I live in the Canadian province of Ontario. A while back our disastrous Liberal party premier retired, and was replaced by the party, who chose a lesbian named Wynne.
Wynne wants to cut corporate taxes and lower taxes on the rich.
As with Obama, the fact that someone is part of an oppressed group does not mean that they, personally, are progressive or populist on economic issues. They’ll give you some social identity rights, even as they take away the foundation of prosperity for you. People can go on about Obama’s move to raise the minimum wage (which I support), but it is a fact that Obama has increased the wealth of the rich even faster than Bush II did, and that median household income in America has actually dropped under him. And this many years after his election, no, it’s not all Bush’s fault. Obama deliberately chose policies and personnel like Bernanke, Summer and Geithner who would, predictably (because I and others did predict it) increase inequality.
And that is what he wanted.
Neoliberals love offering left-wing voters identity issues, or the appearance of them. They may love the gay (or at least not mind it), but that doesn’t mean they don’t still intend to create a society in which there are aristocrats, and if the serfs want to marry same sex, let’em. Meanwhile, they’ll keep you under 24/7 surveillance in case you start acting actually subversive in ways that could actually hurt their power and wealth.
Oh, and African-Americans have done terribly under Obama.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
President Obama’s plan to raise the minimum wage to $10.10 per hour would wipe out about 500,000 jobs by late 2016, according to the nonpartisan Congressional Budget Office…
…The CBO cautioned that its estimates of job losses were subject to wide fluctuation and could come in lower than 500,000 and as high as 1 million.
“In CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of one million workers,” it said in a report Tuesday.
Let me summarize: we think it will cost jobs, but we have no idea how many.
The fact is that empirical studies on raising the minimum wage have found no consistent pattern of job losses. Sometimes you even get job gains. This is pure economic modeling: “well, if prices increase, buying must decrease, and labor is a market”. That’s economic theory in a nutshell, the problem is it doesn’t work that way in the real world all the time.
In real terms, the minimum wage was much higher 40 years ago. Did they have worse employment, or better employment than us?
Raising the minimum wage means that a lot of people have more money to spend, and spend it they do, because people earning that little spend every cent they have. So it increases demand. It decreases borrowing from payday loan places, which charge usurious interest, and that also increases spending, because payday loans very quickly cripple the buying power of those who take them.
Economic modeling is, well, hard, and it’s not a science, because economics is not a science. When the CBO says there’s a two-thirds chance a # is between negligible and a million people, they might as well be confessing to this.
Go ahead and raise the minimum wage. It might increase employment, it might decrease employment, but it will help most minimum wage workers. And because there are so many other things going on in the economy, any post-facto study on the affect will also be questionable.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
Wealth and income are important, but power trumps. What matters is control, and control is even more concentrated than wealth. This study found that control was about ten times more concentrated, in fact. (PDF)
Most of the companies on the list are financial companies.
Why? Because financial companies can create money. It’s hard to make more money than people who can make money. The only folks who come close control bottleneck resources like oil, or have what amounts to oligopoly control over something people need (pharma, for example.) Money is permission: you can’t do squat in a market economy without it. Those who can create it, or who have excessive profits, control what other people can do.
It is for this reason that Jefferson said that banks were more dangerous to democracy than even standing armies.
Money making and differential profits lead to differential power. Over time, if your rate of return is higher than everyone else’s you will gain so much more money than them that you can buy them out, or out-bid them. The first thing you will do, if you have any sense, is take control of government, because government, which controls the rules of the game (legislation) and violence, is the only other power which can destroy you. Once they are under control (and the bailouts proved Western governments are under the control of financial institutions), the only remaining threats are your own ability to drive yourself off a cliff, and the very small chance of revolution, which is likely to happen only after you’ve destroyed yourself in any case.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
The Sochi Olympics have put the spotlight on Russia, and there has been great excorciation of Russia for its discrimination against gays, and much mockery for the problems with the Games, such as one of the five Olympic rings not opening, Wifi that doesn’t work, bathrooms with two toilets in the same room and so on.
What is interesting about this is that there are so many minor problems. Do you remember these issues during the Beijing Olympics?
No.
And, if you’re older, like me, do you remember them from the Moscow 1980 Olympics?
No.
In 1980 USSR, the Russians could still put their fingers down and make things work. Oh, to be sure, wherever the Politburo and the best of the KGB wasn’t watching, it was a mess, but if they concentrated their efforts on one place, things got done.
Whatever problems the USSR had by 1980, let alone by the time it fell, for many Russians, it was better than what came after. Putin believes this:
When Igor Sechin was working as President Vladimir Putin’s deputy chief of staff a decade ago, visitors to his Kremlin office noticed an unusual collection on the bookshelves: row after row of bound volumes containing minutes of Communist Party congresses.
The record stretched across the history of the party and its socialist predecessor — from the first meeting in March 1898 to the last one in July 1990, a year and a half before the Soviet Union collapsed, Bloomberg Markets will report in its March issue.
Sechin regularly perused the documents and took notes, says Dmitry Skarga, who at the time was chief executive officer of Russia’s largest shipping company, OAO Sovcomflot.
“He was drinking from this fountain of sacred knowledge so that Russia could restore its superpower status and take its rightful place in the world,” Skarga says.
Sechin’s back-to-the-future fascination with his country’s communist past is something he shares with Putin, who, soon after coming to power in 1999, restored the music (though not the lyrics) of the Soviet-era national anthem and later described the collapse of the USSR as the greatest geopolitical catastrophe of the 20th century.
Why does Putin believe this? It seems like nonsense to most Westerners. But if you’re Russian, and you remember the 90s, you remember a time when rapacious oligarchs seized control of the country, the population went into sharp decline, where there wasn’t enough food and where hot water was a luxury denied to many.
You remember constant humiliations at the hands of the West, as they carved up Russia, the USSR and the Warsaw Pact, and you remember that NATO kept expanding East even though Bush Sr. had promised Russia that wouldn’t happen.
The 90s were terrible. As bad as the late USSR was, the 90s were worse.
The sardonic joke was “everything the Communists told us about Communism was a lie. Unfortunately, everything they told us about Capitalism was true.”
To put it simply, privatization, known as shock doctrine, was a huge failure in Russia. It led to control over the economy being in the hands of a few rapacious oligarchs, none of whom didn’t routinely use coercion and violence to get their way, it led to a collapse in population, life span, of oil production… of everything.
If this was capitalism… why would the Russians be impressed?
And meanwhile, in Chechnya, the Russian military couldn’t even put down an insurrection. The Red Army may have failed in Afghanistan, but in the provinces of the USSR, well, no.
So Putin gets in charge, and he looks at what privatization; what shock doctrine has done to the country, and he think that the USSR is better. So he makes examples of some of the oligarchs, re-nationalizes the key parts of the economy, including oil and high tech production, as well as those parts which can’t compete.
Peskov says, “for example, in shipbuilding it’s absolutely pointless to carry out privatization,” he says. “You can privatize enterprises, but they won’t be competitive; they will be doomed to failure. So consolidating the assets under the state’s wing is the only way to preserve key sectors of the economy.”
Next he turns on Chechnya and he wins his war, he crushes the Chechens, then he pours billions into rebuilding their capital. Bear in mind, this is sold as an “anti-terrorist” war, just like Iraq and Afghanistan were sold to Americans. Remember how popular Bush was as a “war president”?
Putin starts bringing countries which were once part of the USSR under the Russian umbrella again, and tries to slow the advance of NATO and the EU East towards Russia’s border.
So what Putin has done is look at the results of the collapse of the USSR: the economy trashed, population declining, oligarchs stealing, Russia humiliated, a major insurrection in the South, and he’s reversed them. The economy may not be brilliant, but it grows fast for most of the 2000s. Oil production grows and exceeds USSR production, and pays for more than 50% of the government’s budget. Population stops declining. Unemployment drops, and is lower than in some European nations.
Perhaps state capitalism, which is what Putin is doing is “inefficient”, but it’s supplying jobs and it’s paying the government’s bills.
And Putin is genuinely popular. In the last few years there have been demonstrations, but while Putin’s reelection wasn’t fair, it doesn’t appear to have been stolen.
Why? If you remember the 90s, and most people do, Putin has demonstrably made most Russians better off and strengthened Russia. And very few Russians are crying tears for what he’s done to the oligarchs, all of whom are little better than Mafia dons themselves.
If you’re Vladimir Putin, you think you’ve done a great job. You think that the West are a bunch of flaming hypocrites who hate Russia, as well. Look at all the screaming about human rights during these Olympic Games. While there was some about China in 08, it was magnitudes less. And if China doesn’t discriminate against gays, well, they certainly are at least in the same league as Russia when it comes to human rights abuses.
Besides, who can take the US, which invaded Iraq based on lies, which tortured, which has the world’s largest assassination program and whose NSA runs a surveillance state which in certain respects would make the Stasi blush, while imprisoning much of its black male population, and bailing out private actors to the tune of trillions of dollars to lecture anyone else?
To Putin, Western lectures look like sheerest hypocrisy. The West, in its banking scandals, proved itself as corrupt as Russia, and on a much larger scale. In Iraq it proved that it would brutalize non-Western populations for no reason. In Greece it has driven its own population into penury, and all through the West the surveillance state rises, and people continue to lose their rights.
Meanwhile Russia’s unemployment rate is better than most Western nations.
None of this is to deny that Putin is not an evil man, and though I don’t know if he’d put it that way himself, I doubt he has any misconceptions about the fact that he’s a strong man; a man on horseback and a man who has committed innumerable war crimes, while ruling through fear and intimidation as well as popularity.
Russia’s got problem, big ones, and Sochi has highlighted them. Putin has failed to transition the economy from resources, and he has not kept corruption under limits: corruption is one thing, that the system can’t be made to work in high profile circumstances like Sochi, is another.
But when your economy is more than 50% reliant on oil, it’s almost impossible to stop corruption or to transition off of resources. Resource economies are corrupt, period, because whoever has control of the resources makes so much more money than everyone else, and people will do anything to get near the money spigot, while those who do control it can buy anyone they want.
In this resource economies are similar to financialized ones. In both cases, there is a money spigot, and you are either attached to it, or you aren’t. If you are, life is great. If you aren’t, well, not so much.
So, if there is a money-spigot, do you want it controlled by oligarchs, or by government? Which devil is worse? The Russian answer, Putin’s answer, is government. Right now the West’s answer is oligarchs.
Neither is right, of course, but that’s another essay.
For now, look at Russia, and the world, and try to see them through Putin’s eyes.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
should be disqualified on its face for trust reasons. The largest and second largest cable TV providers joining together in an already consolidated field?
This is why you can’t have good things, folks. The influence over culture that mergers of media companies represent is vastly powerful, and has been misused in the past, as when the media amplified President Bush’s innuendo that Iraq had been behind 9/11, leading to over 70% of Americans believing that the invasion was revenge for 9/11, when Iraq had nothing to do with it. (And Saudi Arabia, which did, was never on the target list.)
We raised $5,445 in one time donations, and $250 in recurring donations. Multiplying the recurring donations by 3 takes us over $6,000.
Starting this coming Monday, for 3 months, I will do my part, and, on average, write two significant blog posts a week, plus have an average of an article a weekday for you to read.
The donation page is still up, and if you wish to donate or subscribe you still can.
My most sincere thanks to all my donors. When I started I really had no idea if we’d raise more than few hundred dollars. I am humbled that so many people find my writing worth supporting.
Our fundraising has gone very well, with $250 in recurring donations, and $5,180 in one time donations. Multiplying the recurring donations by 3, we’re just $70 from the second tier, which is an average of an article a weekday, and an average of two significant articles a week.
Thank you very much, when I started this I had no idea how much I’d raise. I appreciate this immensely.
If you haven’t given, and like my writing, please consider DONATING or SUBSCRIBING.
Anyone who gives $500, can also talk to me about my writing an article on a subject of interest to them.
(The original article on the campaign is here.)
The fundraising drive will end tomorrow, I’m extending it just one day because we’re so close to the second tier.
The donation page will remain up after that.
The best book on both successes and failures of the Soviet Union is Mancur Olson’s “Power and Prosperity.” If you haven’t read it, you should. The second best is Randall Collins essay in Macrosociology.
The great problem with most critiques of the USSR is that they do not explain its successes. In the 20s and 30s it did far better in most respects than the West. In the 40s and 50s and even into the early 60s it was still doing very well, and put the first satellite in orbit, produced tanks that were as good as the West’s and produced the most successful assault rifle in history. As late as the early eighties, there were points where Russia’s best tanks were better than the West’s.
The USSR is one of the few nations larger than a city state which has industrialized other than through the use of mercantilist policies. During the Great Depression the USSR vastly outperformed the West.
So, why did it fail? There are two perspectives I believe have a lot of truth to them. Let’s start with Olson’s: the failure of the USSR was a feedback problem. At the beginning of the USSR local cliques and power groups had not formed. The central planners knew exactly how much was being produced, and exactly how much could be produced and were able to coerce people into producing what they knew was possible to make.
As time went on, this became increasingly impossible. Put simply, the locals controlled the information flow to the center, and lied about what they could produce and what they did produce. Workers worked less than they could have, local bosses appropriated production to themselves, and the secret police couldn’t keep up, or became corrupted themselves. Absent accurate information, the central planners lost control. Everyone slacked off, corruption soared, production dropped, and the products produced were crap, especially the consumer goods. (The USSR remained able to produce some of the best military equipment right to the end.) Food production tumbled.
The second perspective is the geopolitical one. The USSR had less population than the West or even America. It was faced with enemies on every side, while America was isolated by sea from any possible assault and Europe only had to worry about attack from one direction. It had a smaller economy than its enemies. To keep up with its enemies militarily, it had to spend a larger percentage of its economic production than the West did. With a central position and a smaller economy, why would you think it wouldn’t crumble under the strain? I will note that Collins made this argument BEFORE it crumbled. On every normal Great Power axis, the USSR was weaker than its enemies. Fiscal strain is normal in such a situation, and it is to be expected that the economically weaker power will eventually lose. From a pure power perspective, and ignoring nuclear weapons, the USSR should have launched an all out attack on Europe no later than the 70s.
This is basic guns and butter economics, understood by Adam Smith. The more you spend on your military and your security apparatus, the more your civilian economy suffers, especially as the most brilliant scientists and engineers are hived off from civilian production. The longer this goes on, the more you suffer. If you’re facing economies that are much larger than yours, you’re screwed. And the US economy was the largest in the world starting in the late 19th century, let alone a recovered European one.
As the USSR failed under these twin problems, exacerbated by the bleeding ulcer of the Afghan war, they also suffered ideological decay: they stopped believing in their form of government, and became less and less willing to kill for it. When push came to shove, rather than use the Red Army to maintain control (which it was still capable of doing), they didn’t believe in the USSR and the Warsaw Pact enough to do so.
Now let us turn to capitalism. The advantage of capitalism v. central planning, is that information is sent through prices, supply and demand. This information feedback, however, is still gameable by power blocs. The exact strategies are different than in a command economy, but the end result is the same. The West and America are currently undergoing this exact problem. The entire financial crisis was about inaccurate feedback, and broken feedback loops: it was about the financial and housing industries deliberately damaging the feedback system. Then, when it finally went off a cliff, they destroyed the capitalistic feedback system, which when properly operating, makes companies go bankrupt, by obtaining bailouts due to owning western governments.
There are myriad other problems with feedback in the developed world right now, from massive subsidies of corn and oil, to oligopolistic practices rife through telecom and insurance, to the runaway printing of money by banks, to the concealment of losses by mark to fantasy on bank books, to the complete inability and unwillingness to price in the effects of pollution and climate change.
The great problem with humans is that we lack time perspective. In a hundred years, when historians and whoever deals with economic issues look back (hopefully not economists as we understand them), they aren’t going to be that impressed that Western Capitalism outlasted Soviet Communism by forty or fifty years. Instead they are going to look back and say that both were doomed, in large part, by inability to manage the exact same problem. In both cases the feedback systems which controlled economic production were so perverted by various internal power blocs that the societies were unable to reproduce the material circumstances necessary for their continuance.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
Fundraising Update – $1,000 from an article every weekday
Fundraising has gone well, with $160 in monthly subscriptions, and $4,490. Tripling the subscriptions, the total is $4,970, meaning we’re $1,030 from the second tier – two significant articles a week, and an average of an article every weekday.
Everyone who has given: thank you. If you haven’t given, and like my writing, please consider DONATING or SUBSCRIBING.
Anyone who gives $500, can also talk to me about my writing an article on a subject of interest to them.
(The original article on the campaign is here.)
The campaign will end this coming Monday.
The most important fact about modern economies is rarely remarked on: they are job societies. The vast majority of the population works for someone else. For those without jobs, poverty, homelessness, and in some cases death, is a real prospect. Members of modern societies cannot support themselves if someone doesn’t hire them.
This is, in human history, unusual. For most of American history, most people lived on farms, in the country, and grew much of the food they ate, made their own clothes, raised their own homes. They often lived lives we would consider horribly deprived, but they were able to provide for many of their own needs. The craftsman and professional, while they worked for others, had clients, not bosses, and while they had employees many of those employees were training so they might go out on their own.
We take for granted that industrialization, and moving off the farm has improved human welfare, but that is not true in all places, nor in all times. Industrialization in the Britain is synonymous with land enclosure: pushing feudal tenants off land they had previously had the right to use. Supposedly land enclosure vastly improved agricultural output, but it has been shown that communal fields were almost as productive as enclosed ones. Enclosure was done not to grow more food, but to make more profit, and the people who were displaced flooded into England’s cities, where they were compelled by the real prospect of starvation and death, to work in the new factories, six and a half days a week, 12 hours or more (check the #s).
These factory workers lived worse than they had as tenant farmers and serfs. They worked more hours, had less food, died younger, and during their lives suffered more from disease because of the horrible sanitation of European cities at the time. Their lives were virtually unending misery. This is the reason for the idea of Jeffersonain farmer’s democracy: because Americans were aware of the misery of industrialization.
In Mexico, after NAFTA, small farmers lost their farms because they could not compete with subsidized American agriculture. They flooded into Mexican cities, or they headed north to America to work as illegal immigrants. Again, though in some cases they earned more money, the vast majority of them were worse off than when they lived on the farms, and Mexicans as a whole suffered because after American interests bought Mexico’s food industry, the price of food soared, and the quality of that food dropped.
After World War II Americans flooded from the farms into the new cities. For this generation, the GI generation, it was a straight upgrade: their lives were better. They worked less hours, they had more food, they had access to power and indoor plumbing, and good jobs with good pay.
Those Americans were treated very well, and if you weren’t black, the 1950s and 1960s are looked back on as the heyday of American prosperity. Good jobs were plentiful and easy to find and they came with healthcare and good pensions. Life was good.
Today, millenials and Gen-Xers don’t have such a good deal. Unemployment is high, if you lose your job you will have a hard time finding as good one, or a job at all, and good pensions and healthcare plans are more and more uncommon, and increasingly restricted to the executive class.
Why? Well, one reason is this, the family farms are gone. The first generation had to be treated well because they had options: they could go back to the family farm. So their jobs, and their lives as consumers had to be clearly superior to being on a farm.
I’ve spent a lot of time discussing how to make job economies work in the past, because we live in them, and even if we decide to transition away from jobs as our primary method of distribution, it will take time. But never forget: as long as you need a job to survive, you are at the mercy of those who provide jobs, and for most, the only way you are treated well is if you are not easily replaceable. That lack of replaceability is in most cases a social attribute, not a personal one. You are not replaceable if the job market for your set of skills is very tight. As programmers found out, even if you think ahead and master a skill set that is in short supply, that can and will change, because it is not in the interest of employers for you to be hard to replace.
There are a few people who are their own brands. There is only one Madonna, and you cannot easily replace her. There are a few people who are supremely fitted to the current world, for whom making money is easy. But most of us aren’t in one of those positions, and we need to stop thinking that we are. We aren’t special, we aren’t a unique snowflake, and we are replaceable. We will be prosperous together, or not at all.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
