Since I teach high school history, I thought I’d share a couple graphs I found for one of my classes. During the 1920′s, GNP per capita was increasing…
But gains were concentrated the top…
Calvin Coolidge and Herbert Hoover were the proponents of supply-side economics and “rugged individualism” from 1921-1932. Republicans spout the same ideas today. Look at 2007 in the graph above. Do we have any reason to think the superrich aren’t at it again?
It was just released this evening that the US is claiming Iran attempted, but failed to shoot down a US drone, eliciting warnings to Iran. One very quick but important observation: If Iran had a drone about 18.5 miles off the coast of the US, would we just let it be, since after all it would be in international waters?
I have to go on a bit of a rant against what should be a good leftist project that has run amok. Many years ago I saw the excellent documentary “The Corporation,” which examines the corporation as an institution and it’s anti-social nature. Yet when I went to the film’s website today, it is filled with marketing garbage that you would expect from a typical corporation. Enticements to buy “The Corporation” sweatshirts and other products are prominently displayed. The site is operated by hellocoolworld.com, which describes itself as “an interactive agency that works exclusively on social cause projects and campaigns. We create, support and promote transmedia content and use grassroots and mainstream methods to get the good word out!”
This sound like basically a leftist marketing agency to promote good causes. Some of the causes sound reasonable, but I question the basic idea of a profit-based business promoting an institutional critique of the modern corporation. A corporation obviously is different than a business like hellocoolworld.com, but the profit-based motive they share is part of the film’s critique, at least as I interpet it. Marketing what you think is a worthy cause as hip and cool simply masks this.
I think what upsets me more as a high school teacher is that their lesson plans associated with showing the movie are only available if you buy the DVD Educational Resource for $195. The only way this will be bought is if a whole social studies department decides they want to invest their scarce resources in buying it. What about the teacher who wants to show the movie with the educational resources but can’t because his department doesn’t want to buy it?
I don’t necessarily mind needing to pay for educational materials, or even $195 for good ones, but it upsets me that a movie that could be such an excellent resource for those who want to challenge the power of corporations is behaving just like a business. It shows that the message is not the main priority. On the “Can I show the film at school” section of their website it says “You can show your personal DVD to as many people as you like, and the filmmakers encourage you to do so. However, in an institutional setting such as a high school or university, a different set of rules applies. Showing the film in these settings requires additional rights.”
The movie was made a long time ago and I assume it’s makers have been compensated. Yet years later the people who own the rights are more concerned about continuing to make money off of its showing than educating the public. I would very much like to hear how the rights owners justify this. I posted a comment on the site’s blog and hope to hear back.
For reasons discussed in my previous post, I think we can be thankful that Obama won the election, or to be more accurate, happy that Romney lost. The biggest difference is that Obama’s healthcare reform can stay intact. (A good Huffington Post piece on this was posted today.) Obviously, it would be nice to not have insurance companies at all and some kind of a single-payer system instead. But nonetheless, it is important that almost everyone will have health insurance, especially if you keep in mind the Medicaid expansion. There is good reason to be concerned about keeping premiums down over the long-term, but the fact that the insurance industry will be regulated much more heavily and will not be able to charge more for people based on their health status could end up improving the overall health of the American people. Leftists (including myself) should keep in mind that saving people’s lives is a good thing, even (or perhaps especially) in a capitalist system.
And now for reactions to Obama’s victory from his opponents…
With the presidential election just about upon us, I am in a state of real worry. If Obama wins, there are certainly profound dangers such as militarism abroad which sooner or later will revisit us in future 9/11′s, climate change, and continued concentration of power in a small, wealthy elite. But if Romney wins, the right is just going to punch the working and middle classes in the face. The repeal of the Affordable Care Act would not only set back chances for bringing down health care costs for Americans, but would be a blow to future attempts to create social welfare policies. In a 1954 letter to his brother, Republican President Dwight Eisenhower said the following:
Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things…Their number is negligible and they are stupid.”
He was saying they were stupid because trying to end such welfare state programs would be political suicide, but times have changed and Republicans can wage blatant class warfare with little difficulty. Hence Romney/Ryan’s desire to make Medicare a voucher system and cut huge swaths of social spending. Progressives and leftists still have serious work to do if Obama is reelected, but that work will be much harder and the obstacles greater if Romney does.
A think tank in the UK has pointed out (as the IMF did in less vocal tones about Europe as a whole) that focusing on reducing government deficits is actually leading to greater debt. The UK has taken an approach of tax increases and spending cuts to keep debt from going too high. But the reduction in consumer spending from taxes and reduction in government spending has slowed economic growth, meaning that there is a smaller tax base from which to generate revenue. The typical Keynesian picture seems vindicated: the government should spend in hard times, and save in good times. Important to keep in mind here in the US when conservatives (and many Democrats too for that matter) talk about cutting government spending. Granted Republicans won’t raise taxes, but as I have repeated over and over on this blog, they aren’t serious about cutting deficits either. But for the sake of argument, let’s assume they did cut spending significantly. Especially if the economy is in its current state, then that would slow down growth, decreasing the tax base…you get the idea.
I’ve come to realize I have a certain assumption of how I think political systems work that underlies a lot of my opinions so I thought I’d lay it out. It’s really very simple, but I think it explains a lot. It can be summed up in one sentence:
Power over social decision-making requires organization.
“Organization” is to be interpreted very broadly here. It could be a business, a political party, a union, or any other organization. There are many advantages to organization. An organization can collect information and distribute it to its members, rather than each individual having to do his own research, collect information from its members to advocate on their behalf (what political science calls issue articulation) and channel money and resources to influence the political process.
If we assume the above paragraph to be true, then applying it reveals some interesting insights. Who is organized in the US? Clearly, major corporations have the largest organizations and resources available to them. While tiny in comparison to the business sector, labor unions organize about 10% of the labor force. There is a vast array of non-profit organizations advocating many causes, which have some impact, but they have far fewer resources than the business community. So it should come as no surprise if government policy disproportionately serves the interests of the wealthy. It can also be seen if we look at the background of three of Obama’s cabinet posts:
Treasury Secretary Tim Geithner: son of VP of Public Relations of Ford Motor Company, began career at Kissinger Associates
Secretary of State Hilary Clinton: Yale Law School and on the board of directors of TCBY (1985-1992), Wal-Mart (1986-1992), and Lafarge (1990-1992)
Attorney General Eric Holder: In addition to Justice Department positions, he was an attorney with Covington and Burling, an international law firm that represents major corporations.
This is not to suggest any conspiracy, but to point out that a) corporations are organized and b) their interests and those of the government tend to align. What about someone like Bernie Sanders, the progressive Senator from Vermont? Isn’t he proof that politicians don’t have to be supported by big business? Sanders actually proves the point quite well, since the vast majority of his top campaign donors are labor unions. That is why he is able to be the most leftist Senator. UMASS Boston Professor Thomas Ferguson has actually done some great work on what he calls the “investment theory of party competition,” outlining how political parties align to those who are organized (mostly business), while the wishes of the electorate play a secondary role. He in fact shows that one reason the New Deal was successful was due to an alignment of labor union and capital-intensive industry. An excellent documentary about his ideas is below.
I feel like I never stop learning from Paul Krugman. His latest blog post discusses the fact that the “fiscal cliff” of automatic spending cuts and tax hikes should be welcome to conservatives if they are consistent. After all, they will significantly reduce the government deficit and all we hear from Romney/Ryan is how debt is such a big problem. Krugman makes another important observation: Republican agreement that the fiscal cliff will hurt the economy is actually agreement with the Keynesian view, i.e. reduced gov’t spending and increased taxes reduces aggregate demand. Why won’t Republicans go along with this deficit reduction? First, because it doesn’t reduce the deficit in a way that gives the lion’s share of the benefit to the super-rich. Second, and this is me not Krugman talking (although I imagine he’d agree), conservatives don’t actually care about the deficit, as deficits have increased under Republican presidents during the last 30 years. If you can cut taxes for the rich and cut spending on everyone else, who cares about the deficit?
I usually don’t repost others material, but I want to share a great piece by Daniel Ellsberg, of Pentagon Papers fame, about why it is important to defeat Romney. I post this as an elaboration on the back and forth on ZSpace and here that I had with Terri Lee, who supports a voter boycott. I don’t think the number of people who support a voter boycott is all that large and I certainly doubt large enough to influence the election. However, I think it is indicative of a “screw the system” mentality, where understandable anger prevents good judgment, replacing practical thinking with some idea of a moral high ground. This is a great danger for the left, because it prevents the left from relating to and gaining the sympathy of the average American. While voter boycott supporters like Lee may be morally right in condemning US actions abroad, what do they expect to accomplish when they say trying to improve the lives of Americans who suffer economically is selfish? As she said on ZSpace: “Sacrificing the lives of real people elsewhere to gamble on the possibility of gaining some slight, temporary benefits for people here, seems rather selfish and inhumane to me. As long as the US has a capitalist system, benefits will be taken from workers and the poor while greater benefits are lavished on the wealthy and corrupt.” So we should wait to help Americans until capitalism is gone?
Paul Krugman often states his opinion that consumer demand, held back by large debt, is what is keeping the US economy from recovering fully and that government stimulus is in order. I am frankly not the best at economic statistics, but I did a little research that seems to support this. First, total household debt payments took a nosedive starting in 2009. This can mean two things: 1) people have less debt to pay off or 2) people do not have enough income to pay off their debts.
It is evident that there is less debt in the economy, but that is because the willingness to lend and ability to pay have created a credit crunch since the 2009 recession began. So gross household debt declined…
but real disposable income per capita is still struggling to maintain pre-2008 levels and is below what it would have been if growth had remained constant (to be honest, I don’t understand the short term 2008 spike):
There is a definite trend for periods of higher incomes to lead to higher debt payments (and the reverse as well.) So if household debt is holding back consumer demand, then government stimulus could help people dig their way out of debt. And just in case you think that excessive government is the problem, the growth rate of government expenditures is about what it was pre-2008 and is actually levelling off (Blue is government spending, Red is taxes collected).
