As I sit in the sun pondering life, the universe and everything, I wonder where exactly our country is going. Or, where do the people want it to go? Or where does the leadership want it to go? In short, is there a coherent notion of what America should look like in 5 ears, 10 years, etc. You know, all that planning stuff that business schools talk about?
A "Balanced Budget" does not describe America. It simply describes a metric. America is not a balance sheet, it is a people. What is the American objective in terms of the human condition? Is there any notion of an "American Human Condition"?
Orin Hatch seems to feel that the middle class and poor should do more to reduce the nation's debt. I recently was at Montauk Point, NY, where many a vacation home probably cost more to build than a lifetime of middle class wages. Do these folks have the same perception of economic "pain" as the unemployed?
We are in the midst of a so called "jobless recovery". Numbers are recovering, but what about people? Perhaps we are now truly a society of "faceless masses"? Businesses have growing profits, and are finding that they can do so without providing more employment. Hundreds of thousands of families are without wages, but that's OK, because the Dow is on the rise. Numbers trump souls.
If numbers trump souls, has our nation become an entity without a soul?
I find it hard to avoid being cynical.
Al,
ReplyDeleteI don't know much about ECONOMIC THEORY or numbers or any of those things, but i do trust my eyes.
Business/small enterprises are dying everywhere i travel in CONUS.My county and state have more empty business fronts EVERY day.
The news today indicates thousands of new jobs created last month, but where are they and what is the salary?
Do jobs slapping burgers mean a crap here?
The core issues are ignored and we focus on the buzz word issues. The question as you point out is not the poor people, but rather the middle class.
How do we insure a healthy middle class which is the basis of a free capitalist society. With a weak middle all else is meaningless drivel.
I thought that we figured this out in 1932.
jim
Jim: "I don't know much about ECONOMIC THEORY or numbers or any of those things, but i do trust my eyes.
ReplyDeleteBusiness/small enterprises are dying everywhere i travel in CONUS.My county and state have more empty business fronts EVERY day."
Jim, I don't know that much about economic theory either, I just make things up as I go along. It seems to work better than the opposite.
My observations agree with yours about the empty store fronts. There was way too much building during the 2005-06 period so we started the recession with a surplus but the current situation is beginning to get a bit scary. Mostly its small and very small retailers that are going out of business but I wouldn't be surprised if the current trend starts working its way up to the medium-sized businesses and maybe even a few large companies.
"How do we insure a healthy middle class which is the basis of a free capitalist society. With a weak middle all else is meaningless drivel."
The answer is simple, we don't. This isn't really capitalism, call it crony capitalism instead, and we are getting less and less democratic every day.
The current budget debate is bringing up the possibility that the 14th amendment allows the President to do anything necessary to keep the country from defaulting on its debt. We are rapidly heading towards a situation where we have an elected King instead of a President and Congress is meaningless. Someday soon we may not get to elect the King in the name of economic and military security.
"The news today indicates thousands of new jobs created last month, but where are they and what is the salary?"
Jim, the 18k jobs created is so small it is probably a rounding error. The salary report showed that total income fell slightly. The only way the government was able to keep the official unemployment rate at 9.2% was to drop 250k "potential workers" from the employment rolls. My guess is that the effective unemployment rate (unemployment and underemployment combined) is running somewhere in the neighborhood of 13-14%.
If you count the "potential workers" dropped since the beginning of the recession you'd have an unemployment rate of 19-22%. Not as bad as the Great Depression but getting close.
Last thing to consider before I leave you, the potential work force of 18-65 year olds is growing at 125k per month. Adding 18k jobs isn't doing any good.
http://motherjones.com/kevin-drum/2011/07/economy-continues-suck-congress-continues-fiddle
ReplyDeleteWe are ruled by charlatans and cowards. Our economy is in the tank, we know what to do about it, and we're just not going to do it. The charlatans prefer instead to stand by and let people suffer because that's politically useful, while the cowards let them get away with it because it's politically risky to fight back. Ugh indeed.
bb
Pluto: The current budget debate is bringing up the possibility that the 14th amendment allows the President to do anything necessary to keep the country from defaulting on its debt.
ReplyDeleteThe 14th Amendment issue was just an intellectual exercise. However, the fact is, allowing the US to default to any degree, strictly in the name of political ideology, is, in the words of Warren Buffet, "playing Russian Roulette to force another matter". No one really knows what would happen if the debt ceiling isn't raised, but again as Buffet said, "Why play with fire when you don't have to play with fire". What bills would not be paid? Is it mature and reasonable to make draconian threats that will have a drastic impact on the middle class, elderly, veterans and poor just to preserve tax cuts for the most wealthy?
The problem is that we have not been governing for a long time. Laws have been passed, but there has been no serious governance. And the answer to that is to be even more irrational in terms of governance.
"Businesses have growing profits, and are finding that they can do so without providing more employment."
ReplyDelete^^ An enormous problem, perhaps one of the root causes in a jobless recovery. Paul Krugman wrote a great post recently about big companies sitting on cash... Why should we believe they'll do anything else once they get their tax cuts?
"America is not a balance sheet, it is a people. What is the American objective in terms of the human condition? Is there any notion of an "American Human Condition"?"
ReplyDeleteTherein lies your problem. It is a balance sheet. The plutocrats do not consider themselves Americans. They are Internationals. While they may have a US passport, they have no more loyalty to you and yours than they do to some plantation they own stock in in some banana republic.
"The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled."
http://www.theatlantic.com/magazine/print/2011/01/the-rise-of-the-new-global-elite/8343/
There's only one way out of this, and it isn't peaceful.
Here's the thing; America CAN run as a balance sheet, as an oligarchy, as a sort of Rome-with-wage-slaves-instead kind of place. We did that; from about 1870 to about 1940 we were an oligarchy in all but name. An unusual combination of events and people made the following fifty-odd years perhaps the least-unequal in U.S. history.
ReplyDeleteThe people who liked the old way of doing things never actually gave up, and since 1980 they have been extremely effective at changing our society and our economy back to the pre-New Deal conditions, or as far as they can.
I won't pretend that I like that, but I'm not in a two-yacht family. There are lots of people who do, and a lot of them have the money and influence to make that happen. But I won't pretend that the way I like things - which is probably similar to your ideal, Al - is the way is "has" to be.
But I will say this; the U.S. was very lucky in one sense. Our Revolution was possibly the most conservative in post-medieval history. The example of places like Russia, Spain, Germany, and China makes it pretty clear that a really violent social revolution can truly fuck up a society and make totalitarian rule much easier to accomplish.
The U.S. political Right has forgotten that the reason that the cunning old patroon FDR strongarmed them into the New Deal wasn't because he luuuuurved him some poor people. IT was because he had the examples of Russia, Italy, and Germany right in his face to warn him what happens when you get enough people poor enough and desperate enough. He bought three generations of social peace by forcing the plutocrats to make do with one summer house instead of two and a modest tiara instead of a freaking full-on crown and earring twinset. They never forgave him for it; read your George Will or your Krauthammer or your Brooks...
Well, we're going back to 1931. IT's not going to be pleasant for you and me. But that's what's happening, and we might as well get prepared for it.
Chief-
ReplyDeleteI think you hit the nail on the head about FDR. But then, true "Blue Bloods" understand that the masses cannot be eternally subjugated. I remember attending a party in Tarrytown, NY back in the early 60's, where Nelson Rockefeller was among the guests. In a rather spirited discussion of "social programs" with a wealthy neighbor who challenged Rocky's GOP credentials because of all the programs for the disadvantaged he had begun pushing through. Rocky said, more or less, "How much real skin is coming off your back or mine to provide decent care for the people. Believe me, far less than if they had to riot to get our attention. In the long run, it's the right thing to do from a variety of perspectives, to include our selfish ones."
Unfortunately, not to many "long run" thinkers left.
That was exactly the reasoning of the arch-conservative, royalist and somewhat nationalist Realpolitik politician called Bismarck.
ReplyDeleteHe introduced social insurances as a counter-socialist policy and was backed up by (especially catholic) Christian social theology.
Later after WW2, a Conservative-liberal (European "liberal" ~ libertarian) government introduced the social market economy; an economic and social policy grand strategy that turned strikes into rare exceptions and kept the social democrats in check until they moved to the political centre. It lasted till the late 90's when a social-democratic/green coalition followed the Blair fashion and reduced the 'social' in 'social market economy'.
"Germany, and China makes it pretty clear that a really violent social revolution can truly fuck up a society and make totalitarian rule much easier to accomplish."
ReplyDeleteIn the case of Germany, that was no revolution. That was World War I and much, much else.
Same with Russia and Italy; the regime changes were mere symptoms. The states and societies were broken by WWI. Austria-Hungary is the most extreme example.
In fact, it took a lost World War, reparations, multiple left wing and right wing uprisings, a hyper-inflation, a partial occupation, much loss of homeland territory, loss of a small colonial empire, limitation to near-defencelessness, partial demilitarization and years of a global depression to fuck up Germany as much as had happened to Italy a decade earlier, after much less troubles.
I wouldn't exactly blame the final mistake on an impoverished worker class...
Sven: I don't know if you're giving the Spartakist and Navy Mutinies enough credit. They weren't the CAUSE of the fucked-up-ness...but I think they shocked a lot of ordinary-decent-Germans, they put the fear up middle- and upper-class people that the Red Hordes were at the gates. So when the Weimar congeries and the economic hard times combined to make people nostalgic for a strong man they were more inclined to at least acquiesce to Hitler rather than risk the possible return of another Liebknecht and Luxembourg.
ReplyDeleteThe workers weren't to "blame" for anything other than being sick and tired of getting hosed by their bosses' greed and murdered by the commanders' bloodymindness. But they were the cause of a lot of the fascist backlash. Enough people preferred the whip rather than the hammer-and-sickle.
Sadly, I would estimate that about as many people in the Land of the Free feel teh same way; just look at Dick Cheney's approval numbers. If a sufficiently red-white-and-blue strongman arose promising Strength Through Joy and a return to glory of the Christian Worker if we just killed enough Scary Brown People I'll bet they'd be all over it...
You forget that the social democrats were several years in government during the 20's. There was a left-right conflict all the time, but the red hordes theme was largely over after '19. The right wing on the other hand kept causing official trouble till about '23.
ReplyDeleteThe navy mutinied because the sailors didn't want to die for a lost cause in a lost campaign. The black day of the army on 8 August '18 was a greater shock.
Another take on our country's lack of "long run" thinking comes from a former astronaut.
ReplyDelete"Or, where do the people want it to go? Or where does the leadership want it to go? In short, is there a coherent notion of what America should look like in 5 ears, 10 years, etc. You know, all that planning stuff that business schools talk about?"
ReplyDeleteThat really is the key to the future, isn't it?
Let's simplify things and see where it leads us. First, you can take the confused masses out of the question, the people of America have no real idea of where they want the country to go. The Tea Party is evidence of this, a very larger group of people united by their conviction that the country is going in the wrong direction, generally unable to agree on what to do next, funded by extremely wealthy conservatives with their own agenda.
So where does our leadership want to take us? This is the key question in a plutocracy. Let's look at the primary pillars of the plutocracy; Republican leaders, Democratic leaders, and Business leaders.
The Republicans just want to rule. They don't care what or how and long as it is soon, they look to business to support their endeavors and give favors in return. This is not a source for future planning. The Democrats seem to be rallying the Republican view (as evidenced by Obama's seemingly inexplicable shift to the right on the deficit and the lack of an outcry by the Democratic party leadership). Again, this is not useful for future planning.
Business leaders want to maximize their profits and are succeeding on grand scale. But the are still semi-competitive with each other so they are not a source of unified planning. Furthermore, most of their planning is on how to build and exploit markets overseas, not in the indebted over-saturated US markets.
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So apparently we are left with no leadership, no plan, and no future. But I don't think this is true.
ReplyDeleteMy primary reasoning is that nature abhors a vacuum and the current lack of leadership and vision is a very much a vacuum. It WILL be filled somehow but it is beyond the facts and analysis I have at hand to predict how or from where.
My best guess is that we can expect it to appear in the next financial crisis; which will probably occur sometime in the next 3 years and make the last one look like small bump in the road.
Pluto-
ReplyDeleteAre you suggesting a catastrophic change? That the next financial crisis will be so profound that the outcome is not possible to predict, as the impact to the existing social equilibrium will make a course "adjustment" impossible, so a totally new course will be necessary? If so, I tend to agree with you.
There are a variety of economic and social aspects of America that could easily "crash", given the right shove. Once one piece of the house starts to tumble, other pieces will be brought down. When about 30% of the population is "bleeding", I am willing to bet that things will get interesting. Right now, only 10% is bleeding and 30% is bruised. What it will take to raise the bruises to lacerations is anybody's guess.
I'm not sure what I'm suggesting. All I know is that the lack of leadership is going to be solved one way or the other.
ReplyDeleteIt would make sense that a financial crisis caused by the mistakes made in handling the previous financial crisis would cause a catastrophic change but there are so many ways a change could occur I'm not going to limit myself.
Also I think your estimate of the current state of the population is optimistic. I'd say we've got 20% bleeding and another 20-30% that are bruised and fragile. One more serious knock (as I'm predicting will occur in the next 3 years) could have up to 50% of the population bleeding. Something will surely happen by then.
I should also mention that I'm not in favor of catastrophic change, I'd prefer to have planned incremental change because it's a lot easier to fix mistakes in incremental change than it is in catastrophic change. But the current situation is cast in concrete and it doesn't look like anything short of catastrophic change will do the trick.
As much as I wished Obama was a socialist and had let Wall St collapse, I think if he gets re-elected we will muddle through another 4 years of a lost decade like Japan. The world doesn't have anywhere else to go, the EU and China have their own structural issues.
ReplyDeleteSRV:
ReplyDeleteYou're making my point for me. We are now in the odd position where Japan is likely to be the safest and fastest growing developed nation for the next few years. And they are going to be very inwardly focused as they try to rebuild after the earthquake. Their government seems to be focused on taking advantage of the earthquake to do things in new and better ways which is probably the best news the Japanese have had for the last 30 years.
Meanwhile the Europeans are quite obviously still skirting the edges of total disaster and will continue to do so until they either work out how to let Greece and other similar countries fail or they fall. Not encouraging.
Meanwhile China is in its own special brand of Hell. They are in the late stages of a bubble and are trying to figure out how to deflate it without popping it. Good luck with that one, particularly because the Chinese government only has large blunt instruments at its control. Frankly, its a question of when and how bad the bubble will pop rather than whether it can be averted.
The US is second in stability to Japan but we've left such gaping holes in our treatment of the last bubble (see below) that we are inviting disaster again. Again, the question is only how long it will take, not whether it can be avoided.
Issues in the US economy:
- Persistent high unemployment combined with modest government efforts to hide/ignore the problem.
- A flat refusal to deal with the housing crisis which has remained the coal mine burning underground that keeps the rest of the economy tied down.
- Not only did the US government reward the too-big-to-fail banks but they penalized the banks that were small enough to fail. More and more control of the economy is in the hands of fewer and greedier people who very firmly believe the Federal government will bail them out if they get into trouble.
- Derivatives and sub-prime mortgage practices were left unchanged. Sub-primes have gotten somewhat better but the use of derivatives has grown dramatically. The problem with derivatives is that they are totally invisible to everybody until the moment that a bank CEO suddenly discovers that he accidentally insured the European banks against Greek government debt default.
The final problem is that the financial world is even more interconnected than it was a few years ago. If any one situation fails it WILL pull down the rest very quickly.
So we are in the position of nuclear power plant operator where the plant is running okay but:
1. Has all of its major components that are highly interconnected with each other
2. All of the major components require that the other major components to continue working as designed
3. All of the major components are designed to fail sometime soon.
Is there a problem with this picture?
Pluto: And you left out #4: The control room is staffed with a deeply divided group of nuclear engineers. About half of them are utterly clueless and ignorant and will do and believe what best suits the ignorant, selfish beliefs. One of the other two quarters is hopelessly adrift with no real ideas beyond "Let's try and keep things under control". But the real problem is that the last quarter is completely insane in that they believe only what they want to believe and reject anything else regardless of its physical reality. They are convinced that it's more important to pull the control rods rather than worry about a meltdown because control rods are made by the government and Government is Bad.
ReplyDeleteMake the picture any darker?
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