Hey Paul Krugman

This is for all the Krugman junkies out there.

Mark Ames on Going Postal

Radio Interview: Mark Ames on Recession Murder/Suicide Rampages from Team eXiled on Vimeo.

A Look Back at the Good Old Days of the Miracle Economy

< / capitalism >

Human costs of an economic meltdown.

One Bank... Two Years Later

A few comrades of mine update the infamous "One Bank" song.

Mike Davis on Why the Future Can Wait

Mike Davis has a very good article on Tomdispatch arguing that while infrastructure investment is desperately needed in the US, keeping our existing public institutions like hospitals and schools operating should be top priority:

Yet saving (and expanding) core public employment is, hands-down, the best Keynesian stimulus around. Federal investment in education and healthcare gets incomparably more bang for the buck, if jobs are the principal criterion, than expenditures on transportation equipment or road repair.

For example, $50 million in federal aid during the Clinton administration allowed Michigan schools to hire nearly 1,300 new teachers. It is also the current operating budget of a Tennessee school district made up of eight elementary schools, three middle schools, and two high schools.

On the other hand, $50 million on the order book of a niche public transit manufacturer generates only 200 jobs (plus, of course, capital costs and profits). Road construction and bridge repair, also very capital intensive, produce about the same modest, direct employment effect.

State Capitalism in China

The Chinese ruling class has taken a decisive step towards a more aggressive form of state capitalism, announcing a massive plan to spend nearly ten percent of GDP on an infrastructure, social welfare, and public works plan. The plan is designed, among other things, to bolster consumer spending in the face of falling exports.

This kind of move seems to me to be the next step beyond the kind of financial state capitalism we saw spreading last month. As European governments moved to ensure larger and larger amounts of bank's deposits, either through forced equity or nationalization, the US government was forced to do the same in order to stave off a mad rush of deposits to the now safer European banks. Whether China's move will force a similar scramble globally seems unsure. In the United States at least, there is a sedimented attitude in the ruling class that aggressive spending is, at the moment, out of the question. Yet China's move to preserve its buying power surely puts pressure on the US to do the same, lest the tremendous importance of the American market in the global economy diminish.

September Sees Biggest Job Loss Since 2003

And this survey was taken before Wall Street went belly-up.

No Donny, These Men Are Nihilists. There's Nothing to be Afraid Of.

Nihilists are running our country! Won't someone think of the children?

As of 9:30 this morning, the stock sell-off has begun.

Wall Street in Panic

Alan Greenspan says the economy is in a "once in a century" crisis. Lehman Brothers and Merrill Lynch are supplicating themselves before any possible buyer. Wall Street executives hunker down in their financial bunkers.

Rate of Exploitation: Gooooing Up!

Google has announced they are nearly doubling the cost of their employee childcare program - from $33,000 to $57,000 a year. Responding to the flood of employee complaints over the rate hike (the reporter describes some parents weeping openly), Google co-founder Sergey Brin said he had no sympathy at all for the parents, and was tired of his employees feeling so entitled. Brin holds 13.6 billion dollars in shares of Google, and has a net worth of 18 billion (meaning with his shares he could pay for child care for 230,000 employees). This hike in rates amounts to a massive spike in the rate of exploitation for Google employees, who have effectively just had a thirty thousand dollar wage cut.

Bankrupting Black America

The Nation is carrying an absolutely brilliant article by Kai Wright on how the mortgage crisis (it seems like we have a lot of crises these days, doesn't it?) is affecting Black America. It's a painful article in many ways, detailing the tremendous transfer of wealth taking place from the Black community to various banks and investors (estimated by United for a Fair Economy to be between 164 and 213 billion dollars). What I appreciated most about the article was his utter demolition of the myth of the "predatory borrower" bandied about by Michelle Malkin and other running dogs of Wall Street. Wright shows that:

-More than half of all subprime loans were finances of existing home loans.

-More than half of all refinance loans to African Americans were subprime.

-Among low-income Black borrowers, 62% of loans were subprime, more than double the rate for low-income white borrowers.

Thus the mortgage crisis doesn't stem from the efforts of the greedy poor to live beyond their means in a million dollar mansion they knew they couldn't afford, but from people who needed a little extra cash to get by and were told their house would be a safe investment. Wright details how one family, struggling to put a daughter through college, was cold-called by a mortgage agent who offered to refinance at a much lower rate. This is predatory lending, red in tooth and claw.

Food Crisis and Economic Meltdown

Elizabeth Terzakis on the Global Food Crisis and Economic Meltdown:

More on the situation in Milwaukee

Today's Milwaukee Journal Sentinel provides more backdrop to the near food riot that took place earlier this week. Milwaukee is the eight poorest city in the country and has the fourth highest number of children in poverty said Sherrie Tussler, executive director of the Hunger Task Force of Milwaukee. According to Tussler, government food donations have dropped 31% since 2001. In the first five months of 2007, the Task Force was forced to spend $3,400 on food. This year, however, between January and May alone, the group has spent $94,000. Regarding child hunger, the government only provides free food to summer school children under the age of 12, so the Task Force needs to provide snacks for children 13 and over. Another food relief organization, Second Harvest, reported that donations were down 1 million pounds, or 15%, from last year through May.

Near Food Riot in Milwaukee, WI, USA

The wave of food riots against skyrocketing food prices that has rocked the developing world from Haiti to Egypt is knocking at the door in the United States. Earlier this week in Milwaukee, nearly 3,000 hungry people showed up at 3am to receive emergency food coupons. The cops had to show up in force because several people were trampled in the desperate scramble for the woefully inadequate aid. While the offer was initially extended to the victims of the recent flooding in the state, officials reported that the majority of the people who showed up were not flood victims but victims of poverty and the weak economy. This is just one more example of how working people in the industrialized nations are not immune to the global food crisis. Hopefully working people in the US will take after their brothers and sisters in other countries and aim their outrage at the government that has proven to be criminally negligent to the plight of people suffering from economic recession, rising food and fuel costs, lack of health care and rising unemployment.

Irony of ironies: Clinton calls for help with personal debt

I couldn't believe my eyes when I read this CNN.com headline : "Clinton wants help with her campaign debt". Apparently Clinton is over $20 million in debt because she had to donate heavily to her own campaign and is now asking supporters to lend a hand to help her recover before the late August deadline. In a video appeal, Clinton's campaign wrote:

“By helping us pay off our campaign debt, you’re not just helping Hillary elect a Democratic president and grow our majority in Congress. You’re making it possible for her to work as hard as she can on the issues we care about.”

Are you shitting me?

Juxtapose This

CEO Pay New Records as Economy Tanks.

More Americans Going Hungry.

"By September, Iraq war costs will trounce those of the 12-year Vietnam War"

I guess we've been saying this all along, but holy shit. That's a lot of zeros.

If I WasPresident

A couple of real-life (i.e., not electronic) friends recently asked me what I thought or had to say about recent proposed changes to the Venezuelan constitution made by President Hugo Chavez.

Let's take a moment to law down one axiom for the duration of the discussion: proper socialism, as conceived of in my theoretical tradition ({Marx, Engels, Lenin, Trotsky, Gramsci, et seq.}) requires a revolution. Not only is it the response to the commonly touted "you can't change the way people think" objection, but it's also common sense. Ask David Lesar if he feels like giving up his money so that poor people can eat. Not only will he respond in the negative, but he also commands a company that has the ear of the Federal Government (and therefore the military) which can help him make that point abundantly clear.

In that sense, objections to Chavez's proposed abolition of term limits are misplaced. The objections should come in noting that legislation to socialism is not sufficient for a change in the mode of production. Or to put it another way, vote for Nader, but be his fiercest critic on his first day in office. Term limits, per se, are apolitical (remember that the U.S. has a term limit largely by historical accident). If a candidate does good work for the people, that should license the indefinite continuation of his/her political agenda, which is not necessarily disjoint with the candidate.

Do I think Chavez might abuse this term limit removal? Or to reply directly, what of these complaints, raised by the Chavez opposition:

His critics say Mr Chavez is attempting to remain as president for decades, following the example of his close friend Fidel Castro in Cuba.

"Chavez is seeking to reduce the territory held by the opposition and give his intention to remain in power a legal foundation," said Gerardo Blyde, an opposition leader.

These are legitimate fears, but they are not novel to Venezuela. Think of the unending slide rightward of seemingly left-wing candidates. If a pro-war majority of apples can spoil the healthy anti-war apples, then of course we should have systemic fears about political corruption. But this is like saying that just the 2000 election was stolen, as if all elections in the U.S. aren't stolen. Moral: if you like a candidate, that candidate should be allowed to remain in office, but don't confuse punching a ballot box with marching in the streets, and do not allow your candidates to confuse the two, either.

It's also worth noting that the proposed Venezuelan constitutional reforms aren't only about Chavez's term limits, or even majority so. The above article notes that it also brings the national bank under federal control, and mandates a six-hour working day. Six hours! We can't even establish a decent minimum wage in this country!

Furthermore, the legislation expands the local council power. Taken with this in mind, Chavez's term limits seem almost puerile. Some voice concerns at this move:

Mr Lopez agrees that people should have more control of their communities, but he says the president's definition of people power is a contradiction.

"Communal councils have to register themselves with the president's office. But if they're not absolutely loyal to the government, they won't get registered. And if there're not registered, there's no access to government funds.

"You need to promote plurality, tolerance and diversity. Without this, there is no democracy," he continued.

However, history has already shown us what the opposition's conception of plurality is: a military coup. Almost as hypocritical as American politicians claiming to understand democracy.

Speaking of democracy, I will leave with this quote, and a question:

But all this is raising concerns among those who dislike the radical nature of the president's politics. Opposition groups say democracy is being politicised, with the local councils used as hubs for political activism.

I'm not sure how this even has an understandable meaning. How does one politicize democracy?