Posts Tagged World War II
Written By: Jason Dorrier
Posted: 04/28/13 12:38 PM
ROBOTS WILL DO EVERYTHING YOU DO NOW ONLY BETTER—WHAT THEN?
The S&P 500 is at record highs, having finally regained all it lost in the 2008 financial crisis. It would be cause for celebration if it didn’t feel so out of touch with the “main street” reality of continued high unemployment. As a recent New York Times headline read, “recovery in the US is lifting profits, but not adding jobs.”
The NYT goes on to blame the divide between rising corporate profits, recovering stocks, and stubborn unemployment on big gains in productivity over the last few years. The article notes that the giant industrial conglomerate, United Technologies, “does not need as many workers as it once did to churn out higher sales and profits.”
While United Technologies (and other manufacturing firms) may not be adding jobs, it’s strange to blame today’s high rate of unemployment on the trend. Due in large part to automation, manufacturing jobs have been disappearing for over 30 years. During that period, unemployment has been as high as 10.8% and as low as 3.8%. A better headline might read, “recovery in the US is lifting profits, but not adding traditional jobs in manufacturing and that’s nothing new.”
Credit: MJ Perry, Carpe Diem, BEA, BLS
It’s rarely noted, but even as manufacturing jobs have steadily decreased, total manufacturing output has steadily grown. Since World War II, manufacturing output in the US has risen over 700%. While rising productivity is often demonized as a job killer, in truth, it is a very powerful force for good in the modern economy.
The time and creativity that productivity growth frees—and it’s been happening since the Industrial Revolution—is responsible for every modern invention from healthcare to high tech, smartphones to non-invasive surgery. If humans hadn’t started using machines to do some things for us, most would still be working in the fields with few moments to spare pondering economic theory, let alone inventing new technologies.
One argument says that this time is different because soon robots will be able to do everything a human does. But it’s misguided to assume we can forecast what humans “will do.” What that statement really means is, “In the future, robots will do everything humans dotoday.” But what exactly it is that humans will do in the future is anyone’s guess—and few, if any, have ever successfully predicted it.
Before the 20 century, most folks in the West farmed. Now, thanks to massive productivity gains in agriculture, virtually none do. To a 19 century farmer that would imply nothing less than the collapse of the economy. Why? Because the thing most people did back then was farm. Our farmer might understandably wonder, “What will we do when machines perform our jobs for us? How will we make money? How will we survive?”
We are gifted with the vision of our times and cursed with the temptation to extrapolate that vision into the future. How could our farmer know that in 2013 humans would be paid to make movies, pick up garbage, write online, build robots, clean bathrooms, engineer rockets, lead guided tours, drive trucks, play in garage bands, brew artisanal beer, or write code?
The revolution in agricultural technology liberated vast resources and made us all richer and the economy more diverse as a result. And while one might think that those riches should have accrued to only those making agricultural tech, thus permanently widening the income gap, no such thing happened in practice. While those making agricultural machinery undoubtedly made some bucks, the next economic waves provided different work and income for many levels of skill and motivation.
This is understandably a firebrand topic right now. If current unemployment marked the beginning of mass technological unemployment, you can be sure mass social unrest would be quick to follow. But we can’t prove it’s structural yet. Unemployment is a typically lagging indicator. (Click ‘show recessions’ here to see how unemployment continues long after recessions end.) In the last sizable downturn in the early 80s, unemployment didn’t drop below 7% for four years after the recession ended. And that preceded two decades of virtually unbroken growth.
We don’t know precisely what the future holds, but we do know that most in the developed world—even the poorest—live longer, healthier lives than they did a century ago. And while the world will never be a perfect place, technology and productivity have freed more minds to ponder, play, and invent today than ever before.
- How Earnings at United Technologies Will Fare (fool.com)
- United Technologies 1Q net income, revenue rise (newsday.com)
- Earnings Preview: United Tech to report 1Q results (newsday.com)
- UTC Reports Revenues Up 16% (connecticut.cbslocal.com)
- United Technologies Sells Electric Power Systems Unit (fool.com)
- When a Successful Company Shrinks its Workforce (blogs.hbr.org)
- United Technologies Profit Exceeds Estimates on Aerospace – Bloomberg (bloomberg.com)
- Deficit Falling Even More Dramatically, Few Know It | Seeing the Forest (don-overton.newsvine.com)
- United Technologies Sells Electric Power Systems Unit (dailyfinance.com)
- UTC Selling Former Goodrich Power Systems Business (connecticut.cbslocal.com)
Posted: 25 Dec 2012
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives
Everyone now agrees that the so-called “fiscal cliff” is a stupid policy that threatens our economy and our people. Everyone agrees why the “fiscal cliff” is stupid – it inflicts austerity at a time when it is likely to throw the nation into a gratuitous recession. Causing a recession leads to increased unemployment and a larger budget deficit. We have all seen austerity force the Eurozone into a gratuitous recession in which Italy, Spain, and Greece have Great Depression levels of unemployment.
Here’s the short version of why austerity is a self-destructive response to the Great Recession. A recession occurs when demand to purchase goods and services falls and the economy contracts, causing increased unemployment. This simultaneously causes tax revenues to fall and government expenditures for programs like unemployment compensation to increase. The fall in revenues and increase in expenses causes the federal budget deficit to grow rapidly.
Austerity is a policy of raising taxes and/or cutting governmental spending for the purported purpose of cutting the deficit. If one raises overall taxes in response to the Great Recession the result is a reduction in private sector demand. If one cuts governmental spending the result is a reduction in public sector demand. The result of reducing private and public sector demand in the recovery phase from the Great Recession, where overall demand is already grossly inadequate, is to throw the nation back into recession or even a depression. That causes the budget deficit to grow. A policy of austerity undertaken under the claim that it will reduce the deficit causes a gratuitous recession that leads to a massive loss of wealth, far higher unemployment, and in increased deficit. That is why austerity is a policy that is the self-destructive economic analogy to the medical insanity of bleeding patients.
We have known that austerity is an idiotic response to a severe crisis for 75 years. The U.S. was in the midst of a strong recovery from the Great Depression until FDR’s neo-liberal economists convinced him in 1937 that is was essential that the U.S. adopt an austerity program to reduce the federal deficit. Austerity forced our economy back into a Great Depression.
It was only the stimulus of federal spending in World War II that brought the U.S. out of the depression. During World War II and for the remainder of that decade the ratio of debt-to-GDP was at or near historically record levels. The result was the greatest industrial expansion in history, full employment (including a massive influx of women), strong economic growth, and sharply declining deficits and debt-to-GDP ratio because the growth led to large increases in revenue and the low unemployment greatly reduced spending on the unemployed. We also defeated the Axis powers, created Social Security and the GI Bill, and began an extraordinary expansion of our housing stock to house the baby boom.
We learned many lessons from the catastrophic failure of austerity and the extraordinary success of stimulus in this era. The U.S. adopted a fiscal system of “automatic stabilizers.” These are counter-cyclical (they push in the opposite direction of the business cycle) fiscal effects that are designed into the system and do not require new legislation once the recession or inflation begins. The result of these automatic stabilizers has been to reduce the severity and duration of recessions. Indeed, studies show that the larger the national governmental role in the economy, the less volatile the economy. This makes sense because the stabilization function should be more effective if the stabilizers are larger relative to the economy.
Unfortunately, these sensible counter-cyclical policies that make theoretical and common sense and have repeatedly worked in the real world were forgotten by many due to a campaign of deficit hysteria funded by Pete Peterson, a Republican billionaire financier who has made it his mission in life to destroy the safety net. His ultimate goal is to privatize social security so that Wall Street can receive hundreds of billions of dollars in fees investing our retirement funds.
I’ve explained in a prior column how the fiscal cliff was created through an insane bipartisan deal in August 2011. The fiscal cliff was always a terrible job-destroying idea that also began to unravel the safety net by cutting Medicare. Everyone involved in creating the fiscal cliff acted irresponsibly and inhumanely in seeking to inflict austerity, cause a recession, and unravel the safety net.
What is forgotten, however, in discussions of the idiocy of creating the fiscal cliff is that it was part of a broader bipartisan deal intended to inflict even more self-destructive austerity and even greater damage to the safety net. The fiscal cliff was an act of idiocy in pursuit of a policy of depravity called “the Grand Bargain” that was actually the Grand Betrayal.
The bipartisan madness has increased since the August 2011 budget deal. Today, the parties are simultaneously screaming (1) that the fiscal cliff is a disaster because it imposes austerity and will cause a recession and (2) that it is essential that we agree to a Grand Betrayal that will inflict even greater austerity and cause an even more severe recession. Indeed, the Grand Betrayal mandates austerity over a decade so it is likely to cause and/or deepen multiple recessions. The Republican and Democratic variants of the Grand Betrayal are doubly destructive and inhumane because they cut the safety net. President Obama wants to begin to unravel the safety net and cut social programs even though an overwhelming majority of Democrats oppose it and even though doing so will inflict even greater austerity. That will cause a deeper recession and likely make the deficit larger, so it is as nonsensical as it is cruel.
During this this entire financial farce I have been unable to get the dominant media to make the most obvious point. Since we all agree that austerity (the fiscal cliff) is a terrible idea that will cause a recession and likely increase the deficit we must logically conclude that all variants of the Grand Betrayal are austerity programs that must be defeated in order to prevent a recession that is likely to increase the deficit. We should all be opposing any cuts in the safety net because they would inflict austerity. An overwhelming majority of Democrats and a majority of Republicans also oppose cuts in the safety net as inhumane.
So why don’t the Democrats and Republicans stop trying to do a deal that will inflict austerity? Why not simply repeal the Budget Act of August 2011? That would kill the fiscal cliff. Repeal would kill austerity, prevent the recession, save the safety net, increase growth, and shrink the deficit. All versions of the Grand Betrayal (Republican and Democratic) inflict austerity, are likely to cause a recession, begin to unravel the safety net, destroy growth, and increase the deficit.
Under the same logic we should be able to agree on two related actions – renew the extension of long-term unemployment compensation and renew the moratorium on collecting the payroll tax. These policies are superb counter-cyclical programs and have the added advantage of reducing human misery and inequality. Republicans and Democrats have agreed in the past on the desirability of both actions.
- William K. Black: Kill the ‘Fiscal Cliff’ Instead of the Economy (huffingtonpost.com)
- Bill Black: Kill the “Fiscal Cliff” Instead of the Economy (nakedcapitalism.com)
- Kill the ‘Fiscal Cliff’ Instead of the Economy (readersupportednews.org)
- What Everyone Knows About Austerity (cafehayek.com)
- Let’s Celebrate the Failure of the July 2011 Great Betrayal (ritholtz.com)
- Why Jobs Should be Obama’s Top Priority — Not Suicidal Austerity (alternet.org)
- Bill Black: Let’s Celebrate the Failure of the July 2011 Great Betrayal (nakedcapitalism.com)
- Aaron Pacitti: Austerity and the Consolidation of Elite Power (huffingtonpost.com)
- Our Christmas Gift From Washington: Recession and Unemployment (forbes.com)
- Bill Black: Jobs Now – Make Obama’s Priority Reality and Expose the Lie of Lazy Laborers (nakedcapitalism.com)
Romney: ‘We Should Never Apologize For American Values Or Japanese Internment Camps’ | The Onion – America’s Finest News Source
Romney: ‘We Should Never Apologize For American Values Or Japanese Internment Camps’
JACKSONVILLE, FL—Criticizing the Obama administration’s response to the current crisis in Libya and Egypt, Mitt Romney told reporters Wednesday that we should never, under any circumstance, apologize for the values that make this country great, such as our belief in the right to practice religion without persecution, our commitment to the freedom of assembly, or the overwhelming xenophobia that led to the relocation and internment of more than 110,000 Japanese-Americans during World War II. “As Americans, we should never feel the need to question who we are or what we stand for, whether it’s our strong commitment to family or whether we’re rounding up a group of innocent people, separating them from their friends and loved ones, and putting them into what are essentially overcrowded prisons because they happen to be of Japanese descent,” Romney told the assembled press corps, adding that free speech and concentration camps are American ideals that should be cherished, not second-guessed. “So if you ask me, should we ever apologize for freedom, justice, honor, or how we perverted those beliefs to justify one of the most horrifying acts of prejudice in American history, the answer is no.” When asked by reporters what American values are exactly, or what the phrase American values even means, Romney stared at the press, blinked several times, and walked off stage.
- Romney: ‘We Should Never Apologize For American Values Or Japanese Internment Camps’ (theonion.com)
- Utah museum to honor Japanese internment camp (sacbee.com)
- Paul Ryan Cuts $120 Million In Wasteful Spending From Romney Campaign | The Onion – America’s Finest News Source (mbcalyn.com)
- Romney Stares Uncomprehendingly At $1 Bill | The Onion – America’s Finest News Source (mbcalyn.com)
- Utah museum to honor Japanese internment camp (cbsnews.com)
- Best They Could Get Accepts Republican Nomination | The Onion – America’s Finest News Source (mbcalyn.com)
- Utah museum to honor Japanese internment camp (abc4.com)
- You: Japanese American internment camp museum breaks ground in Utah (latimes.com)
- Embassy Row (slate.com)
- Romney Privately Wondering How In The Name Of Fuck He’s Going To Appeal To Asian Voters | The Onion – America’s Finest News Source (mbcalyn.com)
When Capitalists Cared
By HEDRICK SMITH
Published: September 2, 2012
IN the rancorous debate over how to get the sluggish economy moving, we have forgotten the wisdom of Henry Ford. In 1914, not long after the Ford Motor Company came out with the Model T, Ford made the startling announcement that he would pay his workers the unheard-of wage of $5 a day.
Not only was it a matter of social justice, Ford wrote, but paying high wages was also smart business. When wages are low, uncertainty dogs the marketplace and growth is weak. But when pay is high and steady, Ford asserted, business is more secure because workers earn enough to become good customers. They can afford to buy Model Ts.
This is not to suggest that Ford single-handedly created the American middle class. But he was one of the first business leaders to articulate what economists call “the virtuous circle of growth”: well-paid workers generating consumer demand that in turn promotes business expansion and hiring. Other executives bought his logic, and just as important, strong unions fought for rising pay and good benefits in contracts like the 1950 “Treaty of Detroit” between General Motors and the United Auto Workers.
Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II, from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today.
The chief executives of the long postwar boom believed that business success and workers’ well-being ran in tandem.
Frank W. Abrams, chairman of Standard Oil of New Jersey, voiced the corporate mantra of “stakeholder capitalism”: the need to balance the interests of all the stakeholders in the corporate family. “The job of management,” he wrote, “is to maintain an equitable and working balance among the claims of the various directly affected interest groups,” which he defined as “stockholders, employees, customers and the public at large.”
Earl S. Willis, a manager of employee benefits at General Electric, declared that “the employee who can plan his economic future with reasonable certainty is an employer’s most productive asset.”
From 1948 to 1973, the productivity of all nonfarm workers nearly doubled, as did average hourly compensation. But things changed dramatically starting in the late 1970s. Although productivity increased by 80.1 percent from 1973 to 2011, average wages rose only 4.2 percent and hourly compensation (wages plus benefits) rose only 10 percent over that time, according to government data analyzed by the Economic Policy Institute.
At the same time, corporate profits were booming. In 2006, the year before the Great Recession began, corporate profits garnered the largest share of national income since 1942, while the share going to wages and salaries sank to the lowest level since 1929. In the recession’s aftermath, corporate profits have bounced back while middle-class incomes have stagnated.
Today the prevailing cut-to-the-bone business ethos means that a company like Caterpillar demands a wage freeze and lower health benefits from its workers, while posting record profits.
Globalization, including the rise of Asia, and technological innovation can’t explain all or even most of today’s gaping inequality; if they did, we would see in other advanced economies the same hyperconcentration of wealth and the same stagnation of middle-class wages as in the United States. But we don’t.
In Germany, still a manufacturing and export powerhouse, average hourly pay has risen five times faster since 1985 than in the United States. The secret of Germany’s success, says Klaus Kleinfeld, who ran the German electrical giant Siemens before taking over the American aluminum company Alcoa in 2008, is “the social contract: the willingness of business, labor and political leaders to put aside some of their differences and make agreements in the national interests.”
In short, German leaders have practiced stakeholder capitalism and followed the century-old wisdom of Henry Ford, while American business and political leaders have dismantled the dynamics of the “virtuous circle” in pursuit of downsizing, offshoring and short-term profit and big dividends for their investors.
Today, we are all paying the price for this shift. As Ford recognized, if average Americans do not have secure jobs with steady and rising pay, the economy will be sluggish. Since the early 1990s, we have been mired three times in “jobless recoveries.” It’s time for America’s business elites to step beyond political rhetoric about protecting wealthy “job creators” and grasp Ford’s insight: Give the middle class a better share of the nation’s economic gains, and the economy will grow faster. Our history shows that.
- When Capitalists Cared (nytimes.com)
- DEAR AMERICAN COMPANIES: Here’s How To Fix The Economy – Business Insider (tribuneofthepeople.com)
- Abbreviated pundit round-up: The war on workers doesn’t stop to catch its breath on Labor Day (dailykos.com)
- Dear American Companies: Here’s How to Fix the Economy (dailyfinance.com)
- Bloomingdale: Work connects us all (goerie.com)
- Ford Seeks Relief From Most Expensive Workers – Bloomberg (bloomberg.com)
- Wages, pensions top Ford’s cost-cutting list (windsorstar.com)
- Ford Ranger: The End Of An Era (newcarquotesonline.com)
- GM Unfriends Facebook, Ford Changes Status to Engaged (keystoneautoloans.com)
- CAW, Detroit Three remain far apart: Lewenza (blogs.windsorstar.com)
Todd Akin questions Holocaust: “If it had been a legitimate genocide, God would have smited the Germans”
August 20, 2012
By Sarah Wood
Recently Rep. Todd Akin (R-MO) has been in the news for explaining how women cannot become pregnant if they are legitimately raped.
“If it’s a legitimate rape, the female body has ways to try to shut that whole thing down”
Looking back on his history of horrible misunderstandings of how the world works, our researchers here at Free Wood Post found an old quote from an early interview with Rep. Akin referring to the Holocaust during WWII.
In 2002, during his first reelection campaign he did an interview with his local paper in Missouri around the time of VE Day (Victory in Europe Day) where the World War II Allies formally accepted the surrender of the armed forces of Nazi Germany, ending the war in Europe. During the interview he was asked about how he felt in regards to celebrating the triumph over Adolf Hitler and all the wrong doings he had done, including the Jewish concentration camps. Rep. Akin replied,
“I think it is wonderful that we were victorious in overcoming the German occupation in Europe that killed thousands. However, I’m not certain that there were Jewish concentration camps. If it had been a legitimate genocide, God would have smited the Germans, and there would’ve have been no reason for us to become involved in the conflict. World War II was simply a power grab by Adolf Hitler, and we went in to make sure he didn’t take over the world… and we succeeded.”
Now, if Rep. Akin truly believes this, how in the world has he been reelected not just once, but five times? He clearly has no grasp on the reality of history, or that of the reproductive system. Has he not seen ample evidence and documentation throughout the years that there were indeed concentration camps that murdered thousands of Jews during Hitler’s reign over Nazi Germany? Has he never picked up a book in his entire life?
This man is an embarrassment to the American people, and an insult to all those who perished during WWII. What next, he’s going to tell us that Abraham Lincoln was shot by his wife, or that Pearl Harbor was an inside job? This man is out of his mind. Hopefully come November the constituents within his state will not elect him for the Senate.
- Adolf Hitler becomes Chancellor of Germany. (wadewilsonwhitenews.wordpress.com)
- Todd Akin and Paul Ryan: Conservatives in Arms (mbcalyn.com)
- Adolf Hitler Would Never Have Done That. (vidrebel.wordpress.com)
- Catholic Church Close Ties To Christian Republicans – Christian Nazi Party Close Ties To Catholic Church (truelogic.wordpress.com)
- Adolf Hitler in Blackpool crazy golf course (thejc.com)
- Raging Grannies take on Todd Akin’s legitimate rape comment (bodaciousbobo.wordpress.com)
- Hitler Protected Jewish Vet, Newly Discovered Nazi-era Letter Suggests (ibtimes.com)
- Adolf Hitler in Blackpool golf course art show (thejc.com)
- Did Thoreau Have It Right? – by Robert Ringer (robertringer.com)
- Adolf Hitler Miniature Golf Statue Stirs Controversy At English Art Gallery (chicago.cbslocal.com)
The Elites Are Unanimous: Lower Everyone’s Wages and Standard of Living — Except They Don’t Say it Out Loud | Economy | AlterNet
The Elites Are Unanimous: Lower Everyone’s Wages and Standard of Living — Except They Don’t Say it Out Loud
America’s 1% are in harmony on the matter that concerns them most — who gets the biggest slice of the pie.
July 19, 2012
Calls for a bipartisan “Grand Bargain” on taxes and spending for the next decade ring out daily, if not hourly, from the politicians and pundits who dominate our political media. But the national discourse is silent on the tacit agreement both parties have already made on the future that lies ahead for the majority of working Americans: a dramatic drop in their living standards.
The United States can no longer satisfy the three great dreams that have driven most of its domestic politics since the end of World War II: the multinational corporate class’s dream of limitless profits; the military-industrial complex’s dream of global hegemony; and the dream of the people for rising incomes and expanding opportunities. One out of three? Certainly. Two out of three? Maybe. All three? No.
So far, Corporate America gets priority boarding in the economic lifeboat – with the safest seats reserved for Wall Street. Four years after the crash, the financial sector remains heavily subsidized with cheap federal loans that it uses to buy higher yielding bonds, speculate in exotic IOUs and pay outrageous salaries to those at the top. Larger than ever, they are more than ever “too big to fail.” As a result, Wall Street continues to divert the nation’s capital away from investment in sustainable high-quality jobs in America.
Next in line is the Pentagon and its vast network of corporate contractors, members of Congress with military facilities in their districts and media propagandists for the empire. The administration, along with some libertarian Republicans, insists that military spending will not be spared in the coming era of austerity, and has proposed modest cuts over the next decade. At the same time, virtually all of Washington supports the policies that require huge defense budgets, i.e., remaining in the Middle East, expanding in Latin America and containing China in its own neighborhood. The threatened across-the-board cuts in federal spending that become automatic if a long- term budget deal is not made by December will almost certainly be finessed in order to protect the military budget.
All of which leaves the American middle class on a badly listing, although not yet sinking, economic ship. Even before the financial crash, real wages for the typical American worker had been stagnant for 30 years as a result of: 1) trade and investment deregulation that shoved American workers into a brutally competitive global labor market for which they were unprepared; 2) the relentless war on unions that began with the election of Ronald Reagan in 1980; and 3) more recently, the erosion of the social safety net for low wage workers and the unemployed.
Still, workers continued to spend, and thus maintain national economic growth. While hourly wages flattened, overall family income rose because more women went to work. And cheap and accessible credit fueled everyone’s purchasing power
Today, with more women than men now employed, gains to family income from sending the wife to work are about exhausted. And given the huge overhang of non-payable debt on the part of both banks and consumers it will be a generation, if ever, before we see anther credit balloon strong enough to lift up the economy. So, now that these financial props have been knocked away, the trajectory of American incomes and living standards is a downward slope.
This decline will not be reversed by the long-awaited upturn in the currently stalled business cycle. Even with optimistic assumptions – e.g., that there will be no new recession, Europe avoids collapse, big US banks remain solvent — there is little prospect for a sustained boom in the demand for American labor sufficient to overcome the downward pressure on workers’ share of the economic pie. Cost cutting has become the central strategy for most American business, and for most of them the easiest cost to cut is labor.
The squeeze is not limited to workers in export or import-vulnerable industries. Wages and salaries are now falling across the board, in services and manufacturing sectors, among women and men, young and old. Health and pension benefits are being slashed and businesses are getting their work done with part-time and temporary workers, often supplied by labor contractors whose own survival depends on hiring labor at the cheapest rate possible.
Moreover, going to college is no longer the escape route for the vast majority of young people without elite connections or rich parents. The Bureau of Labor Statistics projects that between 2010 and 2020, nine out of 10 of the largest and fastest growing occupational categories will not require a college education. And the tenth, which includes medical professionals and college teachers, are likely to suffer dramatically in the coming age of fiscal austerity. The bright college graduates working as retail clerks at the Apple Store for $12 an hour are beginning to sense that their jobs do not represent a pause on the way up the professional ladder, but rather are a taste of their long-term future.
In the first few month of his term, Barack Obama signaled that he understood that the crisis of the middle class was more than a temporary condition of the business cycle. “We cannot rebuild this economy on the same pile of sand,” he said. “ We must build our house upon a rock… a foundation that will move us from an era of borrow and spend to one where we save and invest.”
The building blocks of a new high-wage foundation are reasonably clear: 1) large government-led investment in infrastructure, education and new technologies that can create demand for jobs in both the short and long run; 2) Strict regulation of Wall Street and new trade policies to re-channel the country’s private capital away from short-term speculation and back to long term investment in producing high value-added goods and services in America; 3) a shift in national security policy away from world dominance and toward a a narrower definition of national defense.
Three and a half years later we are still stuck in the economic sand pile. The prolonged recession has further weakened the economy’s underpinnings and the failure of a “liberal” president to restore growth has discredited government – the institution that must lead any successful transition to a new economic path.
Certainly, most of the blame lies with the reactionary Republicans whose fear of their lunatic fringe trumps loyalty to their country. And there’s been some bad luck, such as the European crisis. But Obama shares some culpability. He took up the Bush plan for no-strings Wall Street bailouts, expanded unregulated trade, cold-shouldered his union base, and has now adopted fiscal austerity as his economic priority. Whether you think the president is a wimp, a willing tool of Wall Street or a political saint mugged by right-wing thugs, the fact remains that he could or would not engage in all-out battle for the economic transformation he so eloquently promised.
The last four years have demonstrated that, taken together as a governing class, the leaders of our two-party system are currently unwilling to do what is necessary to reverse declining standards. As for the next four, given the choice, Obama is clearly the better option. Under Democrats, the slide will be less steep and rough. Whoever the “real” Romney might be, the extinction of Republican moderates among the Party’s pool of potential policymakers means that his administration will be largely staffed by conservative fundamentalists and corporate fixers who can’t wait to return us to the dog-eat-dog labor markets of the pre-New Deal.
But Obama, if re-elected, will certainly not have a greater congressional majority than he had in 2009. Moreover, given the massive campaign contributions he will have had to raise from Wall Street and the rest of Corporate America, the elite investor class will play an even more influential role in his victory. Add in the bipartisan commitment to budget austerity, and chances of a significant progressive shift in Washington’s economic policies over the next presidential term become virtually zero.
The mantra of both candidates is, “Jobs, jobs, jobs.” What they leave out is that, because they are unwilling to confront the power of Wall Street and the Pentagon, job growth in America now depends on driving labor costs lower loser and lower to attract business investment. This is the heart of the leveraged-buy out system that Romney offers to bring to the White House. And when Barack Obama cites an expanded GE plant in Kentucky as an example of the rebound of private sector jobs, the press release does not mention that workers who used to make $22 an hour are now making $14.
None of this is a secret to most of our governing class. Certainly, the CEOs and their major shareholders know it. Their economists know it. So do all but the most hopelessly ideological of policymakers. But acknowledging where future living standards are heading would require our political leaders to offer remedies that are unacceptable to Wall Street and the military-industrial complex. Safer not to look into the economic abyss and trust in good old American optimism.
Neither does the public want to stare too hard into the future. Majorities think that the next generation is going to be worse off, but they expect that they, personally, and their kids will be okay. So, while they might agree with the points made by the Wall Street Occupiers, it’s not worth the effort to join the protest. A PEW poll last fall reported that by a margin of 63-21 Americans believed that, “although there may be bad times every now and then, America will always continue to be prosperous and make economic progress.”
The American writer James Baldwin wrote, “Not everything that is faced can be changed, but nothing can be changed until it is faced.” Until Americans face that they and their kids will not be okay, and that their own personal future depends on their ability to find leaders to willing to act on that reality, the implicit Washington grand bargain will remain in force. And we will continue on the road toward lower wages, falling living standards and blasted hopes.
- The Elites Are Unanimous: Lower Everyone’s Wages and Standard of Living — Except They Don’t Say it Out Loud (alternet.org)
- Minimum wage plus in-work benefits are still not necessarily enough for a minimum standard of living (blogs.lse.ac.uk)
- Are We Headed Toward A Servant Economy? (talkingunion.wordpress.com)
- Falling cost of living ‘won’t cure crisis in living standards’ (itv.com)
- ZFE should not be confrontational over minimum wage hike (times.co.zm)
- Groups call for higher minimum wage (kansascity.com)
- Soaring childcare and transport costs hit families hard (guardian.co.uk)
- Limited Government Works; Socialism Kills (economicnoise.com)
- Fifty shades of capitalism (salon.com)
- Socialist Canadians Wealthier Than Capitalist Americans? (outsidethebeltway.com)
What happens if America loses its unions
In the wake of labor’s defeated effort to recall Wisconsin Gov. Scott Walker (R) last week, both pro- and anti-union pundits have opined that unions are in an all-but-irreversible decline. Privately, a number of my friends and acquaintances in the labor movement have voiced similar sentiments. Most don’t think that decline is irreversible but few have any idea how labor would come back.474
What would America look like without a union movement? That’s not a hard question to answer, because we’re almost at that point. The rate of private-sector unionization has fallen below 7 percent, from a post-World War II high of roughly 40 percent. Already, the economic effects of a union-free America are glaringly apparent: an economically stagnant or downwardly mobile middle class, a steady clawing-back of job-related health and retirement benefits and ever-rising economic inequality.
In the three decades after World War II the United States dominated the global economy, but that’s only one of the two reasons our country became the first to have a middle-class majority. The other is that this was the only time in our history when we had a high degree of unionization. From 1947 through 1972 — the peak years of unionization — productivity increased by 102 percent, and median household income also increased by 102 percent. Thereafter, as the rate of unionization relentlessly fell, a gap opened between the economic benefits flowing from a more productive economy and the incomes of ordinary Americans, so much so that in recent decades, all the gains in productivity — as economists Ian Dew-Becker and Robert Gordon have shown — have gone to the wealthiest 10 percent of Americans. When labor was at its numerical apogee in 1955, the wealthiest 10 percent claimed just 33 percent of the nation’s income. By 2007, with the labor movement greatly diminished, the wealthiest 10 percent claimed 50 percent of the nation’s income.
Today, wages account for the lowest share of both gross domestic product and corporate revenue since World War II ended — and that share continues to shrink. An International Monetary Fund studyreleased in April shows that the portion of GDP going to wages and benefits has declined from 64 percent in 2001 to 58 percent this year. The survey compared the United States with Europe, where the only other nations in which labor’s share declined were Greece, Spain and Ireland — countries whose economies are at death’s door. Our economy is nowhere near so weak, but as Americans’ ability to collectively bargain has waned, so has their power to keep all corporate revenue from going to top executives and shareholders.
When unions are powerful, they boost the incomes of not only their members but also of nonunion workers in their sector or region. Princeton economist Henry Farber has shown that the wages of a nonunion worker in an industry that is 25 percent unionized are 7.5 percent higher because of that unionization. Today, however, few industries have so high a rate of unionization, and a consequence is that unions can no longer win the kinds of wages and benefits they used to.
Deunionization is just one reason Americans’ incomes have declined, of course; globalization has taken its toll as well. But the declining share of pretax income going to wages is chiefly the result of the weakening of unions, which is the main reason American managers now routinely seek to thwart their workers’ attempts to unionize through legally questionable but economically rewarding tactics (rewarding, that is, for the managers).
The weakening of unions has had a huge political effect as well: the realignment of the white working class. Since the ’60s, exit polls have shown that unionized blue-collar whites vote Democratic at a rate 20 to 30 percent higher than their nonunion counterparts. The decline in union membership has weakened Democrats in such heavily white, increasingly deunionized states as West Virginia and Wisconsin — the main reason Republicans such as Walker have sought to reduce labor’s numbers. Liberals who have been indifferent to unions’ decline will find it difficult to enact progressive legislation in their absence.
Understandably, some liberals are searching for ways to arrest the economic decline of the majority of their fellow Americans in a post-union environment. I fear they’re bound to be frustrated. If workers can’t bargain with their employers, it can’t be done. If and when Big Labor dies — it’s on life support now — America’s big middle class dies with it.
- Why I Think Unions are Doomed (motherjones.com)
- Labor Unions are not dead. They are reloading. (americanthinker.com)
- The Declining Popularity of Teacher Labor Unions #TCTOT (conservativeteachersofamerica.com)
- Concentrated wealth is a long-term threat to America – The Washington Post (mbcalyn.com)
- Union Donations to Business Group Show Fracture in Labor Movement (nytimes.com)
- MATT WELCH: Get Serious About Governing, Democrats: No amount of crying over evil Scott Walker wil… (pjmedia.com)
- Charles Krauthammer: What Wisconsin means – The Washington Post (mbcalyn.com)
- Union basics the media often gets wrong – and ways right-wing messaging sneaks into labor coverage (dailykos.com)
- Here Are Some Highlights of Target’s Illegal Anti-Union Exploits [Corporate America] (gawker.com)
- The “People United” Go Down In Flames (blogs.the-american-interest.com)
Yugoslavia’s lessons for Europe’s disunion
By Charles Lane, Published: May 28
Once upon a time in Europe, there was a confederation. It stretched from the Alps to the Adriatic and straddled the ancient line between Western Christendom and Byzantium.
The confederation promised an eternal end to the wars that had historically bedeviled its component peoples. It built goodwill and interdependence through a common currency and free movement of labor and capital.
Espousing peace, equality and human rights, the confederation offered a “third way” between the callousness of American-style capitalism and the inefficiency of central planning.
It also offered an alternative power center to countries not content to choose their allies from among the United States, China and Russia.
But Yugoslavia collapsed in 1991, after more than a decade of steadily escalating strife. And its downfall was accompanied by renewed ethnic warfare even bloodier than the World War II-era fighting the postwar confederation was supposed to abolish.
I wouldn’t overstate the analogy between Yugoslavia and today’s troubled European Union. Yugoslav “market socialism” was more authoritarian than the social democracy of Europe. For all the talk of “brotherhood and unity” at home and “non-alignment” abroad, what really held Yugoslavia together was the iron fist of its chieftain, Josip Broz Tito, who died in 1980 and was succeeded by a succession of ineffectual, unelected bureaucrats.
The end of Soviet-U.S. competition relaxed the East-West tension that had helped force the Yugoslav peoples together from the outside.
But I wouldn’t understate the analogy, either. Like the European Union, Yugoslavia was constantly trying bureaucratic fixes for deep-rooted rivalries — between Albanians and Serbs, Serbs and Croatians. Leadership shuffles, duplicative institutions and constitutional rewrites papered over but never eliminated them, even though almost all Yugoslav nationalities spoke the same language.
Tito used debt-fueled economic growth to buy peace; when the bills came due, fiscal austerity added yet another political irritant.
So the crisis Europe faces today is not all that unprecedented. It is not merely a financial or economic one. The deeper question is how — or whether — any multinational confederation can survive in the land mass between the Urals and the Atlantic, long after the world war that originally justified it and the Cold War that helped perpetuate it. How is the E.U. to escape the fate of every previous empire and confederation in European history?
When viewed that way, Europe’s predicament looks difficult indeed.
Franco-German rivalry helped cause one continental bloodletting after another, the most monstrous of which was World War II. United Europe was supposed to tie France and postwar West Germany so tightly together, economically, that war would become impossible.
This was both a noble and, potentially at least, feasible project. But it is clear in hindsight that the authors of European unification have oversolved the original problem.
They could have had Franco-German peace without giving Spain and Finland a veto over policies that affect the German and French peoples, and vice versa. They could have had free trade and mobile capital without pretending that Greece and the Netherlands belong in a currency union.
Did the E.U. overexpand and overreach because France wanted a vehicle for its own unrealistic foreign policy ambitions? Or because poorer countries in Europe were eager for privileged access to Germany’s money? It hardly matters now.
The fact is, Europe is stuck with this confederation, yet it is no longer solvent, politically or economically.
Short-term efforts at muddling through occupy the continent’s politicians. But they are pushing against tectonic forces that are shifting against the E.U., just as surely as similar forces ground away at the Holy Roman Empire and Yugoslavia.
There are only two ways forward. One is breakup; though not likely to be as bloody as the Yugoslav meltdown, an E.U. collapse, even a gradual one, would impoverish the continent and leave a toxic residue of nationalist rancor.
The other choice, of course, is to follow the perennial prescription — “more Europe.” The only cure for the ills of today’s relatively loose confederation is a tighter one, it is said.
What this means in practice, however, is the surrender of more national sovereignty to Brussels, to include, for the first time, elected parliaments’ loss of control over basic financial decisions.
Nor will this cession of power be symmetrical: Germany and other wealthy nations will determine the new rules of the game and debtor nations will follow them — not uncomplainingly.
United Europe’s future, if it has one, looks more austere, more contentious and — above all — less democratic than its present. And I repeat: This is the optimistic scenario.
- Forgotten Tributes: 25 Monumental Relics of Yugoslavia (weburbanist.com)
- George Vujnovich (telegraph.co.uk)
- War-scarred Bosnia remains divided (vancouversun.com)
- Country Profiles: Serbia (trifter.com)
- Remembering the Cellist of Sarajevo and What He Represented (poietes.wordpress.com)
- Graveyard Humor in Belgrade (counterpunch.org)
- 11. Socialist Federal Republic of Yugoslavia (thedeadflagsproject.wordpress.com)
- “25 Abandoned Yugoslavia Monuments that look like they’re from the Future” via Crack Two (lifemusicfun.com)
- KUHNER: Did Serbia vote for war? – Washington Times (zokstersomething.wordpress.com)
- Ratko Mladic: Brutal villain to many, hero to others (edition.cnn.com)
Leave the Voting Age Alone
Jenny Diamond Cheng is a lecturer in law at Vanderbilt Law School.
MAY 28, 2012
The 26th Amendment, ratified in 1971, establishes 18 as the minimum voting age for both state and federal elections. Like all lines that divide legal childhood from adulthood, the voting age is essentially arbitrary. Indeed, in modern America 18-year-old voting has become unmoored from one of its more important original justifications, which was matching the minimum age for draft eligibility (itself also an arbitrary line). Despite this, raising or lowering the voting age, as some groups have suggested, seems a waste of time at best.
Interest in improving young adults’ political participation would be better focused on attacking barriers like residency requirements that exclude college students and voter ID laws that disfavor young and mobile voters.
The American colonies mostly set their voting ages at 21, reflecting British common law. This requirement went largely unchallenged until World War II, when several members of Congress proposed amending the Constitution to lower the age to 18. Between 1942 and 1970 federal legislators introduced hundreds of such proposals, but the issue lacked momentum until the late 1960s, when a confluence of factors — including the escalating war in Vietnam — pushed 18-year-old voting closer to the surface of the national political agenda. The 26th Amendment itself was the culmination of some creative political maneuvering by Congressional advocates, with a crucial assist from the Supreme Court in Oregon v. Mitchell.
As a historical matter, the significance of the soldier-voter link has been somewhat overstated. The amendment’s passage was propelled by a small group of federal legislators whose motivations and rationales were considerably more complex than commonly thought. Still, the Vietnam-era slogan, “Old enough to fight, old enough to vote,” was unquestionably a powerful claim, encompassing deeply embedded ideas about civic virtue, adulthood and fairness.
Tying voting to soldiering was always problematic, though, and it is even more so today. The contemporary U.S. military is an all-volunteer force and only a small fraction of Americans ever serve. Selective Service registration applies only to males and the possibility of an actual draft is remote. Yet there is no life moment to which the voting age might be more obviously tethered, and any bright-line rule will inevitably seem unfair to some.
Interest in improving young adults’ political participation would be better focused on attacking barriers like residency requirements that exclude college students and voter ID laws that disfavor young and mobile voters, sometimes egregiously. Tennessee’s new law, for example, specifically disallows students, but not university employees, from using state university ID cards at the polls. More broadly, young Americans suffer from the same challenges to meaningful representation and governance that plague our democracy at all levels. The voting age is the least of their problems.
- ACLU, NAACP To Sue PA On Behalf Of Woman, 95, Over Voter ID Laws (crooksandliars.com)
- Raise the Voting Age (atlasshrugs2000.typepad.com)
- Opinion: Congratulations, grad, you’re unemployed – Karin Agness – POLITICO.com (mbcalyn.com)
- Don’t make voting too convenient (seattletimes.nwsource.com)
- Politics Assessment – Evaluation (andybirkett1975.wordpress.com)
- Disenfranchising Voters is Downright UnAmerican! (skydancingblog.com)
- Politics Assessment – Choosing the Story (andybirkett1975.wordpress.com)
- Voter ID Does NOT Equal Disenfranchisement (standupforamerica.wordpress.com)
- This 93-Year-Old Grandmother Is Suing Pennsylvania Over Voter ID Laws (thinkprogress.org)
- False Conclusions About Georgia’s Voter ID Impacts (gangsgoonsandgunz.rahrahrecords.com)