the New York Post shows empty rum bottles that were taken out of the encampment of the Continental Army. Isn't that nice? I don't believe we've seen any rum bottles at respectable Tory tea gatherings, or am I wrong?

The pamphleteers (and we know their names) are still trying to portray these so-called “Freedom Lovers” as the liberal equivalent to respectable Tory business leaders. One simple question: Would you prefer that your daughter have tea in a respectable drawing room in a fine Tory household or in the ugly squalor of Valley Forge? You make the call, remembering the rum bottles.

A recent Wall Street Journal poll asked: Do you consider yourself a supporter of the signatories to the Declaration of Independence? Sixty-three percent of Americans say they do not support the movement; just 28 percent say they do.

Because troublemakers George Washington and John Adams and John Hancock were sympathetic to the movement in the beginning, along with many members of that radical crowd, such as known alcoholic Samuel Adams and notorious atheist Ben Franklin, this presents a big political problem for them. And so officials in 11 cities got together to discuss how to deal with this “American Revolution.”

(BEGIN AUDIO CLIP)
TORY MAYOR OF NEW YORK: “What had started as a political movement and a political encampment ended up being an encampment that was no longer in control of the people who started them.”
(END AUDIO CLIP)

And that's true. To be fair -- and we always are on "The Factor" -- some of the Revolutionary movement are well-intentioned folks who believe the British colonial system is no longer fair. That's a legitimate debate. But they have been overrun by thugs, anarchists and the crazies who intimidate. If you are a violent person, people usually back off. And George Washington's army, which is comprised mostly of people who can't get any other kind of job, has lost most of its battles anyway. Who can support such sorry ineptness? These lowlife characters are ragged and dirty from sleeping in the open, and many of them don't have any shoes. They probably don't bathe very often. A bunch of bearded longhaired hippies. How can any decent person say they are legitimate?

So the "American Revolution" movement is dead, finished as a legitimate political force in this country. And that's a good thing.
And that's "The Memo."

Hello Child Labor

Newt Gingrich said the other day that he would fire all school janitors and have children clean the schools themselves. (Story from the LA Times)

This is the new GOP. And he is their resident genius.

For those who might be nostalgic for those "wonderful days" when children died in machinery and up chimneys and never went to school, but were usefully and profitably employed at low wages undermining the pay scale of their parents, here's a bit of background on child labor. It wasn't very picturesque or charming, but children were a lot easier for employers to bully, exploit and abuse. "Suffer the little children" I guess. TR would be appalled at the modern version of his Republican Party.

The Looting of American Creativity

From Forbes, an important piece about how the captains of our biggest industrial corporations have been looting our creative capacity and pocketing whatever they can take.

You should call it looting. It's the sort of thing we used to read about when mobsters bought a company and hollowed it out before dumping it, but now it's the model used by big capital management companies. (It sounds a lot like how Mitt Romney got rich: by selling off parts of companies he acquired, laying off masses of employees, and pocketing the cash.)

Such single-minded (you might say narrow-minded or short-sighted) pursuit of profits is a loser's game. It's not sustainable, not responsible. (Remember when American business used to be responsible?) In the cases cited here, where capacity is sold off overseas, it's certainly not very patriotic, even if the tycoons involved do wear a flag lapel pin. What's the word I'm looking for? What's the opposite of creative? Sure: destructive. That's the preferred model of the last thirty years in American businessthink. You could write a vampire movie using this business model.

Creative assets have been invented and developed in the U.S. often with large taxpayer investment, collective genius harnessed and supported by universities and government scientific grants. But in many cases the things Americans helped create are no longer American; they've been offshored to evade societal obligations. Obligations that responsible Americans used to be proud to shoulder. And the infrastructure and educational system that nurtured the creativity is left to rot because the profiteers refuse to pay back into the creative cycle. They've looted the creative infrastructure, offshoring our American genius to evade taxes. As if the American genius was theirs to take. What happens to the inventors once their creativity has been mined and sold away? The huge dividends from this process have been pocketed by a very narrow class.

We are taught by the media to distrust migrants, but the multinational corporate model is a migrant too, a much less helpful version, a more dangerous version, without nationality, without any sense of responsibility or loyalty or conscience. Without any wish to be American unless it profits them and doesn't tax them. Here's an interesting 2007 article from investigative journalist Lucy Komisar about how Merck and other companies do their offshore shuffle.

First they came for the blue collar jobs, and I said nothing. Then they came for the white collar jobs... What mid-century cautionary tale am I reminded of here? This warning article was published six years ago by the Economic Policy Institute. Did we listen?

But (and are we surprised?) offshoring doesn't fulfill the promises it makes, as this 2007 article from CIO magazine demonstrates.

"Sixty percent of companies that send their operations offshore fail to meet their operation performance expectations, and more than a third (34 percent) fail to mee their savings expectations, according to a new study from global management consulting firm A. T. Kearney."

Occupy Wall Street Isn't About Real Estate

From Reuters, a good summary of the cluelessness of "the haves and the have-mores" who've been catered to and hugely benefited over the past 30 years.

If you think this preferred treatment of the very rich is an illusion or an invention, it was expressed very succinctly and clearly, even arrogantly and jokingly, by George W. Bush when he ran for the presidency in 2000. He might almost have been addressing a frat dinner at Yale. The man oozes privilege. How did America not see this and worry about it? We were carefully instructed otherwise by a media owned and operated by the 1%. Journalists who tried to tell the truth were let go, muzzled, discouraged, suppressed, edited. More systematically they were not given microphones on 24 hour cable news.

Could there be a more cynical, cheerful acknowledgement of what's become of this country?

Nicholas Kristof says something important in today's New York Times: the Occupy movement isn't and needn't be about the real estate. It is and should be about the idea of vast inequality, vast power of the very few vs. powerlessness of the many.

Via MSNBC, a retired Phildelphia police captain worries that the brutal crackdowns in NY, Oakland, Seattle and elsewhere represent corporate America using the police as hired thugs. Hired violence is a chilling throwback to darker periods in our history. Watch the more documentary passages in The Grapes of Wrath and you'll see how police were co-opted by the powerful and the moneyed in a period of economic depression. We don't need to borrow examples from the Nazi era, we have our own.

These evictions also remind me of the violent treatment of the 1932 Bonus Army by Douglas MacArthur, with the encouragement of President Hoover, as explained in the Guardian newspaper.

I also can't help being reminded of the American Revolution. Valley Forge has been mentioned, as the occupiers faced a winter in the open, but the more important comparison is with the strategy Washington used then against overwhelming odds. He didn't confront, he avoided battles that would destroy his smaller force. He used evasive tactics. He and his army endured and eventually won. He won by enduring and keeping the message alive. 99% of Americans need to understand how much wealth and power has been taken from them by the 1% over the past 30 years. This is a fact that Wall Street is working very hard to obscure and disguise.

Here's a good summary of the victory of the 1% written by Nobel economist Joseph Stiglitz.

Here's a very good summary of what the 1% have stolen from all of us, from the New York Review of Books. We should resurrect the term "Robber Barons" first employed by journalists like Mark Twain in the 19th century.

Vigorous regulation of Wall Street has come from both parties in the past. Today, we only see it from the Democrats. (Obama's attempts to get more thorough reform have been thwarted by a lockstep Republican minority in the Senate.) People forget the original opponent of Wall Street power was Theodore Roosevelt, a progressive Republican who would be drummed out of today's GOP.

Many progressives wonder why Obama hasn't waded fully into this Wall Street confrontation. Why hasn't he given a speech like FDR's famous "I welcome their hatred" speech calling out the plutocrats of great wealth? Well, these times are different. Washington is more narrowly divided, and the powers arrayed on the side of Wall Street are more considerable than they were in the 1930s. Here's a very useful discussion of these times vs. those times, by my friend Eric Black.

Prior to the New Deal most old people lived in poverty. FDR eliminated old age poverty, and in some ways helped create what we've come to call The Generation Gap. Much of that gap is a difference in world view between insecure young people and secure old people. The young of today fear they won't have the secure life their grandparents have enjoyed. And it appears their grandparents don't care or don't understand. Lori Sturdevant has a good piece about this in today's StarTribune. The blindness of older Americans to what is happening to their children's and grandchildren's future is downright alarming, and it makes it hard for the White House to be more confrontational. It's not about government debt at all; it's about the impoverishment of the vast majority of working Americans. A new Pew Center report examines this gradual but dramatic trend across age groups; it's summarized in The Atlantic.

The defenders of Big Money have no problem being confrontational. This recently discovered memo from a Wall Street lobbyist lays out their plan to discredit the Occupy movement. They have the lock on cable news and talk radio and the advertising apparatus to do this. A link to the actual memo is enclosed.

Here is a careful backgrounder on one of the counterprotests that's gotten a lot of play. Like the Tea Party movement, there is a bogus element. The Tea Party was funded by billionaires. The Occupy movement is genuine grass roots, with all its variety and occasional anger and shabbiness. It's real.

Dumb and Dumber-Republicans on Camera

Heck, it's Friday. Here's a short collection of the stupidity of the Republican presidential field. Our allies and friends must really wonder about us.

Rick Perry's goofy speech in New Hampshire

Rick Perry's oops moment in the recent debate

Herman Cain's prolonged inability to answer foreign policy question in Milwaukee

Michele Bachmann's long list of gaffes and misstatements

How do choose one Sarah Palin gaffe from among so many? Here's the goofiest.

Here's some choice Gingrich. The man is funnier when he's wrong because he's so arrogant about it.

Romney, the robocandidate, always seems prepped and memorized. Or is it a microchip? He's still consistently and woefully out of touch with average Americans. Here's a recent instance reported in The Week.

Out of touch? Are we surprised? After all, Romney made his millions by leveraging and downsizing American companies and moving their jobs overseas, as this NYTimes story reported.

We've forgotten how inept a Republican president can be. I wonder sometimes if the ineptness is a blind, a way of diverting our attention so we don't see how hard and effectively Republicans work to degrade the middle class and cater to the very rich.

Bush had many excruciating moments. His father set a low bar when he vomited in the lap of the Japanese president, but Bush Junior had no trouble going lower. I remember his glassy eyed pauses best. I'm remembering one especially long pause in a 2004 debate. I'd describe it as a fugue state. He won re-election anyway, thanks to a few Diebold machines in Ohio.

These Bush gaffes are almost too numerous to catalog.

And another bit of pure Bush, on camera, on mike. Scary.

A carefully reported story about President Bush cheating during the 2004 debates was spiked by the New York Times. Why are Republicans shielded from serious reporting? Maybe the stupidity act makes the news media feel protective.

Financial Armageddon or Revenge of the Nerds?

Whatever happened to all the evil scientists who used to be paid big money to plan the end of the world? The designers of nuclear destruction. The actuaries of armageddon who calculated how many people could be killed how quickly for how much money and how more could be killed with less damage to property, and then had dinner and watched TV and went to bed. Whatever happened to them when the cold war ended?

A lot of them turned their mathematical brilliance to devising clever methods (tricks, games) for private financial companies. Methods, it turned out, as diabolical and destructive as the weapons they devised for the military.

Here's a 2009 article from the New York Times.

This blog post from 2007 describes the new brains behind the hedge funds as a cheerful revenge of the nerds. It's all a fun, profitable game. No social sense required. What does that imply?

Calvin Trillin wrote a humorous piece a couple of years ago about how much safer our economy was in the hands of the dumber members of the WASP aristocracy who were either too lazy or too dim to cause much trouble. (I found the relevant passage in this essay on the New Republic's website.)

'“The financial system nearly collapsed,” [said Trillin's barroom friend], “because smart guys had started working on Wall Street.” '...

'I reflected on my own college class, of roughly the same era. The top student had been appointed a federal appeals court judge — earning, by Wall Street standards, tip money. A lot of the people with similarly impressive academic records became professors. I could picture the future titans of Wall Street dozing in the back rows of some gut course like Geology 101, popularly known as Rocks for Jocks. ...'

'“Two things happened. One is that the amount of money that could be made on Wall Street with hedge fund and private equity operations became just mind-blowing. At the same time, college was getting so expensive that people from reasonably prosperous families were graduating with huge debts. So even the smart guys went to Wall Street, maybe telling themselves that in a few years they’d have so much money they could then become professors or legal-services lawyers or whatever they’d wanted to be in the first place. That’s when you started reading stories about the percentage of the graduating class of Harvard College who planned to go into the financial industry or go to business school so they could then go into the financial industry. That’s when you started reading about these geniuses from M.I.T. and Caltech who instead of going to graduate school in physics went to Wall Street to calculate arbitrage odds.”'

Here's an article from a blog out of Columbia University about math and physics geniuses working at hedge funds.

Here's an article referenced in the above article, from ALPHA, a magazine for hedge fund whizzes. Imagine a magazine for hedge fund thinkers... "What the Well-Dressed Quant is Wearing" is about miniskirts, I think. (Sorry. An obscure reference to the inventor of the miniskirt.)

Whether you're a nuclear physicist or a hedge fund mathematician, the small dots on the map or the diagram aren't people with lives and families and houses and livelihoods and dreams about the future, they are only abstractions, they are little bits in your calculations.

I'm reminded of a famous soliloquy from the Third Man, spoken from the top of a ferris wheel:

"Victims? Don't be melodramatic. Look down there. Would you really feel any pity if one of those dots stopped moving forever? If I offered you 20,000 pounds for every dot that stopped, would you really, old man, tell me to keep my money? Or would you calculate how many dots you could afford to spare? Free of income tax, old man, free of income tax. The only way you can save money nowadays."

So what's a superior brainbox to do these days? Build bridges or cure diseases or sort out complex societal issues? No, it's much less stressful and more lucrative to go work at a secluded campus in leafy Connecticut and figure out ways to game the financial system. Here's a roadmap for your little genius who's considering where to go after high school. Courtesy of a prof at the University of Illinois. If your child is employed blowing up the global economy he might be able to keep his immediate family safe. You can hope. Or you can run a risk analysis of it.

The Just World Bias

There's an excellent column in The Guardian by Oliver Burkeman. You probably know a lot of positive thinkers. Share this column with them.

There is a belief out there that people get what they deserve. That rape victims asked for it. That poor people deserve to be homeless and hungry. As Herman Cain says to cheering Republican crowds, "If you don't have a job, blame yourself!" The people with money and power like the "just world bias" because it justifies their good luck. It turns them from lucky people into nobility.

In today's StarTribune a column by former Strib business reporter Mike Meyers describes how the Republican Party shapes our tax system to help the rich and punish the poor.

If you go to one of those new, very large, very successful "Christian" churches, I suggest you raise your hand and ask about this. I'm sure your pastor has a ready answer. Maybe Jesus was wrong about the less fortunate. Or maybe He really preferred rich people.

The Long Con

This excellent article in Rolling Stone sorts out the myth from the history giving a very good picture of what amounts to a Long Con. A fraud that's required decades of planning and patience on the part of the Republican Party, and patient investment by its rich friends. A bit like Madoff's ponzi scheme, except for the rich friends who are walking away with trillions, much of it in taxpayer dollars.

I miss Eisenhower. I wish a lot more Republicans missed Eisenhower too. By modern Republican standards Eisenhower was a Marxist and Reagan himself was a Socialist on the Swedish model. This economy we are experiencing is the economy the Republicans want. It's the one they planned for.

The Rule of Accumulated Advantage

The Wall Street Journal, usually the megaphone of Wall Street's more devout worshippers, has a very readable cranky counter-argument today. It seems most of what you read about stocks and investments is tailored to please the large company offering them. This happened with the private rating agencies who tailored their assessments to their customers' demands, which is like an oncologist asking you whether you'd like him to see cancer on your x-ray or something nice. Financial analysts and journalists have been far too nice to Wall Street for years. This is how bubbles are made.

Love, money, admiration, credit ratings, applause, sexual favors, media coverage, protection, immunity, security, and (apparently) the blessings of God, Jesus and the Holy Ghost all increase as you move up the scale. The bigger and richer you are the more you get, the more help you get, the more sympathy you get, the more everything. (The Queen always gets the most presents, not only because everybody wants to please her but because, unlike other mortals, she has two birthdays every year.)

The rich today are handled with the gentle concern the vulnerable once could beg for. The poor and vulnerable are increasingly scorned. Is this because of the Prosperity Gospel? It's strange to think that Darwin and Herbert Spencer's bleakest thoughts are now the guiding principles of the followers of Jesus. (As Herman Cain says "If you aren't rich, blame yourself!") The most popular churches say that riches are a sure signal that God loves you more than other people. No wonder they're popular; they tell their biggest donors exactly what they want to hear. Churches kiss up, not down like they used to. We always knew the rich really inherit the earth, but now it's part of the gospel, preached from the pulpit and included in the holy decrees from the Wall Street Journal op-ed pages.

The Vatican's careful protection of its shepherds is nothing compared to the protection financial journalists and analysts give to the enormous banks. They praise bad investments and cover up dubious ones. They praise those who reward them for their praise. Is this their job? Is the priesthood meant to interpret and warn or is it there to uphold the almighty? It's a sad and dangerous fact that all favors and advantages accrue upward unless something corrects the system. Peer review applies the corrective rigor to the scientific community, where even consensus has its contrarians who insist on the alternate possibility.

Competition used to apply this rigor to free enterprise. Competition gave the entire system greater stability. Failures, a natural event, still happened but they were smaller. Now we have Too Big To Fail. Now failure and consequences are only dished out to regular people––whose only mistake was believing a corporation's annual report or the admiring words of a financial analyst who privately wanted the love of the CEO and the board. Increasingly, rewards are privatized upward while risks are socialized to everybody else, to ordinary people, less exalted people, to laid off employees and to us as taxpayers.

In a quarter when Goldman Sachs announced a half billion dollar loss it also announced ten billion dollars in bonuses to the executives who delivered that loss. How many billions did the US Treasury throw at Goldman during the recent crisis? Did Goldman absorb any losses from the havoc it helped create? What is wrong with this picture? We once had restrictions on this kind of thing; we demanded them and they served us well. Until we forgot why they were there, and began believing the Reaganite fairy tale about the self-regulating genius of Wall Street. About how our economy was magically protected by fairies and elves. The bigger they are the more regulation they need. It would give the rest of us more freedom and less to worry about.

Today's Must-Read-the art of the possible and the manipulation of history

A great Ezra Klein analysis of the new Suskind book about the economic crisis and Obama's handling of it. Suskind does what opponents, critics and fantasists love doing: he simplifies complex situations, evades hard facts, ignores contradictory evidence, and assumes he would do better than the people he writes about. Economics is a dismal science, politics is an ugly business and democracy is a grueling enterprise, but all three are necessary. Fantasists do not perform well in these fields but they have no trouble writing about the practical people who do the work.

In effect, Suskind and many other Obama critics are impatient, impractical, unforgiving people, with short attention spans and short memories. Obama didn't have the luxury FDR had. FDR arrived when the worst had happened and was given a large majority to put things right. We could have done worse this time around. We may yet do better if we show, wisdom, patience, practical sense and unity.

Un-American Business

All the productivity gains of the past thirty years have been paid upwards, but, hell, that's what productivity gains do or they cease to exist.

Because "increased productivity" is another way of saying workers are working longer/harder/faster for the same or less money. (Or have been replaced by machines.)

That Americans don't understand this shows how good their media are at lying to them, disinforming them, misinforming them, how good the propaganda is. When workers applaud productivity gains they are applauding the enrichment of someone else.

American business used to honor three loyalties: to the customer, to the employees, and finally, when the other two were satisfied, to shareholders, themselves. The first two loyalties have been degraded by a devotion to profit and only profit. Because profit boosts share value and share value boosts bonuses linked to share value. Profits have become God. Because obligations to customers and employees (in a societal sense the same thing) subtract from profit they have become the great enemies of American business.

Praise of the noble employee is lip service; the nobler he/she is the less he/she will work for. (You know how sacred such things as pension obligations are if you've read Ellen Schultz's book Retirement Heist.)

Today's treasured customer is thought of in predatory terms. "New and Improved" usually means they've put more air in the cereal or made the hardware flimsier or the software buggier. A key economic shift occurred when insurance companies ceased to think of themselves as insurers of people and began thinking of themselves as raisers of capital.

The problem is capital has nowhere to go if the customer hasn't got enough income to spend on goods and services. And the customer is the employee. In the past decade American business has shifted its focus from fulfilling needs and wants to exploiting vulnerabilities and shortages and fears. We live in a predatory economy. Next stop? Kleptocracy.

Corporatocracy

There isn't a Doctor Evil plotting world domination in some remote bunker. No, it's done at Davos and Jackson Hole and the Bohemian Grove, whenever the rich and powerful get together over cocktails. They know each other, they do deals, they share interests and goals. They own us. Now there's science to prove it.

Do you think these very well organized corporations don't know how to rig wages worldwide?

Do you wonder if, maybe, they collude to profit from shortages and panics? If they profit from them, do you think they might be tempted to cause them?

Ever suspected that drug companies might actually conspire to cause shortages to keep drug prices high? How clever. (They're so carefully protected by the Republicans that Obama has had to use executive orders to fix the problem.)

Did you realize these very rich corporations also know how to avoid taxes? They're actually pretty good at it.

The word for this kind of dominance is "oligopoly". It's the opposite of a free market and very anti-democratic.

This is what the 99% are angry about. Too big to fail is too big altogether. It makes the world economy unstable and unworkable.