Louis Proyect: The Unrepentant Marxist

April 11, 2014

Reading Richard Seymour in the Age of Austerity

Filed under: economics,financial crisis — louisproyect @ 11:48 am
Strategies of Resistance

Reading Richard Seymour in the Age of Austerity

by LOUIS PROYECT

Dating back to the overthrow of Salvador Allende, financial austerity has been the watchword of the capitalist class. Frederick Hayek supplanted John Maynard Keynes in the ideological driver’s seat, as the free market became sacrosanct. Adding to the neoliberal momentum, the collapse of the Soviet Union caused Karl Marx to lose his official status for a third of mankind. Despite the hiccup of interest in Karl Marx following the 2007 financial meltdown and rueful reflections by Francis Fukuyama that it might not be the end of history after all, the mantra of balanced budgets and eliminating “waste” was taken up by politicians and pundits alike. To paraphrase W.H. Auden, we seem to be living through an Age of Austerity.

As perhaps the first study to take these issues head-on, Richard Seymour’s “Against Austerity” is a must-read primer for old hands in the class struggle and newcomers alike. Leaving aside the merits of his arguments—and they are plentiful—Seymour would be worth reading if for no other reason than his elegant and witty style. At the risk of inflating the young man’s ego, I regard him as the most compelling prose stylist on the left since Alexander Cockburn in his heyday and Christopher Hitchens before he turned into Mr. Hyde. Also, unlike most people who write for leftwing publishing houses, Seymour has a brash but self-effacing manner that is as refreshing as a cold beer on a sweltering summer night. From the book’s preface:

There is also a certain familiar use of esoteric political theory and rococo ornamentation that some readers will find off-putting. I hope so anyway. Those readers would be far better off reading something else. (Or, alternatively, stay and have your middlebrow sensibilities challenged.) This book comes with swearing and unapologetic intellectual swagger.

I imagine you’re scanning this page while still in the bookshop calculating whether you’d be willing to be seen reading this book on the train. If the above appeals to you, you’re probably a bit ‘wrong’ in some way, but I welcome you. If it doesn’t, then make your way the holy apotheosis of bookshops that is the ’3 for 2′ section. And buy yet more inconsequential shit with which to line your shelf of good intentions.

Read full article

October 19, 2013

Assault on Wall Street

Filed under: Film,financial crisis — louisproyect @ 1:23 pm

“Assault on Wall Street”, a B movie that was in and out of New York theaters about a year ago for only a moment and with scant attention from critics, just showed up on Netflix streaming. The director Uwe Boll is regarded as one of the worst in the world, with some considering him the “Ed Wood of the 21st century”. The film got one “fresh” on Rotten Tomatoes and six “rottens”. The one fresh came from my NYFCO colleague Prairie Miller who described it:

Possibly the only director on the planet who has garnered a strange recognition through utter infamy, Boll engages in a weirdly raw and rowdy subversive ideological descent into the dysfunctionally dark recesses of US culture.

Prairie’s full review

I went to a press screening but did not write anything about it since I considered it to be more in the grindhouse genre than a serious film dealing with the collapse of the financial system like J.C. Chandor’s great “Margin Call”.

Although I still am loath to overpraise this film, it is definitely worth watching if you are a Netflix subscriber. It starts out in exactly with the way that “Margin Call” ends with a Goldman-Sachs type firm dumping bundled securities worth almost nothing on unsuspecting clients, including a security guard named Jim Baxford who is a modern-day Job. His wife is undergoing expensive cancer treatments whose monthly costs are only partially covered by insurance. When his investments go south, he can no longer pay his bills and his wages become garnished. Once that happens, he loses his job as an armored truck guard since the company cannot keep someone with major financial burdens on the payroll since they theoretically might be tempted to become part of an inside job.

The only thing that Baxford becomes tempted into becoming is a combination of Travis Bickle and an Occupy Wall Street protester. The finale of the movie is a beautiful and deeply satisfying mass murder of a bunch of stockbrokers and other scumbags who victimized our hero. Is that a spoiler alert? Sorry about that.

German director Uwe Boll’s last film was obviously preparatory to this. Titled “Postal”, it is a “comedy” that Wikipedia describes as follows:

The film takes place in the town of Paradise, Arizona (a ghost town in real life), where the volatile Postal Dude, after being mocked at a job interview, kicked out of his local unemployment office and discovering that his morbidly obese wife is cheating on him, is more than a little angry and is desperate to get enough cash to finally leave his dead-end town. He decides to team up with his Uncle Dave, a slovenly con artist turned doomsday cult leader who owes the US government over a million dollars in back-taxes. With the help of Uncle Dave’s right hand man Richie and an army of big-breasted, scantily clad cult members, the Dude devises a plan to hijack a shipment of 2,000 Krotchy Dolls, a rare, sought-after plush toy resembling a giant scrotum. Uncle Dave plans to sell them online, where their prices have reached as high as $4,000 a doll.

Unbeknownst to them, Osama bin Laden and his group of Al-Qaeda terrorists, who had been secretly hiding in Paradise since September 11, under the watchful eye of bin Laden’s best friend George W. Bush, are after the same shipment, but for entirely different reasons. Hoping to outdo the catastrophe of 9/11, they plan to instill the dolls with Avian influenza and distribute them to unsuspecting American children. The two groups meet at the shipment’s destination, Nazi-themed amusement park Little Germany. A fight between Postal creator Vince Desi and Postal director and park owner Uwe Boll (which ends with Boll being shot in the genitals, confessing “I hate video games”), sparks a massive shootout between the cult, the terrorists and the police, resulting in the deaths of dozens of innocent children. The Dude and the cult are able to get away with both the shipment and the park’s opening day guest, Verne Troyer, pursued by Al-Qaeda, the police and a mob of angry citizens.

I can’t vouch for this but “Assault on Wall Street” does have its moments.

Boll is something of a character. In June 2006 he challenged some of his harshest critics to a boxing match, something I should have done with Vivek Chibber now that I think about it. He beat the living crap out of one of them:

October 10, 2013

When the puppet talks back to the puppeteer

Filed under: conservatism,economics,financial crisis — louisproyect @ 8:26 pm

The puppet becomes the master in a classic Twilight Zone episode

Today’s NY Times raises some interesting questions about the connections or lack thereof between the big bourgeoisie (pardon me for a little Marxist jargon) and the Tea Party faction of the House of Representatives that has thrown the government into a crisis. Despite the reputation of the Tea Party for being free market fundamentalists, the masters of the marketplace find them rather inconvenient:

As the government shutdown grinds toward a potential debt default, some of the country’s most influential business executives have come to a conclusion all but unthinkable a few years ago: Their voices are carrying little weight with the House majority that their millions of dollars in campaign contributions helped build and sustain.

Their frustration has grown so intense in recent days that several trade association officials warned in interviews on Wednesday that they were considering helping wage primary campaigns against Republican lawmakers who had worked to engineer the political standoff in Washington.

Such an effort would thrust Washington’s traditionally cautious and pragmatic business lobby into open warfare with the Tea Party faction, which has grown in influence since the 2010 election and won a series of skirmishes with the Republican establishment in the last two years.

“We are looking at ways to counter the rise of an ideological brand of conservatism that, for lack of a better word, is more anti-establishment than it has been in the past,” said David French, the top lobbyist at the National Retail Federation. “We have come to the conclusion that sitting on the sidelines is not good enough.”

I probably listen to a lot more AM rightwing talk radio shows than the average socialist. Recently I discovered that there’s now a Fox radio station in NY at 970 on the dial that competes with WABC, the home of Sean Hannity and Rush Limbaugh. At 10pm there’s a Christian fundamentalist named Steve Deace who broadcasts for Fox radio out of Des Moines, Iowa. His motto is “Fear God. Tell the Truth. Make Money.” I can barely listen to him (or any of these characters) for more than 10 minutes but it helps me take the pulse of the ultraright.

Deace is fond of using the word “ruling class”, a term that he obviously knows was coined by the revolutionary movement. He uses it primarily to refer to the Republican Party establishment such as in this Politico article:

Not since Reagan has a nonestablishment presidential candidate had the comprehensive worldview and charisma capable of coalescing enough of the conservative/libertarian base to defeat the Republican ruling class in a national primary.

For Deace, the views of Hannity and Limbaugh are within “ruling class” parameters. On Town Hall, he blasted Bill O’Reilly as well:

From reporting inaccuracies on gun control, to no longer defending marriage, O’Reilly is now scoring goals for the other team. Similar sellouts and flip-flops aren’t news when they come from politicians. But given how O’Reilly has branded himself as the man with the moral high ground inside the “no spin zone,” it definitely has the potential to damage him much more. Nobody, right or left, likes a hypocrite. O’Reilly is now “evolving” so fast it would even give presidential candidates from Massachusetts ideological whiplash.

Clearly, the Tea Party right is on some kind of collision path with the establishment Right even though they share a common agenda against the left, working people, gays, and anybody who does not believe that Adam and Eve commingled with the Brontosaurus.

Before presenting my own views on what is going on here, I’d like to refer you to some noteworthy attempts by the left to explain the roots and dynamics of the Tea Party.

Doug Henwood was interviewed by Salon.com’s Josh Eidelson who asked: “You’ll hear some conservatives argue that the Tea Party represents a different politics, less “pro-business” than the GOP we knew – instead, consistently committed to “limited government” in ways that can be counter to business interests. To what extent is that just spin, or a real divide?” Doug replied:

It’s a kind of regional and inter-class battle. I think, to use the Marxist language, [the Tea Partyers] represent an enraged provincial petit bourgeois that feel that they are seeing society change in ways that they don’t like. They look at things like Obamacare and see that as a way of subsidizing a minority electoral bloc that will push the government in ways that they don’t like. These are the small-town worthies, like the local car dealers — people who are millionaires, but not billionaires. They are big wheels in their local communities, but not on a national level. And then you have ideological right-wingers like the Koch brothers who use these folks very effectively.

I would also refer you to Tim Horras, a founder of the Philly Socialists, who wrote a piece titled “Slouching Towards Shutdown: Left Reflections on the Tea Party, Then & Now” for the North Star website. Like Doug, Tim views the Tea Party as autonomous from what Deace calls “the ruling class”:

[T]he Tea Party was not an astroturf operation, but rather a legitimate social movement with a large mass base of support, 2) the mainstream Republican Party agenda was actually very different from the Tea Party agenda, 3) the capitalist class wouldn’t necessarily be in control of the Tea Party, like the sorcerer conjuring up forces they are incapable of controlling, 4) economic recovery was not going to happen, therefore extremism would continue to rise, and, (not mentioned in the passage quoted above), 5) key political conflicts would be centered around debt and default.

While some analysts like Michael Lind regard the Tea Party movement as an expression of Southern White racism, there are signs that it has powerful roots in the North as well. For example, Wisconsin governor Scott Walker went on the offensive against organized labor with backing from the Koch brothers and Ohio is the site of some of the most stringent anti-abortion laws in the country. Thirty years ago both Wisconsin and Ohio were considered strongholds of liberal Democratic power. What has happened?

I strongly agree with Doug’s assessment of it being the expression of an enraged petty-bourgeoisie but would differ on whether it is “provincial” (Doug cites Michael Lind favorably in the interview.) The big question, however, is what would make them so enraged? Does a millionaire car dealer in Mississippi really feel that Obamacare is an existential threat? I am not raising this question in a polemical fashion but only to demonstrate that I am not really sure.

The one thing I am relatively sure about is that the Tea Party flourishes in an environment where the Democratic Party lacks any kind of populist zeal. Obama is the perfect symbol of the kind of Eastern elitism that becomes a red flag in the face of the typical Tea Party activist. His connections to Wall Street, his Ivy League law degree, and primarily his condescending attitude to dwellers in “small towns in Pennsylvania and… small towns in the Midwest” who bitterly cling to guns or religion because of job loss, make him an easy target. Basically, Obama has generated the kind of blind hatred found in George Wallace’s 1968 campaign. Wallace ran as the candidate of the American Independent Party, a forerunner of the Tea Party in many ways. Wallace went around saying, “There’s not a dime’s worth of difference between the Democrat and Republican parties,” a virtual echo of Steve Deace’s complaint.

Middle class fury erupts on a fairly regular basis like Old Faithful in Yellowstone National Park but most of all in periods of economic crisis. Perhaps the first examination of this phenomenon was Karl Marx’s “18th Brumaire” that tried to explain how Louis Bonaparte, Napoleon’s nephew, could rule on behalf of the big bourgeoisie while assaulting it both verbally and through actions inimical to its interests. Marx wrote:

As the executive authority which has made itself independent, Bonaparte feels it to be his task to safeguard “bourgeois order.” But the strength of this bourgeois order lies in the middle class. He poses, therefore, as the representative of the middle class and issues decrees in this sense. Nevertheless, he is somebody solely because he has broken the power of that middle class, and keeps on breaking it daily.

You will, of course, note how Marx is focused on the contradictions of Bonaparte’s rule. A government committed to the “bourgeois order” carries out policies that violate the wishes of the very class on whose behalf it rules, drawing upon the power of a middle-class that has become alienated by the very order that makes it insecure. This is the same pattern that existed in fascist Italy, Germany and Spain but to a degree never seen before.

Throughout its existence as a class, the bourgeoisie has often relied on the middle class to impose its will even if there are appearances that a “new order” has prevailed. Marx’s article was the origin of the term Bonapartism, a useful way of looking at political figures who appear to rule above and beyond the major social classes while cultivating the impression that it rests on the will of the “people”. Juan Peron was an example of left-Bonapartism while DeGaulle was an example of right-Bonapartism.

While France never became fascist in the 1930s, the threat certainly existed. Trotsky was determined to warn the left about such a possibility in “Whither France”, a work that I hold in the highest regard. I might not be a Trotskyist in terms of the party-building methodology but his analysis of the class struggle will remain valuable as long as there are classes. Trotsky described the ruling Radical Party in 1934 as temporizing in the face of capitalist crisis. Despite the party’s name, it had more in common with the Democratic Party in the USA. Its refusal to act decisively led the middle-class to lean toward the fascists who at least gave the impression that they meant business. Trotsky wrote:

The petty bourgeoisie, the ruined masses of city and country, begins to lose patience. It assumes an attitude more and more hostile towards its own upper stratum. It becomes convinced of the bankruptcy and the perfidy of its political leadership. The poor peasant, the artisan, the petty merchant become convinced that an abyss separates them from all these mayors, all these lawyers and political businessmen of the type of Herriot, Daladier, Chautemps and Co., [Radical Party leaders] who by their mode of life and their conceptions are big bourgeois. It is precisely this disillusionment of the petty bourgeoisie, its impatience, its despair, that Fascism exploits. Its agitators stigmatize and execrate the parliamentary democracy which supports careerists and grafters but gives nothing to the toilers. These demagogues shake their fists at the bankers, the big merchants and the capitalists.

I should make it clear, however, that the Tea Party is not a fascist threat. Fortunately (or unfortunately in another sense) there is no threat because there is no working class radicalism to speak of. Unlike the 1930s, the “Great Recession” has produced no mass leftwing movement in the USA. There are a number of reasons for this but suffice it to say that the existence of various safety nets make survival easier, even though those protections might be hollowed out or abolished in a period of even deeper crisis.

Tim Horras got it right. In his article he urged the need for militant mass action:

If the Left can successfully organize a genuine pole of attraction in the coming years, I remain convinced that poor and working class Americans will have the wherewithal to beat back the “rough beast” of reaction, press on towards social democracy, and finally arrive at a more fair and just society: the cooperative commonwealth.

We should never forget that during the Occupy Wall Street movement, there was hardly a peep about the Tea Party. When the left is on the offensive, the right tends to back down. For that matter, there is not much in the way of rallies by the Tea Party today. As a movement, it is manifested more by press conferences by politicians like Ted Cruz than those menacing gatherings that saw men toting semiautomatic weapons.

The conditions that created Occupy will be with us for the foreseeable future. There’s a tendency for some to view the current phase as one of post-crisis since reports about an uptick in employment and home sales occur daily in the newspapers, radio and television. At least one bourgeois economist warns about expecting prosperity around the corner, however. In an op-ed piece in the NY Times titled “When Wealth Disappears”, Stephen King warns about the horrors that await us. Unlike the novelist, this King’s fears are centered on economic stagnation rather than vampires or werewolves.

NY Times Op-Ed October 6, 2013
When Wealth Disappears
By STEPHEN D. KING

LONDON — AS bad as things in Washington are — the federal government shutdown since Tuesday, the slim but real potential for a debt default, a political system that seems increasingly ungovernable — they are going to get much worse, for the United States and other advanced economies, in the years ahead.

From the end of World War II to the brief interlude of prosperity after the cold war, politicians could console themselves with the thought that rapid economic growth would eventually rescue them from short-term fiscal transgressions. The miracle of rising living standards encouraged rich countries increasingly to live beyond their means, happy in the belief that healthy returns on their real estate and investment portfolios would let them pay off debts, educate their children and pay for their medical care and retirement. This was, it seemed, the postwar generations’ collective destiny.

But the numbers no longer add up. Even before the Great Recession, rich countries were seeing their tax revenues weaken, social expenditures rise, government debts accumulate and creditors fret thanks to lower economic growth rates.

We are reaching end times for Western affluence. Between 2000 and 2007, ahead of the Great Recession, the United States economy grew at a meager average of about 2.4 percent a year — a full percentage point below the 3.4 percent average of the 1980s and 1990s. From 2007 to 2012, annual growth amounted to just 0.8 percent. In Europe, as is well known, the situation is even worse. Both sides of the North Atlantic have already succumbed to a Japan-style “lost decade.”

Surely this is only an extended cyclical dip, some policy makers say. Champions of stimulus assert that another huge round of public spending or monetary easing — maybe even a commitment to higher inflation and government borrowing — will jump-start the engine. Proponents of austerity argue that only indiscriminate deficit reduction, accompanied by reforming entitlement programs and slashing regulations, will unleash the “animal spirits” necessary for a private-sector renaissance.

Both sides are wrong. It’s now abundantly clear that forecasters have been too optimistic, boldly projecting rates of growth that have failed to transpire.

The White House and Congress, unable to reach agreement in the face of a fiscal black hole, have turned over the economic repair job to the Federal Reserve, which has bought trillions of dollars in securities to keep interest rates low. That has propped up the stock market but left many working Americans no better off. Growth remains lackluster.

The end of the golden age cannot be explained by some technological reversal. From iPad apps to shale gas, technology continues to advance. The underlying reason for the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated.

First was the unleashing of global trade, after a period of protectionism and isolationism between the world wars, enabling manufacturing to take off across Western Europe, North America and East Asia. A boom that great is unlikely to be repeated in advanced economies.

Second, financial innovations that first appeared in the 1920s, notably consumer credit, spread in the postwar decades. Post-crisis, the pace of such borrowing is muted, and likely to stay that way.

Third, social safety nets became widespread, reducing the need for households to save for unforeseen emergencies. Those nets are fraying now, meaning that consumers will have to save more for ever longer periods of retirement.

Fourth, reduced discrimination flooded the labor market with the pent-up human capital of women. Women now make up a majority of the American labor force; that proportion can rise only a little bit more, if at all.

Finally, the quality of education improved: in 1950, only 15 percent of American men and 4 percent of American women between ages 20 and 24 were enrolled in college. The proportions for both sexes are now over 30 percent, but with graduates no longer guaranteed substantial wage increases, the costs of education may come to outweigh the benefits.

These five factors induced, if not complacency, an assumption that economies could expand forever.

Adam Smith discerned this back in 1776 in his “Wealth of Nations”: “It is in the progressive state, while the society is advancing to the further acquisition, rather than when it has acquired its full complement of riches, that the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable. It is hard in the stationary, and miserable in the declining state.”

The decades before the French Revolution saw an extraordinary increase in living standards (alongside a huge increase in government debt). But in the late 1780s, bad weather led to failed harvests and much higher food prices. Rising expectations could no longer be met. We all know what happened next.

When the money runs out, a rising state, which Smith described as “cheerful,” gives way to a declining, “melancholy” one: promises can no longer be met, mistrust spreads and markets malfunction. Today, that’s particularly true for societies where income inequality is high and where the current generation has, in effect, borrowed from future ones.

In the face of stagnation, reform is essential. The euro zone is unlikely to survive without the creation of a legitimate fiscal and banking union to match the growing political union. But even if that happens, Southern Europe’s sky-high debts will be largely indigestible. Will Angela Merkel’s Germany accept a one-off debt restructuring that would impose losses on Northern European creditors and taxpayers but preserve the euro zone? The alternatives — disorderly defaults, higher inflation, a breakup of the common currency, the dismantling of the postwar political project — seem worse.

In the United States, which ostensibly has the right institutions (if not the political will) to deal with its economic problems, a potentially explosive fiscal situation could be resolved through scurrilous means, but only by threatening global financial and economic instability. Interest rates can be held lower than the inflation rate, as the Fed has done. Or the government could devalue the dollar, thereby hitting Asian and Arab creditors. Such “default by stealth,” however, might threaten a crisis of confidence in the dollar, wiping away the purchasing-power benefits Americans get from the dollar’s status as the world’s reserve currency.

Not knowing who, ultimately, will lose as a consequence of our past excesses helps explain America’s current strife. This is not an argument for immediate and painful austerity, which isn’t working in Europe. It is, instead, a plea for economic honesty, to recognize that promises made during good times can no longer be easily kept.

That means a higher retirement age, more immigration to increase the working-age population, less borrowing from abroad, less reliance on monetary policy that creates unsustainable financial bubbles, a new social compact that doesn’t cannibalize the young to feed the boomers, a tougher stance toward banks, a further opening of world trade and, over the medium term, a commitment to sustained deficit reduction.

In his “Future of an Illusion,” Sigmund Freud argued that the faithful clung to God’s existence in the absence of evidence because the alternative — an empty void — was so much worse. Modern beliefs about economic prospects are not so different. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear. But as the current fiscal crisis demonstrates, facing the pain will not be easy. And the waking up from our collective illusions has barely begun.

Stephen D. King, chief economist at HSBC, is the author of “When the Money Runs Out: The End of Western Affluence.”

July 30, 2013

Obama doublespeak on the economy

Filed under: economics,financial crisis,Obama,workers — louisproyect @ 7:05 pm

Last week Obama gave a speech at Knox College in Illinois on the economic situation that like his remarks on Trayvon Martin a few days earlier was filled with the number of bromides calculated to give his MSNBC posse just enough to rally around. To give you a sense of the shallowness of it all, he uses the term “folks” 26 times. One supposes that with people like Al Sharpton and Ed Schultz, the only thing that would cause a breach with the President is a Swiftian modest proposal that hungry folks eat their children.

Early on in the speech he says:

See, I had just spent a year traveling the state and listening to your stories — of proud Maytag workers losing their jobs when the plant moved down to Mexico. (Applause.) A lot of folks here remember that. Of teachers whose salaries weren’t keeping up with the rising cost of groceries. (Applause.) Of young people who had the drive and the energy, but not the money to afford a college education. (Applause.)

The hypocrisy in this paragraph reaches achieves Olympian proportions. In 2008, when Obama was first making these demagogic appeals about the fate of Maytag workers, the Chicago Tribune reported that the main union at the plant urged a vote for Hillary Clinton. Leaving aside the logic of that advice, the union was correct to point out that Lester Crown, one of Maytag’s directors, raised tens of thousands of dollars for Obama’s campaigns since 2003. Crown’s son James was Obama’s 2008 campaign’s financial director for that matter. After Lester Crown revealed that Obama never brought up the plant closing with him, Obama’s alibi was that he was unaware that the Crowns had anything to do with Maytag. Oh, sure. To give you an idea of the incestuous relationship between big capital and the Democratic Party, as if you needed any reminder, here’s what warisacrime.org had to say:

Lester Crown first met Obama when he was a 27-year-old intern at the Sidley Austin law firm in Chicago in the summer of 1989. One of Obama’s law professors at Harvard, Martha Minow, had recommended Obama to her father, Newton Minow, who was a partner at the firm. Minow took Obama under his wing and introduced him to his friend Lester Crown. Crown recalls that Minow called him and “said we have in our office a young man who I think is really going places and I’d like you to meet him.” Crown says he has been a supporter ever since.

For people who applauded Obama’s plaint over the Maytag runaway plant, my advice is that outfits like SeaWorld get rid of their trained seals and replace them with these clapping fools.

Obama claims that he is also troubled by the fact that there were “teachers whose salaries weren’t keeping up with the rising cost of groceries.” Really? If Obama really cared about teachers, he would take a stand against the union-busting initiatives of his ex-Chief of Staff Rahm Emanuel or the charter school agenda of his Secretary of Education Arne Duncan. Using the excuse that teacher productivity must be raised, administrations across the country are firing teachers left and right. In 2010 the school board of Central Falls fired all 93 teachers, a move that Obama described: “If a school continues to fail year after year after year and doesn’t show sign of improvements then there has got to be a sense of accountability. That happened in Rhode Island last week.” This led Zeph Capo, a teachers union official in Houston, to state:

I ripped the Obama sticker off of my truck. We worked hard for this man, we talked to our neighbors and our fellow teachers about why we should support him, and we’re having to dig the knife out of our back.

One imagines that Capo fell into line when the 2012 election season started. After all, Obama was better than Romney. Romney would have not only fired the teachers but tied them to the roof of his car on a vacation trip to Canada. We can’t have that, can we?

Continuing along in the education vein, Obama added that the number of “young people who had the drive and the energy, but not the money to afford a college education” distressed him. This statement above all brought to mind the character that Jon Lovitz played on Saturday Night Live, the Pathological Liar.

I didn’t always lie. No, when I was a kid, I told the truth. But then one day, I got caught stealing money out of my mother’s purse. I lied. I told her it was homework – that my teacher told me to do it. And she got fired! Yeah, that’s what happened!

Just days after Obama’s speech, Congress passed a bill that tied student loan interest rates to financial markets. This proposal was not the typical Republican plan “forced” on Obama but was his own profit-making scheme inspired by a paper written by Jason Delisle at the New American Foundation, whose president Anne-Marie Slaughter (appropriately named) was Hillary Clinton’s Director of Policy Planning at the State Department. As a member of the Peterson-Pew Commission on Budget Reform and the Committee for a Responsible Federal Budget, Delisle had just the right credentials to draft a policy paper that would stick it to the students. The Huffington Post reported that a record $51 billion profit could be expected from the student loan shark racket cooked up by Obama. That’s greater than the earnings of America’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.

Arguably the only Democratic Senator with a shred of integrity, Elizabeth Warren stated: “I can’t support a proposal that squeezes even more profits out of our kids. In fact, I think this whole system stinks.’’

After listing these items that fell in the doom-and-gloom category, Obama raised his hand over his eyebrows like the captain of a leaking vessel and saw the sun breaking through the dark clouds. Good-god-almighty, jobs were on the horizon: “So you add it all up, and over the past 40 months, our businesses have created 7.2 million new jobs. This year, we’re off to our strongest private sector job growth since 1999.”

An honest appraisal of the job market, however, would be based on the payroll-to-population ratio, something that reflects the real health of the economy. If, for example the population of a country was one million and the number of employed doubled from 100 to 200, who would cheer about that?

On June 6th Zero Hedge reported that the payroll-to-population was worse than a year ago and that “the unemployment rate is also rising with under-employment – at 18.0% – near 15 month highs.”

There is one sector that appears booming, however. The number of minimum wage waiters and bartenders hit an all-time high of 10,339,800 workers, increasing by a 51,700 in just one month. But mixing drinks like Tom Cruise in “Cocktail” must be a lot more fun than working in some boring factory with a health plan, so it is not that troubling to learn from Zero Hedge that manufacturing jobs have dropped four months in a row, now numbering 11.964 million jobs. Pretty soon the number of bartenders, waiters, and busboys will exceed the number of factory workers. I wonder what Marxist value theorists will make of that?

Obama was also pumped up over the fact that Ford is now hiring workers for its Kansas City plant. Glory be, America is coming back! Well, one can certainly understand why Ford would want to increase the number of workers in Kansas City since it cut a deal with the UAW that entry-level workers will be paid $16 per hour, just about the same amount that fast food workers in New York are struggling to win. Not only that, it will take a lot longer to get a raise. That’s about $31,000 per year, good enough for a mobile home and a night out once a week at the local Burger King. No wonder the UAW bureaucrats got out the vote for Obama in 2012. They, Obama, and the Ford bosses see eye to eye.

Obama made sure to get everybody on board the fracking bus. “We produce more natural gas than any country on Earth. We’re about to produce more of our own oil than we buy from abroad for the first time in nearly 20 years.” That’s great. With shale oil produced by fracking, we’ll be able to take advantage of all those new bartenders to get a pint of beer rather than put up with water catching fire as it flows from your faucet at home.

To make sure that Rachel Maddow will continue to coo over him, Obama made sure to throw in some cheap demagogy:

Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past 10 years have continued to flow to the top 1 percent. The average CEO has gotten a raise of nearly 40 percent since 2009. The average American earns less than he or she did in 1999. And companies continue to hold back on hiring those who’ve been out of work for some time.

Oooh, agitating against the top 1 percent. The Kenyan Marxist is at it again.

One understands why Obama would have to throw in a few words like these. Not only do they come cheap, at least those still laboring under the illusion that the capitalist system is redeemable can con themselves into believing that the President really cares.

Those illusions might finally be breaking down. Who cannot be cheered by the sight of fast food workers calling a one-day strike in New York? As the one host on MSNBC with a smidgen of liberalism left, Chris Hayes had on three people involved with the action last night, as well as my own Congressperson Carolyn Maloney who was on the picket line. Theirs is the voice of a new labor movement. It is a sign of its strength that it can draw upon Maloney for support:

HAYES: We`re talking about the fast food strike under way across the country tonight. Still with me at the table, Tsedeye Gebreselassie from the National Employment Law Project, McDonalds worker, Kareem Starks who is striking and Gregory Reynoso from Fast Food Forward, and joining us is Congresswoman Carolyn Maloney, Democrat from New York. Great to have you here, Congresswoman.

REPRESENTATIVE CAROLYN MALONEY (D), NEW YORK: Great to be here.

HAYES: Gentlemen, I want to get your reaction to the bite I played. If people are feeling they`re not being paid adequately, they have to go find a job someplace elsewhere paid higher wages. What`s your response to that? Just go get a higher wage job.

STARKS: You know, I work for McDonald`s for, like, five months. Before that, I worked for the Parks Department, climbing trees. I made $10.25 more than what I`m making now. So I`ve had a better job, and I was never in poverty like I am now. But whoever is, like, against it, obviously isn`t ever made $7.25 and never tried to budget paying for two kids and an apartment and bills and food all for $7.25.

HAYES: My sense, Gregory, if there were jobs available that paid higher wages, you would be happy to take them.

REYNOSO: Yes, I would be happy. The point is, it`s not these types of opportunities for everybody. There are not a lot of people what can really go out and find these types of jobs. That`s why people have to live on $7.25.

HAYES: Congresswoman, it`s fairly unusual to find members of Congress walking the picket line. There were a number. Why were you out there?

MALONEY: Well, I was looking for you, Chris.

HAYES: I was prepping this segment.

MALONEY: We were out there to show solidarity, the fight we have before Congress. We have a bill before Congress, HR-1010. We have 142 co- sponsors, 30 in the Senate and it would raise the minimum wage to $10.10, over 3 years, 95 cents a year. The president even in 2009 was calling for minimum wage increase in his state of the union and, of course, last week in Illinois. It`s a priority of his. It`s a priority of ours. We`re working hard to pass it.

HAYES: In the past, raising the minimum wage, you`ve been able to get some Republicans to vote for it. There was a minimum wage raised under George W. Bush that happened. There were a number of Republican votes. Is the Republican Party, do you think you can find people on the other side of the aisle who would vote for this bill?

MALONEY: I believe it merits bipartisan support and we`ll certainly be working to secure it. You`re not going to secure it if you don`t try.

HAYES: That doesn`t occur to me very much.

MALONEY: We`re going to try. We`re going it try because it`s too important and talking to Greg and Kareem, you see the importance of it. I believe you`re working two jobs.

REYNOSO: Yes.

MALONEY: He doesn`t have time to sleep. He`s working two jobs and it`s hard.

STARKS: I actually work the overnight shift last night and I`m here now.

HAYES: Thank you for coming in.

STARKS: I just, like, want to thank everybody for the support.

HAYES: Tsedeye, when I was talking to Kareem and Gregory about this idea that if you want a better job then go get a job that pays a higher wage what is happening right now in this economy, I don`t think this is underappreciated. The jobs are being created at the bottom of the wage scale. That is a trajectory that many Americans are experiencing.

GEBRESELASSIE: Kareem`s story is the story of our economy and how our labor markets have shifted so we`ve like hemorrhaged these decent paying jobs. What`s taking its place jobs that pay low wages like fast food and retail. Not only are those the jobs that are being created. They`re also jobs where real wages are actually declining, you know, since –

MALONEY: Out of the 3.2 million low-income jobs, 2/3 of them are women. Women are disproportionately in these low-income jobs.

GEBRESELASSIE: They`re also adults. That`s the other thing.

MALONEY: They always say they`re teenagers. They`re not. Most of them are –

HAYES: Were your co-workers, your co-workers, the image is, like, these are teens on summer jobs. Your co-workers were supporting families.

REYNOSO: Yes.

STARKS: There`s a few co-workers I know that has kids and supporting families and paying bills and stuff like that. I mean, it`s probably — McDonald`s and fast food chains usually target younger kids or whatever, but at the end of the day, there are still older people that have these jobs. There`s, like, a 60-year-old lady in my store.

GEBRESELASSIE: The median age for a fast food worker in this country is 29 years old.

HAYES: Wow.

GEBRESELASSIE: That is an adult. The other thing the industry says these are stepping stone jobs.

HAYES: You could rise up in the ranks.

GEBRESELASSIE: That`s just not the case. There`s limited opportunities for advancement.

REYNOSO: People from 50 years old, they`ll be working in these companies. Imagine those people supporting families.

HAYES: Will you quickly show that mobility graphic? It`s 2.2 percent jobs in the fast food industry are managerial, professional and technical occupations.

GEBRESELASSIE: The vast majority, 90 percent are frontline occupations. The median wage is $8.94 an hour.

HAYES: Compared to all industries, 31 percent –

MALONEY: It hasn`t gone up in four years.

HAYES: And it hasn`t gone up in four years. Tsedeye Gebreselassi from the National Employment Law Project, McDonalds worker, Kareem Starks, Gregory Reynoso from Fast Food Forward, and Congresswoman Caroline Maloney from New York, thank you all.

March 20, 2013

Catastrophism and the left: a response to Sasha Lilley

Sasha Lilley

Although I was aware that West Coast radio host Sasha Lilley, a kind of radical version of Terry Gross, had come out with a book on “Catastrophism”, I had no plans to read it or comment on it until I spied a review in Brooklyn Rail, a free monthly you can find at better bookstores.

Titled “The Bankruptcy of Doom and Gloom”, reviewer Robert S. Eshelman writes:

Lilley observes that while the New Deal did, in fact, originate in response to the Great Depression, the great American strike waves of 1898 to 1904 and 1916 to 1920 occurred during periods of relative economic prosperity.

I found so many things wrong with this that I decided to have a look at more of what comrade Lilley had to say. Fortunately, you can read her entire chapter in “Catastrophism: The Apocalyptic Politics of Collapse and Rebirth” on Google books. And I did. To start with, I have no idea which “great American strike wave” of 1898 to 1904 or 1916 to 1920 Lilley can possibly be referring to. I am fairly well versed in American labor history and have no idea what she is talking about.

Workers struck throughout the early 1960s for that matter. This was a time when the UAW, the Teamsters, and the railway unions went out on strike for substantial wage increases all the time. During the brief time I was a public school teacher in the late 60s, Albert Shanker was one of the most “militant” trade unionists in the U.S. if going out on strike is some kind of litmus test. This was the guy after all who resulted in civilization being destroyed after he got his hands on a nuclear weapon, as the Doctor told Woody Allen in “Sleeper” after he awoke. That’s pretty militant but I don’t think that’s the sort of thing Lilley had in mind.

But the kinds of strikes that capture our attention as Marxists are not the Samuel Gompers inspired affairs for higher wages. Instead we study what happened in Flint, Michigan in 1936 and 1937 when workers occupied factories and battled the cops and National Guard. This was a strike that began to educate workers about FDR back-stabbing the CIO. Like it and so many other major class battles of the 1930s, it eventually came to naught because the Communist or Social Democratic leadership (Victor and Walter Reuther in the case of the UAW) was determined to back FDR. If the trade union movement had broken with the Democrats and launched a labor party, American politics would look a lot different today. Trust me.

While most of Lilley’s barbs are aimed at the lunatic fringe, from the nuclear-war advocating Juan Posadas of the Fourth International to the Weathermen, she snares Henryk Grossman into her industrial-sized seine. She accuses Grossman of “collapsism” on the basis of his observation:

Despite the periodic interruptions that repeatedly defuse the tendency towards breakdown, the mechanism as a whole tends relentlessly towards its final end with the general process of accumulation… Once these countertendencies are themselves defused or simply cease to operate, the breakdown tendency gains the upper hand and asserts, itself in the absolute form as the final crisis.

Surely anybody with even a smattering of knowledge about Grossman’s theories of capital accumulation would understand that he posited the “escape valve” that the system used to postpone such a final crisis. Chapter 3 of Grossman’s 1929 “Law of the Accumulation and Breakdown” is titled “Modifying Countertendencies”. I don’t think it’s hard to figure out that any chapter with such a title will provide the evidence needed to clear Grossman of the charge of “collapsism”.

At the start of the chapter, Grossman identifies conditions that must be met in order for the “final crisis” to ensue. The first one is “that the capitalist system exists in isolation – that there is no foreign trade”. Fat chance of that, I’d say. As Grossman puts it:

Considering the gigantic increases in productivity and the enormous accumulation of capital of the last several decades the question arises —why has capitalism not already broken down? This is the problem that interests Marx:

the same influences which produce a tendency in the general rate of profit to fall, also call forth counter-effects, which hamper, retard, and partly paralyse this fall. The latter do not do away with the law, but impair its effect. Otherwise, it would not be the fall of the general rate of profit, but rather its relative slowness, that would be incomprehensible. Thus, the law acts only as a tendency. And it is only under certain circumstances and only after long periods that its effects become strikingly pronounced. (1959, p. 239)

Once these counteracting influences begin to operate, the valorisation of capital is reestablished and the accumulation of capital can resume on an expanded basis. In this case the breakdown tendency is interrupted and manifests itself in the form of a temporary crisis. Crisis is thus a tendency towards breakdown which has been interrupted and restrained from realising itself completely [emphasis added].

If you stop and think about it, this is not that much different from what David Harvey has said about  “spatial fix” or Rosa Luxemburg’s theory of primitive accumulation that Harvey has endorsed.

Speaking of which, despite accepting Rosa Luxemburg’s proviso that capitalism can forestall collapse through colonization, whether formally or informally, the stern judge Lilley still refuses to excuse her from the charge of “collapsism”. Parenthetically, while one cannot expect Lilley to have offered up a counter-analysis on the current stage of capitalism, isn’t it obligatory to take the collapse of the USSR, the Eastern European states, China, and Vietnam into account when offering blithe reassurances about the vitality of the capitalist system? One would never consider the possibility that capitalism will collapse of its own internal mechanisms, but hasn’t the opening up of huge markets and supplies of cheap labor given the system a new lease on life? Of course, Lilley might respond that this is what she has been talking about all along. That being the case, she owes Grossman and Luxemburg an apology for transforming them into “catastrophists” when her own analysis and theirs differs so little. Oh well, I’ll do it for her. “Henryk and Rosa, Sasha says she’s sorry.”

All this being said, I do agree that catastrophism is a problem in the Marxist movement (as opposed to the freak show on parade in her chapter.) Towards the end of WWII the American Trotskyist movement had a debate over the leadership’s catastrophist notion that the end of WWII would result in economic collapse and proletarian revolution. Felix Morrow challenged that view as I reported in an article I wrote about 17 years ago:

One of the main areas of contention between Morrow and the leaders of the FI was how these differences in policy would play out against the background of German politics. The SWP was convinced that the German working-class would lead the rest of Europe in the fight for socialism. A document states: “the German revolution constitutes the essential base of the European revolution, that it alone can provide the indispensable, genuinely harmonious political and economic organization for the Socialist United States of Europe.”

Morrow disagreed completely with these projections. He stated that the document contains not “a single reference to the fact that the German proletariat would begin its life after Nazi defeat under military occupation and without a revolutionary party.”

What was the source of these false projections? “To put it bluntly: all the phrases in its prediction about the German revolution — that the proletariat would from the first play a decisive role, soldiers’ committees, workers’ and peasants’ soviets, etc. — were copied down once again in January 1945 by the European Secretariat from the 1938 program of the Fourth International. Seven years, and such years, had passed by but the European Secretariat did not change a comma. Exactly the same piece of copying had been done by the SWP majority in its October 1943 Plenum resolution in spite of the criticisms of the minority.” Evidently dogmatism is not a recent trend in the Trotskyist movement.

Morrow stood his ground against all attacks. He appeared as a heretic. One of the charges against him made by Pierre Frank contained an interesting thought. If Morrow was right, what implications would this have for the world Trotskyist movement? Frank seemed to be thinking out loud when he said:

The false perspective of Morrow has a farther implication if it is really drawn to its logical end. If American imperialism has such inexhaustible powers that it can, as he thinks, improve the standard of living in Europe, then of course there exists a certain basis, on however low a foundation, for the establishment of bourgeois-democracy in the immediate period ahead. From that we must assume the softening of class conflicts for a period that the class struggle will be very largely refracted through the parliamentary struggle, that for a time the parliamentary arena will dominate the stage. If that were true, we would have to revise our conception of American imperialism. And of course the Trotskyist movement would have to attune its work to these new conditions — conditions for a while of slow painful growth, propaganda, election campaigns, etc., etc.

Frank’s fears were of course grounded in reality. This would be the fate of the Trotskyist movement and the rest of the left. The 1950s were not even a period of slow, painful growth, however. They were a period of decline. The FI only woke up to new realities when it shifted toward the student movement in the early 1960s. After a period of sustained growth, it returned to its “catastrophist” roots and proclaimed in 1975 that the workers were ready to launch an attack on capitalist power in the United States and the other industrialized countries. SWP leader Jack Barnes not only led this return to Comintern ultraleftism, he did the early communists one better and predicted war, fascism and proletarian revolution nearly every year or so for the last 20.

Contrary to James P. Cannon’s expectations, the post-war period through the early 70s was marked by rapid expansion of American capitalism and a period of relative prosperity for the working class. Lilley does not think that these objective conditions had much to do with the mostly white working class supporting the war in Vietnam, the racial status quo, sexism in the workplace, or the behavior stereotyped in “All in the Family”. I wish it wasn’t so but my memory of construction workers beating up antiwar students is too vivid. It may be vulgar Marxism to assert that worsening economic conditions makes it easier to persuade workers of socialist ideas but as Robert Fitch once put it, “Vulgar Marxism explains 90 percent of what’s going on in the world.”

Finally, on the question of “catastrophism” and the left. As I am thirty years older than Ms. Lilley, I have a somewhat different take on millenarianism and the left. When I used to drive around with my mom when I was 5 or 6 years old, I’d ask her if a big cumulus nimbus was a mushroom cloud. This was at a time when television was laden with doomsday messages about Russian nukes. A couple of years later I would be taking part in air raid drills at school, “ducking and covering” under my desk. It does not get much more apocalyptic than this. When I got to Bard College in 1961, I joined some upperclassmen in organizing a Welcome the Bomb Committee, a satirical jab at Governor Rockefeller who was pushing for an expansion of nuclear war shelters.

While I was still too apolitical to do anything about my fears, other students joined he Student Peace Union, a first sign of opposition to Cold War madness. Many of the people who joined the Young Socialist Alliance in the early 60s were SPU activists. They had come to the conclusion that the capitalist system threatened the survival of the human race and acted on that decision.

My turn came 6 years later as I faced being drafted to fight in Vietnam. When a Marxist student at the New School convinced me that such wars were inevitable in the capitalist system, I had no alternative but to join the Trotskyist movement. Does that make me a catastrophist? Guilty as charged, I suppose, and likely to remain one until I die.

March 6, 2013

Caught in the sequestration web

Filed under: financial crisis,unemployment — louisproyect @ 5:57 pm

Two days ago I got a letter from NY State Unemployment telling me to show up for an appointment next week to certify for extended benefits after my current benefits expire on August 14th. I got a chuckle out of the work search record I was supposed to bring with me. There were 10 rows, one for each prospective employer you contact each week.

Aren’t these people aware that once you reach the age of fifty or so, the chance of getting a job in your field is about the same as winning the American Idol contest? The NY Times reported on February 2nd:

In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.

These Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security — have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.

Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”

New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

“If I break my wrist, I lose my house,” said Susan Zimmerman, 62, a freelance writer in Cleveland, of the distress that a medical emergency would wreak upon her finances and her quality of life. None of the three part-time jobs she has cobbled together pay benefits, and she says she is counting the days until she becomes eligible for Medicare.

In the meantime, Ms. Zimmerman has fashioned her own regimen of home remedies — including eating blue cheese instead of taking penicillin and consuming plenty of orange juice, red wine, coffee and whatever else the latest longevity studies recommend — to maintain her health, which she must do if she wants to continue paying the bills.

“I will probably be working until I’m 100,” she said.

This morning I went to the Unemployment website to file a weekly claim and found this bit of news there:

ALERT: Federal cuts to extended unemployment benefits (beyond 26 weeks)

Updated March 1, 2013

Beginning with the week ending April 7th, federal government budget cuts known as sequestration could affect your unemployment insurance benefits.  If you are receiving regular UI benefits you will NOT see any change.  However, if you are receiving federal extended unemployment benefits that start after 26 weeks, the federal government has directed us to reduce your payments by 10.7% beginning that first week in April.  New York State has no control over these cuts in benefits and no ability to waive or reduce the level of cuts.  If you are going to be affected, you will receive a letter during the month of March telling you your exact benefit amount.  Please check this website for the most up to date information concerning the sequestration cuts.  And please be aware that our telephone call center agents do not have any more up to date information, so it is best to use our webpage, Facebook page or contact the United States Department of Labor at 1-866-487-2365, the White House at 202-456-1414 or your member of Congress at 202-224-3121.

What this means is that the 14 weeks of extended benefits I am eligible for after August 14th will be cut from $404 to $360. Now as it turns out my situation is not as dire as most facing such cuts. My wife is a full-time professor who makes a decent income, while I am collecting Social Security payments of $2400 per month. But what if I was 58 instead of 68, single, and living in a typical Manhattan apartment that rents $2000 per month for a studio? That easily could have been me.

Gawker has been running a series on the unemployed, including this tale of woe from someone who had been working in information technology for 9 years:

One evening, four months later, in January, 2010, I got a call at home from work, which was unusual. I was told that my position would be eliminated in favor of contractors, who would develop an e-commerce platform in house. The department head thanked me for my five years of work (it was actually 9, but she didn’t know that; she had only started six months before) and that was that. I kept updating the blogs in the normal way, but someone seemed to notice the snarky tone that the blogs suddenly seemed to take, and complained to the company. I got a phone call asking if I knew what the blogs were, and who updated them. I told them that I no longer worked there and did not normally give out advice for free, but that if there were domains out there that they owned and had control of, it might be considered a liability.

I have not held a full-time job since. I am either “overqualified” (too old), “lack proper qualification” (I have no degree) or I “don’t fit the company culture” (am not pretty enough to be a marketing director).

I have been staving off the sheriff by making crappy landing-page type websites for fly-by-nights that want to increase their Google rankings on their real websites, or by working phone banks, or by playing standup bass in bluegrass bands. There has not been a single month in the last two years where I have made more than $1200. My modest mortgage payment is $1198. My three children and I are living on a $420 SNAP benefit. My wife, who does actually have a degree, got a part time, temp job at the local library after they laid off all the regular employees and hired temps. She left about six months after the paychecks stopped.

Meanwhile the stock market keeps breaking records.

Maybe that’s a function of the New New Economy:

NY Times March 3, 2013
Recovery in U.S. Is Lifting Profits, but Not Adding Jobs
By NELSON D. SCHWARTZ

With the Dow Jones industrial average flirting with a record high, the split between American workers and the companies that employ them is widening and could worsen in the next few months as federal budget cuts take hold.

That gulf helps explain why stock markets are thriving even as the economy is barely growing and unemployment remains stubbornly high.

With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.

“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”

The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.

These factors, along with the Federal Reserve’s efforts to keep interest rates ultralow and encourage investors to put more money into riskier assets, prompted traders to send the Dow past 14,000 to within 75 points of a record high last week.

While buoyant earnings are rewarded by investors and make American companies more competitive globally, they have not translated into additional jobs at home.

Other recent positive economic developments, like a healthier housing sector and growth in orders for machinery and some other durable goods, have also encouraged Wall Street but similarly failed to improve the employment picture. Unemployment, after steadily declining for three years, has been stuck at just below 8 percent since last September.

With $85 billion in automatic cuts taking effect between now and Sept. 30 as part of the so-called federal budget sequestration, some experts warn that economic growth will be reduced by at least half a percentage point. But although experts estimate that sequestration could cost the country about 700,000 jobs, Wall Street does not expect the cuts to substantially reduce corporate profits — or seriously threaten the recent rally in the stock markets.

“It’s minimal,” said Savita Subramanian, head of United States equity and quantitative strategy at Bank of America Merrill Lynch. Over all, the sequester could reduce earnings at the biggest companies by just over 1 percent, she said, adding, “the market wants more austerity.”

As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966. In recent years, the shift has accelerated during the slow recovery that followed the financial crisis and ensuing recession of 2008 and 2009, said Dean Maki, chief United States economist at Barclays.

Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, he said, but disposable income inched ahead by 1.4 percent annually over the same period, after adjusting for inflation.

“There hasn’t been a period in the last 50 years where these trends have been so pronounced,” Mr. Maki said.

At the individual corporate level, though, the budget sequestration could result in large job cuts as companies move to protect their bottom lines, said Louis R. Chenevert, the chief executive of United Technologies. Depending on how long the budget tightening lasts, the job cuts at his company could total anywhere from several hundred to several thousand, he said.

“If I don’t have the business, at some point you’ve got to adjust the work force,” he said. “You always try to find solutions, but you get to a point where it’s inevitable.”

The path charted by United Technologies, an industrial giant based in Hartford that is one of 30 companies in the Dow, underscores why corporate profits and share prices continue to rise in a lackluster economy and a stagnant job market. Simply put, United Technologies does not need as many workers as it once did to churn out higher sales and profits.

“Right now, C.E.O.’s are saying, ‘I don’t really need to hire because of the productivity gains of the last few years,’ ” said Robert E. Moritz, chairman of the accounting giant PricewaterhouseCoopers.

(clip)

January 16, 2013

Is Growth Over?

Filed under: economics,financial crisis — louisproyect @ 2:59 pm

(I was invited to write a short article for an Indian journal that will be translated into Hindi on the question of “Crisis of Capitalism and Challenges of Marxism”. This is what I wrote.)

The question of capitalist crisis is being posed in a manner for the core industrial nations in a way that has not been seen since the 1930s. While few would doubt the severity of the recession at its height, there has been a tendency to see capitalism as now being in the recovery phase of the business cycle. For example, the unemployment rate in the U.S. is now at 7.7 percent, the lowest in 4 years. Despite this uptick, most of Europe remains mired in Eurozone depths.

One of the key questions facing the left is the long-term viability of the capitalist system. If you base yourself on the theory that the system is governed by cycles of boom and bust, the logical conclusion one might draw is that our chances for an all-out confrontation disappeared with the easing of the unemployment picture. This coupled with the decline of the Occupy movement can give one the impression that the system has stabilized itself for the time being.

From within the capitalist ideology camp, there has been a distaff note of some significance. Nobel Prize winning economist Paul Krugman, who is as committed to “globalization” as his fellow N.Y. Times op-ed columnist Thomas Friedman, asked the $64,000 question recently: does technological advance lead to the creation of new jobs? This is the base assumption of Schumpeter’s “creative destruction”, a theory that can be described as a vulgarization of the capital accumulation cycle described in Volume Two of Marx’s Capital.

On December 9th 2012, Krugman directed his attention to the replacement of living labor by machinery in a column that he described as “an old-fashioned, almost Marxist sort of discussion”:

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries.

Krugman posed an even deeper challenge to capitalist orthodoxy on the 27th of December in a column titled “Is Growth Over”. It referred to the research of an economist named Robert Gordon:

Recently, Robert Gordon of Northwestern University created a stir by arguing that economic growth is likely to slow sharply — indeed, that the age of growth that began in the 18th century may well be drawing to an end.

Mr. Gordon points out that long-term economic growth hasn’t been a steady process; it has been driven by several discrete “industrial revolutions,” each based on a particular set of technologies. The first industrial revolution, based largely on the steam engine, drove growth in the late-18th and early-19th centuries. The second, made possible, in large part, by the application of science to technologies such as electrification, internal combustion and chemical engineering, began circa 1870 and drove growth into the 1960s. The third, centered around information technology, defines our current era.

If this is true, then Marxism is presented by a set of circumstances that have never been seen before. When the Communist Manifesto was written, capitalism was revolutionizing the means of production everywhere.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

But what if the “heavy artillery” has turned into a peashooter? What are the political consequences for a social system that cannot continue to expand the needs of a growing population, especially in the developing countries? Left Keynesian economist Joan Robinson once wrote, “…the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.” If working people cannot expect to be a wage slave, then what other options do they have except to confront the social system that they have made a compact with for centuries? For all of the tendencies to look at the Arab Spring as a movement against despotic regimes (and rightly so), the underlying failure of the capitalist system to provide the basic necessities of life was what fueled the revolt. When a street peddler set fire to himself in Tunisia, it was his way of saying that the system was not working for him. When a Greek pensioner took his life in front of the parliament building last year, he was making a similar statement.

With class lines being drawn more sharply than at any time since the 1930s, the Marxist left must rise to the occasion. Keeping in mind that the Latin American left led by Hugo Chavez has called for a 21st Century Socialism, we must consider what this means for revolutionaries in countries like the U.S., Germany, Britain or France. While the working class remains relatively quiescent in such countries (largely a function of the deindustrialization Krugman is concerned about), there is little doubt that struggles will continue even if they do not assume the same character they did in the 1930s. The Occupy movement was the first sign of that and we should be alert to future manifestations. The ruling class is prepared for us and we should be equally prepared for the monumental battles to come.

 

December 20, 2012

Argentina, vulture funds, and Thomas Griesa

Filed under: Argentina,economics,financial crisis,imperialism/globalization — louisproyect @ 9:00 pm

Thomas Griesa

My first exposure to “vulture funds” was at the 2010 Left Forum in NY, where I walked into a BBC documentary by Greg Palast that was in progress. Although I didn’t care for Palast’s Michael Moore-like shtick as he accosted and badgered the financiers who buy up the debt of poor countries at reduced prices and then sue them to get inflated repayments, I was glad to see attention paid to what Woody Guthrie once referred to as bankers robbing people with a fountain pen.

Although I didn’t make the connection at the time, this comment on my blog from an Argentinian who was subscribed to the Marxism list that preceded Marxmail was dealing with the same kind of larceny:

Hi, dear Louis. I’m Julio Fernández Baraibar, your friend from Buenos Aires. I lost the contact with you, but I remember you very heartly.

We are struggling just now against the decision of Judge Griesa and I remembered that you, once, told something about him in relation with somo trotskist militants. Do you remember the case?

I wait for your response.

Greetings

In 2001 Argentina’s economy had totally collapsed, foreshadowing in many ways what has befallen most of southern Europe. It defaulted on $95 billon worth of bonds. When Nestor Kirchner took office in 2003 he proposed that Argentina offer new bonds paying 30 cents for each dollar owed in default, an offer accepted by 93 percent of the original bondholders.

A couple of bondholders held out, however. One was NML and the other was Aurelius Capital Management Inc., both who insisted on getting 100 percent of the face value of the bonds. On October 26th Judge Thomas Griesa ruled in their favor, forcing Argentina to pay $1.4 billion. NML was particularly aggressive in pressing their demands, winning a court order to detain an Argentine naval vessel in a Ghana port as a kind of hostage. (On December 17 the U.N. ruled that the ship had to be released.)

The June 10, 2011 Irish Times described the strategy of Aurelius:

MANHATTAN-BASED lawyer Mark Brodsky named his hedge fund after the Roman emperor Marcus Aurelius, a Stoic philosopher.

He set up the fund in 2005 but Brodsky fine-tuned his skills as a distressed debt investor over nine years at Elliot Associates, a hedge fund known for taking on sovereign states that defaulted on debt, particularly Peru and Argentina.

The strategy he learnt at Elliot was straightforward buy debt on the cheap and then run a legal campaign to recover a higher value. This is the art of the vulture fund which sees value in high-risk investments in the debts of financially stricken firms and countries.

A recent win for Aurelius was its purchase of just $5 million out of $25 billion in debt at Dubai World, the state-owned investment fund, for 50 cents in the dollar.

NML is a subsidiary of Elliot Associates, the forenamed vulture fund. Paul Singer is the CEO and a major player in rightwing politics, having contributed millions of dollars to the Romney campaign, serving as the chairman of the Manhattan Institute, and funding the American Spectator, a key rightwing magazine. During the Occupy movement’s heyday, a Spectator reporter named Patrick Howley basically functioned as an agent provocateur by his own admission:

This weekend, journalist Patrick Howley of the American Spectator admitted infiltrating the Occupy DC protest and leading a charge into the Smithsonian Air and Space Museum which resulted in his and several other protestors’ being hit with pepper spray. His explanation? The protesters had been ruining his story of how crazy they were by failing to think of this course of action on their own.

In his original story on the subject (now removed from the Spectator site) Howley noted: “As far as anyone knew I was part of this cause — a cause that I had infiltrated the day before in order to mock and undermine in the pages of The American Spectator — and I wasn’t giving up before I had my story.”

Argentina’s minister of the economy Hernán Lorenzino reacted angrily to Griesa’s decision, calling it “a kind of legal colonialism” and that all “we need now is for Griesa to send us the Fifth Fleet.”

On November 29 the United States Court of Appeals for the Second Circuit issued a stay on Griesa’s order. Ironically one of the factors favoring Argentina is the determination of some other scumbag hedge funds to keep NML and Aurelius from getting their way.

Chief among them is Gramercy Funds Management that holds the discounted Argentine bonds as a tax shelter for its clients. It fears that a full-blown nationalist response by Argentina to default once again will harm its own profit-seeking interests. In many ways the rivalry between Gramercy and NML/Aurelius is like a war between rival mafia gangs over who will control a legitimate business.

There’s another mafia gang that has taken Gramercy’s side in all this, namely the U.S. government that worries about the turbulence that would ensue if Argentina defaulted. Reuters reported on December 13:

U.S. government lawyers reiterated their position that the court’s interpretation of the “equal treatment” clause in Argentina’s defaulted bonds “may adversely affect future voluntary sovereign debt restructurings, the stability of international financial markets, and the repayment of loans extended by international financial institutions.”

The U.S. government argued this point in April with an amicus brief when Argentina first appealed the original court orders made by U.S. District Court Judge Thomas Griesa in Manhattan.

Let me conclude with a word or two about Thomas Griesa who is now 82 years old. A life-long Republican, Griesa was appointed to the United States District Court for the Southern District of New York by Richard Nixon in 1972.

In that capacity Griesa served as the judge in the landmark suit that the Socialist Workers Party filed against the FBI in 1973 for its decades-long disruption of party activities, including the burglaries and poison pen letters that victimized many members including me.

In between jobs at the time, I was able to attend many sessions of the trial and observed Griesa as entirely fair-minded despite his Republican roots. In one of the more memorable exchanges, he allowed Stephen Cohen to make the case that the Russian Revolution was a massively supported movement despite constant objections by the FBI lawyers. He decided in favor of the SWP claims but disappointed us by awarding us only $264,000, a relative pittance compared to the $28 million we had demanded.

The irony of course is that in the final analysis we ourselves destroyed the party far more efficiently than the FBI bumbling ever could. Let’s hope that Argentina proves far more resilient since—after all—the Latin American revolution that “Kirchnerism” is a constituent part of has a lot more importance than we ever had.

November 12, 2012

Who says the Koch Brothers and Sheldon Adelson wasted their money?

Filed under: capitalist pig,financial crisis,parliamentary cretinism — louisproyect @ 8:54 pm

David and Charles Koch

Sheldon Adelson

One of the things heard incessantly since Election Day is that the Koch brothers and Sheldon Adelson did not get their money’s worth. Alternet’s R.J. Eskow spoke for many of his co-religionists:

I should be a better person than this, but I take no small amount of satisfaction in knowing that Sheldon Adelson and the Koch Brothers wasted lots and lots and lots of money this year.

It is necessary to put this into perspective. The Koch brothers spent $400 million. That represents just .008 of their combined personal fortune of fifty billion dollars. Forbes Magazine shared my perspective when it came to Adelson:

Yes, Sheldon Adelson crapped out on Election Day. But Adelson has plenty of more chips to place on the table–billions more.

True, the casino billionaire spent at least $53 million on this election cycle with little to show for the investment. And while it’s a massive amount of money for most people, and most companies, it’s pocket change for Adelson. The Las Vegas Sands boss is worth $20.5 billion. My colleague Clare O’Connor drew this great comparison yesterday: “Imagine an average person with a $100,000 net worth buying a pair of Tory Burch shoes ($250). You’d care if you lost them, but you wouldn’t be ruined.” Adelson’s $53 million is gone. The billionaire isn’t going anywhere.

Although I am not privy to the innermost calculations of such characters, I think that they share one thing with me, namely a belief that there is no room for compromises when it comes to electoral politics.

Historically this was not always the case with the Republicans. The most notable example in recent times was the presidency of Dwight D. Eisenhower who Robert Welch, the founder of the John Birch Society, described in these terms: “Could Eisenhower really be simply a smart politician, entirely without principles and hungry for glory, who is only the tool of the Communists? The answer is yes.” He also stated: “With regard to … Eisenhower, it is difficult to avoid raising the question of deliberate treason.”

It should also be noted that Fred Koch, the paterfamilias of the reactionary gang, was a founding member of the John Birch Society and that his sons’ funding of the nativist and racist Tea Party movement reflects a continuity with the past.

It is important to understand that at one time “Eisenhower Republicans” enjoyed hegemony in the party. Despite the tendency of the Communist Party and many 60s radicals to dub Richard Nixon as a looming fascist, he had plenty in common with Eisenhower, for whom he served as Vice President for two terms. In an interview with Howard K. Smith in January 1971, he said “I am now a Keynesian”. Can anybody imagine that empty suit President Obama saying something like that? This, in fact, is where he stands:

Reagan spoke to America’s longing for order, our need to believe that we are not simply subject to blind, impersonal forces, but that we can shape our individual and collective destinies, so long as we rediscover the traditional virtues of hard work, patriotism, person responsibility, optimism, and faith.

That Reagan’s message found such a receptive audience spoke not only to his skills as a communicator; it also spoke to the failures of liberal government, during a period of economic stagnation, to give middle-class voters any sense that it was fighting for them. For the fact was that government at every level had become too cavalier about spending taxpayer money. Too often, bureaucracies were oblivious to the cost of their mandates. A lot of liberal rhetoric did seem to value rights and entitlements over duties and responsibilities.

Barack Obama, Audacity of Hope, p. 31-32

Some people, especially younger people who have no memory of liberal Republicanism, believe that Ronald Reagan transformed the Republican Party. In reality, the seeds were planted in 1964 when Barry Goldwater said in his acceptance speech as Presidential candidate for the Republican Party: “I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue!” Come to think of it, he was right.

Goldwater’s aim back then was to transform the Republican Party into a conservative party. In doing so, he found a counterpart among many liberals who yearned that the Democratic Party become more purely liberal. In practice this meant purging the party of the Southern racists, something that turned out to be unnecessary after Nixon adopted his “Southern Strategy”.

Today there are no important liberal Republicans. Arguably, the last one standing was Pennsylvania Senator Arlen Specter, who defected to the Democratic Party in 2009 three years before his death. (It is not so well-known that Specter was a Democrat to start with, from 1951 to 1965.)

Unlike the Republicans, the Democrats never could be mistaken for a liberal party after George McGovern’s candidacy in 1972, at least when it came to presidential nominations. Starting with Carter, there has been a steady drift toward the ideology of the Democratic Leadership Council, a nasty collection of rightwing politicians who began defining themselves as “New Democrats” in the same spirit of Tony Blair’s “New Labour”.

In March 2009, Obama told the New Democratic Coalition, a group described by politico.com as “comprised of centrist Democratic members of the House, who support free trade and a muscular foreign policy”, that he indeed was a New Democrat.

Before Bruce A. Dixon split with Black Commentator, a website that eventually became typified by Bill Fletcher Jr.’s pro-Obama think-pieces, he wrote an article titled “In Search of the Real Barack Obama: Can a Black Senate candidate resist the DLC?”. For some reason, this must have nettled candidate Obama who took the trouble to write the ‘zine prior to his election:

Dear Black Commentator:

I read with interest, and some amusement, Bruce Dixon’s recent article regarding my campaign, and his suggestion that perhaps my positions on critical issues facing this country are somehow being corrupted by the influence of the Democratic Leadership Council (DLC).  Given that Bruce [and I] worked together back in 1992 to empower communities through organizing and the ballot box, I wish he’d taken the time to give me a call and check out his facts.

To begin with, neither my staff nor I have had any direct contact with anybody at DLC since I began this campaign a year ago.  I don’t know who nominated me for the DLC list of 100 rising stars, nor did I expend any effort to be included on the list beyond filling out a three line questionnaire asking me to describe my current political office, my proudest accomplishment, and my cardinal rules of politics.  Since my mother taught me not to reject a compliment when it’s offered, I didn’t object to the DLC’s inclusion of my name on their list.  I certainly did not view such inclusion as an endorsement on my part of the DLC platform.

This, of course, was still at the time when Obama was trying to fool some people into thinking that he had liberal credentials. After his election, he dropped any such pretenses. In his re-election bid, he made no effort to reestablish such credentials since so few people would take him seriously. Instead, his super-PAC spent hundreds of millions of dollars making the case that Romney was a greedy, out-of-touch bastard. The ads reminded me of Pee Wee Herman’s rejoinder to his tormentor Francis in “Pee Wee Herman’s Big Adventure”: “I know you are, but what am I?”

Well, I know what Obama is. He is a liberal Republican, maybe even a centrist Republican. In fact, if anybody can tell the difference between a Gerald Ford and a Barack Obama, except for their pigmentation, they have a talent for splitting hairs second to none.

Yes, Virginia, there has been a realignment in American politics, at least on the Presidential level. We have conservative Republican presidents going back to Reagan, but with the Democrats we get nominees who are indistinguishable from Gerald Ford or Howard Baker. But when one of these slobs gets elected, as happened last Tuesday, we get the liberal pundits greeting it once again as the second coming of the New Deal.

Returning to the Republican Party, the question of Koch and Adelson’s money being “wasted” deserves further interrogation. I strongly recommend a look at Chris Kromm’s very fine Southern Voice, where you can find an article by Chris titled “Did Big Money really lose this election? Hardly.” Chris writes:

The fact that TV ads are most effective with less-engaged voters might explain money’s continuing influence in state and local races, which receive far less media exposure and voters may know even less about the candidates and issues.

As Facing South and The New Yorker showed, in 2010 an onslaught of outside spending in North Carolina by outside money groups led by Republican donor Art Pope was a key factor in fueling a historic GOP takeover of the state legislature.

That put N.C. Republicans in charge of the once-a-decade redistricting process, producing new maps which the John Locke Foundation — which is largely funded by Pope’s foundation — readily admits were crucial to enabling the GOP to expand its power in the General Assembly in 2012.

Money’s state-level influence in North Carolina continued this year, too. According to FollowNCMoney.org, a money-tracking website run by the Institute for Southern Studies, more than $14 million from super PACs and other outside groups poured into N.C. state races.

Of the top 10 spending groups in North Carolina — which made up more than 90 percent of the $14 million total — seven were Republican-leaning groups, who outspent their Democratic-leaning counterparts by more than a two-to-one margin.

And unlike the national super PACs, conservative spending groups in North Carolina enjoyed a much higher winning percentage: Of the 10 races that attracted the most outside money, nine ended in Republican victories. (As for Pope, he and his operatives are well-represented in the newly-elected GOP governor’s transition team.)

But even if Koch and Adelson type funding had less of an effect in the South and elsewhere, that would not prompt such donors to wash their hands of their project, which is not limited to immediate and measurable goals. They are building a reactionary movement that is seeking to turn back the clock to 1890 or so. By spending hundreds of millions of dollars, they push the political agenda to the right. In doing so, the “centrist” politics of a self-avowed New Democrat like Obama shifts to the right along with them.

More to the point, the reactionary agenda of the Koch Brothers is ultimately shared by many corporate bosses who never would be caught dead at a Tea Party rally. Nothing symbolizes this better than The American Legislative Exchange Council (ALEC) that gained some notoriety after its heavy paws were detected in the struggle against Scott Walker in Wisconsin and, even worse, their support for “Stand Your Ground” laws that resulted in Trayvon Martin’s murder.

In the outcry over their Koch-funded skullduggery, some major corporate members were forced to drop their affiliation, including Walmart, Coca-Cola, Wendy’s, Kraft Foods, McDonald’s, the Bill and Melinda Gates Foundation, and Blue Cross/Blue Shield.

The people who run these corporations are not that interested in ideology. What they are interested in, however, is protecting their class interests. The ultimate explanation for the rightwing assault on our standard of living, our safety on the job, our right to a job, our health, and our right to express our opinion, is a declining rate of profit. While it is not within the purview of this article, and more importantly my limited expertise, to explain why there is such a tendency, suffice it to say that the good old days are gone forever. Despite the rhetoric of a Ronald Reagan on one side and a Barack Obama on the other (all proportions being guarded), well-paying jobs is a thing of the past.

I do recommend an article by Marxist economist Michael Roberts who blogs at http://thenextrecession.wordpress.com/ titled “Does it matter who wins?”, written the day before the election. It is a close look at the economic prognosis of the U.S. and concludes on this note:

For me, the bellwether for the health of US capitalism is the rate of profit.  That shows little sign of returning to levels seen in the late 1990s, let alone back to the golden age of the 1960s.  A low and probably falling rate of profit implies a low rate of new investment ahead, with unemployment staying well above ‘normal’ levels.  And it implies the likelihood of another slump in production before the next four years are over along with the continuance of the Long Depression, now in its fifth year.  And remember the Long Depression that started in 1873 lasted 20 years.

Given these prospects, the bourgeoisie will be forced to rely on the carrot and the stick—or perhaps more accurately, the soft cop and the hard cop. With declining profits, the ruling class will be forced to cut expenses both privately and publicly. Wages will be pushed down, mostly as a result of the threat of runaway shops our outright closings. Expenditures on education, health and the environment will be cut as well.

In the long run, the U.S. will look more and more like Detroit with the wealthy living in gated complexes and the poor forced to make do with less and less. Furthermore, as Hurricane Sandy demonstrates, “natural” disasters will weigh more heavily on the less privileged.

Under such circumstances, there will be mounting anger of the sort on display throughout Southern Europe. The more far-sighted members of the ruling class are planning ahead, to see what powerful and ultimately lawless measures will be necessary to suppress any revolt that threatens their hegemonic rule. And, as well, the more far-sighted members of the working class, including the intelligentsia that has thrown in its lot with this class, will be required to put together an audacious and intelligent plan of action that can meet such scum head-on and defeat it.

November 5, 2012

Does it matter who wins?

Filed under: economics,financial crisis,parliamentary cretinism — louisproyect @ 4:35 pm

Michael Roberts Blog

blogging from a marxist economist

Does it matter who wins?

Does it matter who wins the US presidential election tomorrow?  Is it Tweedledum and Tweedledee?

It is often claimed by non-Marxists that the Marxist materialist conception of history leaves no room for the role of the individual.  Individuals are just swept along by historical forces, both economic and social.  So whoever is a leader of a major hegemonic state like the US will make no difference.  And it’s true that the materialist conception of history does explain why stone age hunter gatherers of Australia or the Americas could not resist the invasion and destruction of their modes of production and civilisations by small groups of European plunderers and settlers relying on the military power and technology of capitalism.  In the end, it did not matter who the ruler of the Inca or Aztecs was or how clever the hunters in the middle of Australia  were in surviving the desert.  Even the most able and clever of them was eventually defeated by even the most inept of European invaders.

But that does not mean individuals cannot make a difference.  History makes man, but man makes history (Marx).  The role of the individual in history is very much part of Marxism, as any reading of Marx’s 18th Brumaire masterpiece on the rise of Louis Bonaparte shows.  But the actions of individuals have to be placed in context.  And the context of this election suggests that whoever wins will not alter the US economy much or the livelihoods of American citizens.

full: http://thenextrecession.wordpress.com/2012/11/05/does-it-matter-who-wins/

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