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Thanks in large part to higher taxes on the wealthy, which Republicans said would not reduce the deficit, deficit reduction is picking up speed at a pace few could have predicted. We’re now looking at over $400 billion in deficit reduction in just one year, and about $800 billion in deficit reduction since President Obama took office…. It’s fair to say this problem has been largely fixed…. Let’s also not forget that Republican talking points on fiscal policy have effectively been left in tatters, and every conservative political figure who’s declared ‘Socialist Obama is turning America into Greece!’ looks incredibly foolish right now.
The right’s fiscal criticisms of the Obama White House are the exact opposite of reality.
(via liberalsarecool) - While the high jobless numbers are partly a legacy of the Great Recession, the fact is that our economy has generated too few jobs for most of the last 30 years and is likely to continue to do so. The only viable response is a return to an idea that once animated domestic policy making: full employment, the notion that everyone who wants to work should be able to find a job, and if the market isn’t up to the task, then the government must fill the gap.
- In desert societies — including the American Southwest — water is so precious that it is money. People connive and fight and die over it; governments covet it; marriages are even made and broken because of it. If one were to talk to a person who has known only that desert and tell him that in the city there are public water fountains and that children are even sometimes allowed to turn on the fire hydrants in the summer and to frolic in the water, he would be sure one were crazy. For he knows, with existential certitude, that it is human nature to fight over water. Mankind has lived now for several millennia in the desert. Our minds and emotions are conditioned by that bitter experience; we do not dare to think that things could be otherwise. Yet there are signs that we are, without really planning it that way, marching out of the desert. There are some who loathe to leave behind the consolations of familiar brutalities; there are others who in one way or another would like to impose the law of the desert upon the Promised Land. It may even be possible that mankind cannot bear too much happiness. It’s also possible that we will seize this opportunity and make of the earth a homeland rather than an exile. This is the socialist project. It does not promise, or even seek, to abolish the human condition, for that is impossible. It does propose to end that invidious competition and venality which, because scarcity allowed no other alternatives, we have come to think are inseparable from our humanity.
- When the economy is understood in 21st-century terms, as an ecosystem, it becomes obvious that jobs don’t squirt out of business-people like jelly from doughnuts. Rather, jobs are the consequence of the feedback loop between customers and businesses. For this reason, it is middle-class consumers and the demand they create that are our true job creators, not rich business-people. Given this, it is counter-productive to build a tax system that asymmetrically benefits the people at the very top. We all are better off — business-people and consumers, rich and poor — if the burden of taxes is placed at the top and not the middle, enabling middle class citizens to consume, and starting the positive feedback loop of job creation again.
- The most important point to realize is that the problem facing wealthy countries at the moment is not that we are poor, as the stern proponents of austerity insist. The problem is that we are wealthy. We have tens of millions of people unemployed precisely because we can meet current demand without needing their labor. This was the incredible absurdity of the misery that we and other countries endured during the Great Depression, and which Keynes sought to explain in The General Theory. The world did not suddenly turn poor in 1929, following the collapse of the stock market. Our workers had the ability to produce just as many goods and services the day after the collapse as the day before; the problem was that after the crash, there was a lack of demand for these goods and services.
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Income Inequlaity = Recession/Depression
“Many pundits assert that the U.S. economy has big structural problems that will prevent any quick recovery. All the evidence, however, points to a simple lack of demand, which could and should be cured very quickly through a combination of fiscal and monetary stimulus. No, the real structural problem is in our political system, which has been warped and paralyzed by the power of a small, wealthy minority. And the key to economic recovery lies in finding a way to get past that minority’s malign influence.” - Paul Krugman
The takeover of half our political spectrum by the 0.01 percent is, Krugman argues, responsible for the degradation of our economic discourse, which has made any sensible discussion of what we should be doing impossible.
- But now, three-quarters of a century later, we are no longer talking about theoretical alternatives to corporate rule. We are talking with practical urgency about an obvious need. Now the two great aims of industrialism—replacement of people by technology and concentration of wealth into the hands of a small plutocracy—seem close to fulfillment. At the same time the failures of industrialism have become too great and too dangerous to deny. Corporate industrialism itself has exposed the falsehood that it ever was inevitable or that it ever has given precedence to the common good. It has failed to sustain the health and stability of human society. Among its characteristic signs are destroyed communities, neighborhoods, families, small businesses, and small farms. It has failed just as conspicuously and more dangerously to conserve the wealth and health of nature. No amount of fiddling with capitalism to regulate and humanize it, no pointless rhetoric on the virtues of capitalism or socialism, no billions or trillions spent on “defense” of the “American dream,” can for long disguise this failure. The evidences of it are everywhere: eroded, wasted, or degraded soils; damaged or destroyed ecosystems; extinction of species; whole landscapes defaced, gouged, flooded, or blown up; pollution of the whole atmosphere and of the water cycle; “dead zones” in the coastal waters; thoughtless squandering of fossil fuels and fossil waters, of mineable minerals and ores; natural health and beauty replaced by a heartless and sickening ugliness. Perhaps its greatest success is an astounding increase in the destructiveness, and therefore the profitability, of war.
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☛ Manufacturing Stupidity
An alternative explanation is the one I’ve explored in my writings on the disappearance of human labor from production—most notably, in “Four Futures”. My analysis of the political economy (recently summarized and seconded by Matt Yglesias) is that we are experiencing a slow transition from a capitalist order in which accumulation is based on the exploitation of labor, into a “rentist” order based on rents accruing to land or intellectual property. Such a society is not, in my view, functionally compatible with the ideals of broadly-distributed critical thinking or practical work skills.
In a rentist order, an increasing percentage of the population becomes superfluous as labor—but they are still necessary as consumers. For reasons of ideological legitimacy and political control, the fiction that everyone must “work” is maintained, but work itself must increasingly be pointless make-work. What kind of populace is suited to this habit of passive consumption and workday drudgery? One that accepts nonsensical and arbitrary rules—whether they are the rules of endless work or endless consumption. Students who learn to answer the questions the testing bureaucracy wants answered, irrespective of their relationship to scientific knowledge or logic, will be well trained to live in this world.
- Few Americans realize the size of the problem. Healthcare costs America $2.5 trillion a year. That’s a problem alone. Remember, at the same time, the wars in Afghanistan and Iraq have cost the U.S. about $200 billion a year. That’s tiny compared to healthcare costs. You hear people say, “If we weren’t involved in two wars, we could afford healthcare costs.” No we couldn’t. It wouldn’t make much of a difference. But here’s the bigger point about healthcare: Defense spending totals $1 trillion a year, but we’re winding it down. The problem with healthcare costs is that they’re accelerating: They’ll grow from $2.5 trillion to $4.5 trillion within 10 years because they’re growing at about 6% a year. So if we can’t get that fixed, organizations won’t be lean enough to grow or to do other things they need to do, like export. Healthcare costs have become the biggest problem that companies have — or cities, counties, states, and the federal government. Nobody can afford healthcare. This is the biggest barrier to job creation that America has.
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Everything we’d been told for the last decade turned out to be a lie. Markets did not run themselves; creators of financial instruments were not infallible geniuses; and debts did not really need to be repaid – in fact, money itself was revealed to be a political instrument, trillions of dollars of which could be whisked in or out of existence overnight if governments or central banks required it. Even the Economist was running headlines like “Capitalism: Was it a Good Idea?”
It seemed the time had come to rethink everything: the very nature of markets, money, debt; to ask what an “economy” is actually for. This lasted perhaps two weeks. Then, in one of the most colossal failures of nerve in history, we all collectively clapped our hands over our ears and tried to put things back as close as possible to the way they’d been before.
Perhaps, it’s not surprising. It’s becoming increasingly obvious that the real priority of those running the world for the last few decades has not been creating a viable form of capitalism, but rather, convincing us all that the current form of capitalism is the only conceivable economic system, so its flaws are irrelevant. As a result, we’re all sitting around dumbfounded as the whole apparatus falls apart.
Occupy Wall Street rediscovers the radical imagination (via ryking)
Reblogging because I’m fascinated by this. Can we develop an economic system around ideas of justice? Or is that doomed to failure?
(via undercovernun)
(via undercovernun)
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In America, for instance, pretty much everybody is in debt. The great social evil in antiquity, the thing that Sharia law and medieval canon law were trying to ensure never happened again, was the scenario in which a family gets so deep in debt that they are forced to sell themselves, or sell their children, into slavery. What do you have here today? You have a population all of whom are in debt, and who are essentially renting themselves to employers to do jobs that they almost certainly wouldn’t want to do otherwise, to be able to pay those debts. If Aristotle were magically transported to the U.S. he would conclude that most of the American population is enslaved, because for him the distinction between selling yourself and renting yourself is at best a legalism. This, again, is why I say that our definitions of freedom are bizarre – we’ve managed to take a situation which most people in the ancient world would have recognised as a form of slavery and turned it into the definition of freedom (your ability to contract debts, your ability to sell your labour on the market, and so on). In the process we have created the very thing that all that old legislation and all of those old political practices were designed to avoid.
David Graeber (via azspot)
I don’t know much about the history of economics, but this article is fascinating.
(via notemily)
(via notemily)
