August 31, 2009
August 29, 2009
August 27, 2009
August 23, 2009
First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America.
Second, it shows that Wall Street’s bad habits — above all, the system of compensation that helped cause the financial crisis — have not gone away.
Third, it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely……
Such growth would be fine if financialization really delivered on its promises — if financial firms made money by directing capital to its most productive uses, by developing innovative ways to spread and reduce risk. But can anyone, at this point, make those claims with a straight face? Financial firms, we now know, directed vast quantities of capital into the construction of unsellable houses and empty shopping malls. They increased risk rather than reducing it, and concentrated risk rather than spreading it. In effect, the industry was selling dangerous patent medicine to gullible consumers………
What’s clear is that Wall Street in general, Goldman very much included, benefited hugely from the government’s provision of a financial backstop — an assurance that it will rescue major financial players whenever things go wrong.
You can argue that such rescues are necessary if we’re to avoid a replay of the Great Depression. In fact, I agree. But the result is that the financial system’s liabilities are now backed by an implicit government guarantee.
So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government……
Just to be clear: the economic situation remains terrible, indeed worse than almost anyone thought possible not long ago. The nation has lost 6.7 million jobs since the recession began. Once you take into account the need to find employment for a growing working-age population, we’re probably around nine million jobs short of where we should be…….
But in the 1930s the trend lines just kept heading down. This time, the plunge appears to be ending after just one terrible year…..
So what saved us from a full replay of the Great Depression? The answer, almost surely, lies in the very different role played by government……..
In addition to having this “automatic” stabilizing effect, the government has stepped in to rescue the financial sector. You can argue (and I would) that the bailouts of financial firms could and should have been handled better, that taxpayers have paid too much and received too little. Yet it’s possible to be dissatisfied, even angry, about the way the financial bailouts have worked while acknowledging that without these bailouts things would have been much worse.
The point is that this time, unlike in the 1930s, the government didn’t take a hands-off attitude while much of the banking system collapsed. And that’s another reason we’re not living through Great Depression II…..
I’m still very worried about the economy. There’s still, I fear, a substantial chance that unemployment will remain high for a very long time. But we appear to have averted the worst: utter catastrophe no longer seems likely.
August 21, 2009
The doors and windows of consciousness are shut temporarily; they remain undisturbed by the noise and struggle with which the underworld of our functional organs keeps working for and against one another; a little stillness, a little tabula rasa [blank slate] of the consciousness, so that there will again be room for something new, above all, for the nobler functions and officials, for ruling, thinking ahead, determining what to do (for our organism is arranged as an oligarchy)—that is, as I said, the use of active forgetfulness, a porter at the door, so to speak, a custodian of psychic order, quiet, etiquette. From that we can see at once how, if forgetfulness were not present, there could be no happiness, no cheerfulness, no hoping, no pride, no present. The man in whom this repression apparatus is harmed and not working properly we can compare to a dyspeptic (and not just compare)—he is “finished” with nothing. . .
August 17, 2009
1. As everyone knows, the elites feel no such scruples or moral obligations. Every bank, every corporation, feels it has an absolute right to be bailed out by taxpayer money, but that it does not incur any social obligations in return. It is entitled to continue with predatory, sociopathic, destructive behavior, both while it is a direct ward of the state and of course after it has gone through the charade of “paying back” a small portion of the public money it stole and continues to steal. (The TARP, which some of them have “paid back” with such fanfare, is only a small portion of the loot conveyance.)
The government approves of this practice.
2. Meanwhile the system has been set up to encourage and basically require that the individual become a “consumer” and go into debt. The brainwashing starts in school and continues all our lives, as the public media is for all intents and purposes a shrieking advertising agency. That goes to the brainwashing which drives people into so-called “voluntary” consumer behavior.
3. More importantly, much of the debt load is not voluntary by any measure. The system is set up to be as high-maintenance as possible. It’s set up to require you drive a car. It’s set up to require a college “education”, which for most is just an astronomically expensive careerist hoop to jump through. It’s set up to drive housing and land prices out of reach other than through debt indenture. It requires a panoply of electronic devices in order to be socially functional: PC with internet connection, cell phone, perhaps a blackberry or twitter or some other such implements. Since economic concentration pressures make it next to impossible to function as a low-overhead small business, the would-be entrepreneur is forced to go into debt to capitalize his business attempt.
All of this is intended to impose social control.
Anyone who understands this whole dynamic understands how the individual has been coerced into it, and how he is not morally responsible for these system debts.
(Of course we’re not talking about borrowing money from a friend in an emergency and then refusing to pay him back. That always has been and always will be despicable.)
So these kinds of defaults are a form of civil disobedience, monkeywrenching. (Perhaps many of the individuals involved don’t really deserve to be called rebels are far as their intent goes. I don’t doubt many of them were selfish enough, the type who willingly binged beyond their means. It’s unfortunate that many of them can get a moral free ride if decent involuntary defaulters really proliferate. Or if such decent people are smeared by association with the irresponsible. But what’s important here is the overall structural result.)
There’s a really good piece by Michael Hudson from last February, Bubble Economy 2.0.
I still think it’s the best single piece I’ve read on this crisis.
The part that’s relevant for this discussion is how Hudson describes talking to a banker who had an epiphany:
The officials drawn from Wall Street who now control of the Treasury and Federal Reserve repeat the right-wing Big Lie: Poor “subprime families” have brought the system down, exploiting the rich by trying to ape their betters and live beyond their means. Taking out subprime loans and not revealing their actual ability to pay, the NINJA poor (no income, no job, no audit) signed up to obtain “liars’ loans” as no-documentation Alt-A loans are called in the financial junk-paper trade.
I learned the reality a few years ago in London, talking to a commercial banker. “We’ve had an intellectual breakthrough,” he said. “It’s changed our credit philosophy.”
“What is it?” I asked, imagining that he was about to come out with yet a new magical mathematics formula?
“The poor are honest,” he said, accompanying his words with his jaw dropping open as if to say, “Who would have guessed?”
The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal sacrifice and what today’s neoliberal Chicago School language would call uneconomic behavior. Unlike Donald Trump, they are less likely to walk away from their homes when market prices sink below the mortgage level. This sociological gullibility does not make economic sense, but reflects a group morality that has made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank. So it’s not the “lying poor.” It’s the banksters’ fault after all!
In other words the poor are saps to submit to a practice and a morality which the elite never believed in and would never practice, but which they do seek to promulgate among the masses.
It’s a modern version of the ancient pious lie.
August 14, 2009
August 12, 2009
August 10, 2009
August 7, 2009
In recent days a series of news reports has provided us with the smoking gun, that on health care reform the Obama administration is not feckless and incompetent, but consciously and systematically acting against the public interest. Together these reports paint the picture of a secret deal in the White House with one feudal interest, while at the same time another deal with another interest is cut on Capitol Hill. Along the way there has been much prestidigitation and misdirection, with corporate media assistance. The result is intended to be for the mutual benefit of the rackets and of corrupt politicians, all the lucre sucked from the blood of the people.
First we have the secret administration deal with Big Drugs. As reported in the NYT, the administration and Senate industry flunkey Max Baucus have promised the drug industry that “reform” will not involve government negotiating the price of medication, will not encompass inexpensive Canadian imports, and will “block Congress” from any attempt to force the industry to enact savings of greater than $80 billion over ten years.
[Edit 8/8: There is now a report that the administration is backpedalling from any such deal. They’re at least embarrassed enough to claim so, but as from the start their words are muddled and uncertain.]
As head drug lobbyist Billy Tauzin put it, “$80 billion is the max, no more or less. Adding other stuff changes the deal.” According to the report, Tauzin, hearing of moves in Congress to impose cost savings beyond those agreed upon in the secret deal, demanded that the administration publicize it, and the Obamans complied.
[You may remember Tauzin as the Louisiana senator who spearheaded the Bush Medicare drug “benefit” which redistributed vast amounts of loot from the taxpayers to the big drug companies. Here too government was not allowed to negotiate rates or import from Canada.
In a particularly brazen example of a revolving-door deferred bribe, Tauzin left office shortly after to immediately take up the fat job of industry lobbying chief.
It’s rich how Obama came into office proclaiming with great fanfare how his administration would be off-limits to lobbyists. That was the very first promise revealed to be a lie.]
In an example of corporate media sycophancy, the article takes for granted that Obama still wants real reform, when the entire piece is dispositive evidence that “reform” is a sham. Here the administration is a principal in a conspiracy against the American people.
The piece quotes Arizona Democrat Raul Grijalva, apparently displeased about the conspiracy but resigned to it: it puts dissenters in the “untenable position of trying to scuttle it”. Why would this kind of congressional action, scuttling the administration’s treasonous deal, be “untenable”, but the “Blue Dog” Democrats’ openly anti-public interest obstructionism and corporate welfarism isn’t considered untenable at all, or at least they’re not shy about trying it?
The article implies that Obama favors the drug interest over the insurance interest. His rhetoric has been friendly to the former, sometimes harder on the latter. But according to this BusinessWeek article, they have their own plan of attack, involving those same dog dems.
The feudal insurance racket’s goal is to block all real reform, especially any robust public option, and go through the charade of potemkin cost-cutting commitments and a sham “concession” on no longer excluding pre-existing conditions from coverage.
Their strategy is to get the dog dems to scuttle reform for them. These corrupt curs will either block a public option or gut it. At the same time the new coverage extended to the newly conscripted/insured (that sham concession) will actually have a much-reduced reimbursement rate, from an average of 76% (the original reform goal) to 65%. So they will have to “cover” you, but can gut the coverage even as they charge top dollar for it.
(At the same time these dogs are conspiring with lobbyists against the people, the administration either uses Republican opposition or is distracted by it. Thus even if, as according to the NYT article, Obama really is down on the insurance companies (which I don’t believe), the result is the same; they just make their deal elsewhere.)
In some particularly nauseating passages of the BusWeek piece, leading Dem mongrels like Jim Matheson and Mike Ross are quoted openly declaring their prostitution to UnitedHealth (a particularly aggressive lobbyist), while Virginia senator Mark Warner warns against reform as a “Trojan horse for single-payer”.
(This is a standard talking point allegedly against the public plan: that if you offer a robust public option people will opt for it. I confess that after seeing this argument a hundred times I still say the same thing I said the first time: so? Good!
That would be very strong evidence of what the “free market” wants, no? But of course this isn’t about any market or freedom. This is only about a rigged racket, and the preservation of rent-seeking privilege. It’s telling that even the MSM, always eager to give “both sides” of any story, no matter how much truth and justice resides with only one side, and always eager to give pro-corporate coverage, could still never come up with an argument against universal Medicare other than the unvarnished ugly truth that this could be bad only for the handful of insurance criminals. This speaks eloquently of the intellectual and moral bankruptcy of the anti-reform position.
This bankruptcy is also evident in the fact that, in spite of how Obama has disgracefully left open a complete public message vacuum for so many months, only now is the enemy finally starting to get some traction with its lies about “cost” and “choice” and “rationing”.)
But the media is still plugging away, whatever pathetic depths it must sink to. The nadir for a supposedly respectable newspaper has to be the NYT’s recent fluff piece on parasite lobbyist Karen Ignagni. Naked Capitalism’s Yves Smith went so far as to declare it “clearly a PR plant”.
All this really is sickening. This is what I feared and suspected all along, the nightmare scenario where not only would there be no reform, but the feudal parasite would end up further entrenched, with a “universal mandate” to provide a conscript market.
(This mandate, under these circumstances, would clearly be unconstitutional. The government cannot constitutionally force you to buy a private product as the price of merely being allowed to exist as a citizen.
There’s clearly no analogy with auto insurance, which is contingent upon the choice to own a car, or with Soc Sec/Medicare which are of course public programs.
The closest comparison is a poll tax.)
Health care is a social right. If this isn’t a core reason for having society in the first place, what is?
And if we’re to have Hobbesian anarchy, why not be honest and go all the way with it? Then men would rage anarchically against wealth and property, neither of which could exist except within society.
I would make the modest suggestion that the uninsured (of whom I have intermittently been one), before they accept the corporate media accusation that they are “free riders”, consider the monumental free riding of this purely parasitic private insurance “industry”, and consider how the political and media class are completely corrupted by and beholden to this parasite.
Having considered this institutionalized trillion dollar free ride, the uninsured should absolve themselves of any remorse they may have been inclined to feel over the one penny’s worth of their own “free ride”, and affirmatively declare that we refuse to buy such feudal policies at gunpoint, and we will indeed free ride if that’s the only way this system allows us to exercise our human right to decent health care. (And do you really believe that those alleged “subsidies” for those who can’t afford this extortion are ever going to materialize?)
Citizenship should say we’re willing to pay reasonable taxes for a single-payer system, or at the very least a strong public plan (i.e. a full extension of Medicare), but that we are NOT willing to pay extortion rates to prop up a criminal gang and the despicable politicians it has bought off.
That’s when civil disobedience must do the talking.