Focus on jobs, not on the budget deficit!

There are quite a few people in denial about one lesson from the crisis -- the value of the Keynesian perspective:

Keynes Was Right, by Paul Krugman, Commentary, NY Times: “The boom, not the slump, is the right time for austerity at the Treasury.” So declared John Maynard Keynes in 1937, even as FDR was about to prove him right by trying to balance the budget too soon, sending the United States economy — which had been steadily recovering up to that point — into a severe recession. Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.

Unfortunately, in late 2010 and early 2011, politicians and policy makers in much of the Western world believed that they knew better, that we should focus on deficits, not jobs, even though our economies had barely begun to recover... And by acting on that anti-Keynesian belief, they ended up proving Keynes right all over again.

In declaring Keynesian economics vindicated ... the real test ... hasn’t come from the half-hearted efforts of the U.S. federal government to boost the economy, which were largely offset by cuts at the state and local levels. It has, instead, come from European nations like Greece and Ireland that had to impose savage fiscal austerity as a condition for receiving emergency loans — and have suffered Depression-level economic slumps, with real GDP in both countries down by double digits.

This wasn’t supposed to happen, according to ... the Republican staff of Congress’s Joint Economic Committee ... report titled “Spend Less, Owe Less, Grow the Economy.” It ridiculed concerns that cutting spending in a slump would worsen that slump, arguing that spending cuts would improve consumer and business confidence, and that this might well lead to faster, not slower, growth.

They should have known better...

Now, you could argue that Greece and Ireland had no choice about imposing austerity ... other than defaulting on their debts and leaving the euro. But another lesson of 2011 was that America did and does have a choice; Washington may be obsessed with the deficit, but financial markets are, if anything, signaling that we should borrow more. ...

The bottom line is that 2011 was a year in which our political elite obsessed over short-term deficits that aren’t actually a problem and, in the process, made the real problem — a depressed economy and mass unemployment — worse.

The good news, such as it is, is that President Obama has finally gone back to fighting against premature austerity — and he seems to be winning the political battle. And one of these years we might actually end up taking Keynes’s advice, which is every bit as valid now as it was 75 years ago.

Occupy: Phase Two

Since the eviction of most of the major Occupy camp sites, the original manifestation of the Occupy movement - sleeping in public spaces, maintaining encampments twenty-four hours a day - is increasingly nonviable.

[T]he lifestyle of urban camping has at times threatened to overshadow our real mission as a movement: challenging corporate power and preeminence in our political discourse.

Trying to deal with everything, we have often failed to accomplish much of anything.

[T]his form of protest no longer advances our primary goals as a popular force for justice.

[T]he time has come for a new strategy.

What might this be? How do we translate our initial surge of energy, fueled by inchoate indignation, into a sustainable movement for broad political reform? How can we promote a national paradigm shift away from greed and towards a love-based economy? So far, we have only identified the problem. We have not yet clearly demonstrated solutions.

One possible way forward would be to focus our efforts on establishing local general assemblies. Rather than seeing the General Assembly as an event that only takes place in a single park in each city, what if every neighborhood had its own general assembly? What might it look like to have workplace general assemblies?

If the movement is to grow and gain momentum, it will need to open its embrace to the whole of the 99% - not just those who have the time, energy and physical stamina to spend their days in frost-bitten parks.

It is no longer enough to be enthusiastic and vigorous. We must be strategic, working alongside the millions of women and men who quietly support us but have no interest in playing fort.

This will mean reaching out to individuals and institutions that seem decidedly non-revolutionary.

Labor unions; civic organizations; all manner of non-profits; faith-based groups; and neighborhood associations - we must reach out to any group that is willing to walk with us as we take the next steps towards greater political transparency, economic justice, and peace.

In this process, we must be willing to be changed. Rather than striking a belligerent pose while our movement falls to pieces, we must be willing to adapt and grow as the movement expands.

by Micah Bales
The Lamb's War

A Petition to Support the Saving American Democracy Amendment

Sen. Bernie Sanders has proposed a constitutional amendment that would overturn the Supreme Court decision in a case called Citizens United vs. FEC.

The Saving American Democracy Amendment states that:

• Corporations are not persons with constitutional rights equal to real people.
• Corporations are subject to regulation by the people.
• Corporations may not make campaign contributions or any election expenditures.
• Congress and states have the power to regulate campaign finances.

Some thoughts about the contradictions of finance capitalism

It is clear that when people talk about 'capitalism' they are often batching many separate ideas into one all encompassing umbrella term. This is a mistake and prevents clarity in discourse. Yet, I often find that differences of opinion stem from semantic misunderstandings caused and exacerbated by imprecise terminology.

In linguistics a portmanteau is a blend of two (or more) words (or morphemes) into one new word. A portmanteau typically combines both sounds and meanings, as in smog which is a blend of the words smoke and fog.

In a sense 'capitalism' may be such a portmanteau in an ideological sense, blending positive ideas -- thrift, industry, productivity, innovation and entrepreneurial spirit while subsuming or embedding negative ideas -- corruption, greed, fraud, competition, cheating and cronyism.

When one hears "Capitalism is the best, most productive system in the world." One may respond with "yes, best for the top 1% of the richest country in the world. Not so good for the non-moneyed billions at the bottom." Capitalism cannot supply the poorest segments of the world with potable water, salt tablets, basic shelter or nutrition. But it is still somehow best?

When one hears the complaint that socialism is inefficient and will lead to stagnation and declining standards of living, one has to look around and wonder. While the richest 1% sees their quality of life skyrocket, again we are left with the images of deprivation, want and suffering worldwide.

Some will argue that "Capitalism hasn't been tried in those places, that they are the preserves of corrupt, self dealing governments that exploit their people for the sake of a crony class." Yet that is a perfect description of our own political-economy racket in which business and government seamlessly blend and blur in the nether realm of lobbying firms, defense contractors, self regulating business, and captured government regulators.

In a recent article in Monthly Review, Richard Peet examines many of these contradictions and concludes that "earlier competitive “liberal capitalism,” opposed to intervention by the mercantilist state, was transformed at the turn of the century into monopolistic “finance capital” which was integrated into a “centralized and privilege-dispensing state.”

He notes the tendency of "corporations heavily involved in production — automobile or steel makers, for example — have become increasingly financial in orientation, diversifying into credit, insurance, real estate, etc." He also notes the "the financialization of everything — meaning control of all areas of the economy by finance. The tremendous economic power of the new entrepreneurial-financial class enables vast influence over the political process."

In Peet's view, capitalism is no longer concerned with the Smithian moral virtues of industry, productivity, probity and thrift. Rather, capitalism has fallen prey to the Casino vices -- recklessness, shortsightedness, indulgence, wantonness, greed and fecklessness. "Financialization has involved increasingly exotic forms of financial instruments and the growth of a shadow-banking system, off the balance sheets of the banks. The repeal of the Glass-Steagall Act in 1999 symbolized the almost complete deregulation of a financial sector that has become complex, opaque, and ungovernable."

Capitalism has morphed into 'finance capitalism' occluding and subsuming the very productive industries that created wealth, growth and prosperity in the first place. Finance capital now preys on productive corporations as items to be broken up, liquidated, financialized, or hedged, ie. bet against.

When you encounter bromides about 'capitalism' and its supposed efficacy, try to identify for yourself if the speaker is portmanteauing the old style capitalism with all its supposed moral virtues into the new modern finance capitalism.

Come see "Inside Job" -- Charles Ferguson's award winning documentary

There is a free showing at the Champaign Public Library on Wednesday, December 14th at 6 pm in Room A+B of the Pavilion.

This Academy Award winning documentary shows clearly and lucidly the origins and the actions that lead to the financial collapse in 2008. It explores in clear and compelling language the workings of the subprime mortgage market, the network of credit default swaps (bets), the failures of the Federal Reserve and Treasury Department to cope with the calamity, the fall of Lehman Brothers, Bear Sterns, AIG Fannie Mae and Freddie Mac, the $700 billion bailout for the Too Big To Fail banks and many more shocking revelations.

Most importantly it helps us understand who is to blame, why the free market ideology is a failure and how it might all have been prevented.

There will be an informal discussion to follow.

There is a study guide for the film available here.

Protest to Occupation: From Capitalist Democracy to Self-Determination

In his recent piece in Political Affairs, Jean Paul Holmes lays out with precision and clarity the insidious influence that corporations have on our supposedly democratic governance.

Lobbying is a constant component of corporate strategy. In 2010, the oil and gas industry spent over 146 million dollars while employing 802 lobbyists, the pharmaceutical industry spent over 244 million dollars while employing 1,612 lobbyists, and finance (insurance and real estate) spent over 475 million dollars while employing 2,563 lobbyists. In comparison, public sector unions, representing the largest non-corporate, politically active institutions in the U.S., spent just over 14 million dollars and had a mere 150 lobbyists.

He further describes the domination of corporate and business elites in terms of total donations to political campaigns -- "Less than one percent of the population made these donations, 81 percent of whom had incomes of more than $100,000 a year. These donations pale in comparison to the amount of money businesses donate directly to candidates' political parties, which comprise near 90 percent of total contributions in any given election."

Through an extensive network of think tanks and institutes, a constant stream of pro-corporate policies are continuously fed to representatives in Congress and Senate. Corporations are "institutions of organized power and are the foundations that allow the capitalist class the constant influence in politics which the Occupy Movement stands against."

The Occupy movement, as Mr. Holmes asserts, is an attempt "to seriously pose capitalism as a question." It isn't simply a matter of producing a list of demands for reforms, although that may be part of what is happening. But rather, he argues, it is time to ask whether we must reconsider the compatibility and internal contradictions of the concept of "capitalist democracy" itself. "The Occupy Movement [has] introduced many to the process of self-determination." Perhaps what we need is not capitalist democracy, but rather "democratic economy" -- self-organizing, self-directing, self-empowering. "This idea can be conceptualized as parallel to the goal of "democracy in the workplace", a phrase the labor movement currently uses in its struggle."

In conclusion, Mr. Holmes states "There can be no real political democracy until there is economic democracy."

Beating the broken-promise dead horse...

Obama campaigned with promises of ending special interest access to legislation, regulations, and contracts.

He said he would not appoint lobbyists to his administration, not allow his appointees to influence issues relating to their prior employers, and not allow his appointees to return as lobbyists attempting to influence his adminstration later on.

But on his first day in office, it became clear that Obama had no intention of fulfilling his campaign promises. He included a loophole in his executive order regarding political appointees, a loophole designed to let him backtrack on his campaign promises. The loophole? A waiver clause that specifically allows former lobbyists to serve in the Obama administration.

That waiver clause has already been used multiple times and in other cases, the Obama administration hasn't even bothered envoking the waiver clause before appointing former lobbysists to positions in his administration.

And on top of that enormous loophole, with the adminstration not even concerned with using it to justify breaking Obama's campaign promises, Obama has also decided that he will allow former lobbyists to serve without the waiver, if they recuse themselves from issues concerning their lobbying interests. But the Obama adminstration has not been forthcoming with a description of its recusal process, nor have they been willing to release any documentation of specific recusals.

...

Clearly the lobbying interests still have their privileged access to the halls of power. Obama had no interest in being a President of the people. He told us what we wanted to hear. He has taken more special interest money than any candidate in history. He is a big business President.

He appointed Jeffrey Immelt, CEO of GE, to his Jobs Council and as chairmain of his Council of Economic Advisers...so again Obama is talking the people's talk, about jobs, but giving the reigns to big corporate interests...so how has that worked out? Immelt is busy moving a bunch of GE jobs from America to China, so that's how he's helping out on Obama's job council....not by creating jobs, but by making the overhead lower for GE...sounds like special interests at play in the heart of the Obama adminstration.

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