Notes From The Rust Belt

Fish or Cut Bait

2010-03-02T10:07:00.001-05:00

On the floor of the U.S. Senate yesterday, "Senator" Jon Kyl said the following:

So I wrote him these choice words and sent them to him on his Senate website:

Senator Kyl,

Yesterday on the floor of the Senate, you claimed that unemployment and COBRA benefits are a disincentive to work.

You, sir, insulted me personally with those words. I demand an apology.

I moved to Michigan in 2007 for a good paying job. I have never been unemployed in my life. In 2009 I was laid off. I have been searching for work for more than a year. As you may be aware, assuming you can read and you care, the unemployment rate in Michigan in more than 15%. I live in the Detroit area, where the unemployment rate is closer to 50%. For every job there are more than five applicants.

I get $330 a week on unemployment. This is the most that a person on unemployment in Michigan can receive. Fortunately I live with someone who is willing to support me. How in the world could anyone live on $330 a week?? What kind of fool are you to assert otherwise? What have any of you people done to keep and build good jobs in this country?? You sit back while all the good jobs leave the US, then blame those left behind that they can't find work. How pathetic.

You Republicans are treading a thin line. Go right ahead with your plans and foolish talk. If you think the tea party people are upset, go ahead and mess with those on the very bottom. We can go no lower. How about if all of us unemployed losers show up at your office for a little conversation? Maybe then we can impress upon you just how foolish you are.

Or better yet, maybe us unemployed folks will visit your home state and work to see you unemployed.

You are a Senator in name only. As you may be aware, Senator means "old man" or elder, the assumption being that an older man is wise. You are a stupid old man. You will reap the whirlwind if you keep this up.

If this is where the Republicans want to go, there will be consequences. Enough is enough.

Kabuki Dance

2010-01-27T10:57:00.000-05:00

Leave it to The Daily Show to once again produce the most cogent argument for regulation in the face of the Wall St. CEO onslaught. In this video Elizabeth Warren, chairman of the Congressional Oversight Committee, argues forcefully that we are on the verge of losing the middle class in this country. As I have stated elsewhere on this blog, I contend that this effort has been purposeful - that the elites in this country have always benefited from the diminution of the middle class. This worldview has been extended throughout the rest of the world via the "global economy" meme that serves the same purpose elsewhere.

The Daily Show With Jon Stewart

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Elizabeth Warren

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Shadow Elite

2010-01-21T16:05:00.000-05:00

I found these two pieces that expand on Professor Wedel's ideas from her book, Shadow Elite:

Turning Down the Gas On The Stove

2010-01-21T15:35:00.004-05:00

Note: Professor Janine Wedel recently published a book Shadow Elite, wherein she discusses concerns regarding the overweening control of American power in the hands of an elite few. Those of you who have read this blog are aware of my parallel concerns. She published these three articles on Huffington Post:

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Shadow Elite': Do You Know Whose Agenda You're Being Sold?

For The Shadow Elite Failure Often Guarantees Future Rewards

Is the Government In Charge, Or Is It The Shadow Elite?

I wrote the following letter to her in response to the first article, which is her latest one.

Dear Professor Wedel,

While I have not read your book yet, I am quite familiar with many of the notions you have advanced recently on Huffington Post. I share your legitimate concerns about the quite obvious accumulation of power by a very small group of people in this country and elsewhere. My initial thoughts began to jell some years ago while working within the corporate world. The recent work of Kevin Phillips, particularly his excellent book, Wealth and Democracy, advances the premise that wealth in the United States has been closely held by the very rich since before the inception of the nation, and continues to this day. Phillips argues convincingly that this concentration of wealth in the hands of a few stands in tension to democracy here and elsewhere.

In a similar vein, I've written about the formal structures that I contend are the driving forces behind this - the publicly held, for profit corporation. You can read my series of articles on this subject here:

The Structures That Divide Us
The Mess of 2009
The Mess of 2009 Part 2
The Mess of 2009 Part 3

That said, I have a couple of comments I'd like you to consider:

1) "Flexians" - My gut reaction to this term is negative. First of all, it sounds akin to "Martian" or some other alien life form. I think the term is far to pejorative, and works toward an unnecessary demonization of these people. I understand the convenience of shorthand nicknames like this; however, I think it allows your otherwise great critique to be hijacked by more simple minds whose thinking becomes entirely too coalesced around the reductionism in the nickname.
2) Shadow Elite - I'm not sure if you've read all the comments on your post today (1/21) on Huffington Post, but here are a few that illustrate my second concern here:

Post 1
"From the look of this article the author seems afraid to label the root problem, The Rockefeller's and the Bilderberg group. I hope she doesn't think she has discovered something new, because this is old news."

Post 2
Nice to see someone finally waking up the public to the matrix around us.

I encourage people to look up and research:
Agenda 21
Bilderburg group
Trilateral Commission -- Thier goal is to destroy the US, political, economically and socially.
Council of Foriegn Relations
RAND corporation
Rothchilds
Rockerfellers
Bank of England
North American Union
NorthCOM
The Club of Rome
Committe of 300
Georgia Guidestones

Post 3
you've pretty much covered them all, bravo

Some sources for knowledge:

Bill Still: The money masters
Alex Jones
David Icke
Webster Tarpley
...and a host of others

a few good sites:
infowars.com
prisonplanet.com
consciousmedia network.com
davidicke.com
youtube.com (here you can search so many sources)
..the list goes on and on

The info is out there, intelligent, well documented and honest .
Most people will be shocked into cognitive dissonance

...but those who still have a few brain cells left not polluted by current media , entertainment and cultural obfuscation....will be enlightened

Post 4
Yup ... good data in these few threads.

Nothing happens by coincidence. There are those who will tell you not to look behind the curtain ... but time is getting late. Those voices who say there are no conspiracies have a stake is all.

... and yes, those who are new to this data will be shocked BUT they will also see WHY things have gone as they have these last many decades. Go ahead ... Look behind the curtain.

No one challenges these ideas on Huffington Post. Suddenly those of us who are attempting a rational examination of things have fallen through the rabbit hole into conspiracy hell. I spent some time this morning reading about the Georgia Stones, and their obvious connection with the New World Order....yikes!

Professor, I urge you to consider some alternate means of expressing what I consider very legitimate concerns. In my mind there are plenty of obvious, unambiguous, and overt examples of elites carrying out really evil schemes. I find no need to delve into other more nefarious and occult conspiracy notions. I think you should be aware of what you're tapping into, and try to do a better job differentiating yourself from those on the fringe who are rushing in to supposedly "complete" the "partial" picture you've painted, at least as far as they're concerned.

I believe there is a real danger in fanning these fires, a danger I wrestle with personally. If you conjure up this picture of this shadowy, very powerful group of people, who seem to have massive control over huge pieces of US and world culture, you run a huge risk. There are only a handful of responses to such a nebulous yet powerful threat.

One is a violent response on a scale large enough to bring such a behemoth to its knees. We have more than enough guns in this country in the hands of people who would love to use them. These folks are now showing up in numbers at the various "tea party" events, locked and loaded, and threatening to use their guns unless they get their way, say in the next election. The notion of a shadow elite feeds their irrational fears about a New World Order driven by some Evil Masonic/Illuminati cabal. As the comments above illustrate, for these folks, you haven't gone far enough.

A second response is powerlessness. The whole thing is way to big to deal with. Impotence can easily swing around into an extreme reaction in a time stress.

A third response, which I believe is your intent, is to begin some nonviolent, rational response to this inordinate accumulation of power by a few. I favor such an effort. Such a dialogue, however, must be held in a context that manages to resist both responses above.

I urge you to reconsider some of your rhetoric. I fear you're unwittingly pouring gasoline onto the wrong fires. I would like to propose the development of some forum where we can begin to actively discuss just how we can wrest this real power from these folks.

Lemmings

2009-12-21T09:03:00.004-05:00

About a month ago, reports emerged about NBA games being fixed. Former referee Tom Donaghy, speaking on 60 Minutes, described in detail the manner in which he could predict the outcome of NBA games for his own gambling purposes. You can view the interviews here and here. In his book, "Blowing The Whistle," which ended up not being published, Donaghy said the following about famed NBA coach Dick Bavetta:

That very first time Jack and I bet on an NBA game, Dick [Bavetta] was on the court. The team we picked lost the game, but it covered the large point spread and that’s how we won the money. Because of the matchup that night, I had some notion of who might win the game, but that’s not why I was confident enough to pull the trigger and pick the other team. The real reason I picked the losing team was that I was just about certain they would cover the spread, no matter how badly they played. That is where Dick Bavetta comes into the picture.

From my earliest involvement with Bavetta, I learned that he likes to keep games close, and that when a team gets down by double-digit points, he helps the players save face. He accomplishes this act of mercy by quietly, and frequently, blowing the whistle on the team that’s having the better night. Team fouls suddenly become one-sided between the contestants, and the score begins to tighten up. That’s the way Dick Bavetta referees a game — and everyone in the league knew it.

[...]

Studying under Dick Bavetta for 13 years was like pursuing a graduate degree in advanced game manipulation. He knew how to marshal the tempo and tone of a game better than any referee in the league, by far. He also knew how to take subtle — and not so subtle — cues from the NBA front office and extend a playoff series or, worse yet, change the complexion of that series.

As a long time NBA fan, frankly I wasn't surprised by these revelations. I saw far too many games where it was clear the one team received an inordinate number of fouls in situations where it was also clear the both teams were doing things worthy of fouls. The things related above about Bavetta were also not difficult to see without knowing the facts above. Often a game would cruise along, sans fouls, until some point near the end of the game, when things would mysteriously grind to a near halt. The revelations that all of this was conscious on the part of the referees for various reasons shocked me, but didn't surprise me.

In a parallel realm, but with far more dire consequences, it should be increasingly clear to even casual observers that we Americans are Officially Fucked. Quite frankly, I've been too depressed to even write anything recently. The effort seems hopeless on so many levels. As we've watched the healthcare "debate" in DC, it should be obvious to anyone with a modicum of consciousness that the game is fixed. We saw, as an example, 30 Democratic Senators vote against an amendment to the healthcare bill that would have allowed Americans to purchase prescription drugs imported from Canada and elsewhere. We were told, point blank, that this happened due to White House pressure to make sure the agreement Obama made with Big Pharma didn't fall apart.

So our Senators voted against our interests. Meanwhile, they've created a legislative Frankenstein healthcare bill that won't go into force for four or more years. 2014. W.T.F......

Then last night I saw this piece on 60 Minutes:

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The population of Wilmington is about 12,000; the 60 Minutes report says they lost 10,000 jobs. 10,000. One can assume that the job losses, largely the result of DHL's decision to abandon its US market in 2008, affected a much larger population than Wilmington; but basically this move by DHL eliminated almost all the jobs in this small midwestern town.

As I watched this piece, I felt ill. As I am currently unemployed, it struck me as to how close such an eventuality is for me, and millions of other Americans. Fortunately my girlfriend is able to support us for now. Obviously, though, nothing is guaranteed. I live in the Detroit area, where the unemployment rate in the city proper approaches 50%. And none of this takes into account the mammoth psychological toll this places upon me and others. This year marks the first Christmas in my adult life I've been unemployed. I am simply not used to this. None of us are.

Are we all lemmings? Is the fact that our individual and collective interests are being sold out, piece by piece, by our own elected officials, something we are unable or unwilling to do anything about? Is the obvious fact that our own government is under the control of corporate interests, lobbyists hired by giant companies willing to pay or do anything to advance their own interests, something we all simply choose to ignore?

I've argued with friends about the conspiratorial nature of all this. I think that corporations are purposefully working to bring about the demise of the middle class in this country. And my opinion is shared now by even former U.S. Senators:

Who is against jobs in the United States? The big banks, Wall Street, the Council on Foreign Relations, the Business Roundtable, the United States Chamber of Commerce, the National Retail Federation, Corporate America, the President of the United States, Congress of the United States.

Stop for a moment and reflect on this statement. A former U.S. Senator claims that the President of the United States, Barack H. Obama, who I campaigned for, who campaigned on a promise of "change we can believe in", is against jobs. He then presents evidence of this fact. Very much like former NBA referee Donaghy, he points out what has been obvious for a long time to anyone wishing to see it.

Corporations bray about the fact the good management all gets down to a matter of results. Fine. If we look at the results of their management of company after company, particularly in the case of for-profit, publicly held, multinational corporations, is it difficult to see the results? When corporations move their factories from this country to elsewhere, with the result being entire towns, counties, states falling into massive unemployment with little hope of jobs returning at any time soon, while their stock price goes through the roof, what rational person can deny that this result isn't purposeful? When we see the stock price of insurance companies reach a 50-year high after the Senate announces its healthcare plan, do we really need any help to see who benefits from all this?

As I observe all this, it appears increasingly clear - which I hope is merely my fear - that no substantive change will take place here through civil means. The fix appears to be in. While the details of the conclusion of the game may be left somewhat to chance, like the NBA games alluded to above, the conclusion, the outcome, has already be decided. Can we muster any collective strength as our national hour of darkness increases to do anything that will right our ship? Or is our democratic experiment already over, and those of us who thought otherwise are fools? Are we all such lemmings, or will any consciousness on these vital areas awaken us to the point where we can wrest our destiny from the corporate overlords and leave a world for our children that is in some way better than the world we received?

The Obvious

2009-12-21T08:58:00.003-05:00

Former Senator Fritz Hollings posted the following on Huffington Post. His brutal honesty makes the point I've been arguing about for some time. I quote his article in its entirety here without comment. More to come:

Who is against jobs in the United States? The big banks, Wall Street, the Council on Foreign Relations, the Business Roundtable, the United States Chamber of Commerce, the National Retail Federation, Corporate America, the President of the United States, Congress of the United States. Everyone is crying for jobs, but no one seems to understand why there aren't any. And the reason for those opposing jobs is money.

Beginning in 1973, big banks made most of their profit outside of the United States. Industries off-shoring, investing, banks financing the investments, transfer fees, fees and interest on the loans made for bigger profits. Long since, the big banks under the leadership of David Rockefeller have led the way to off-shore and make a bigger profit. Goldman Sachs, AIG, Citicorp and Wall Street, conspiring for a bailout and now using it for bonuses, make more money from the off-shored operations.

The Council on Foreign Relations ought to be renamed the Council on Making Money. A recent PEW poll reported fully 85% of Americans said that protecting United States jobs should be a top foreign policy priority. But only 21% of the Council on Foreign Relations agrees. Financial interests organized the Business Roundtable to continue off-shore investment and profit. The local Chamber is for Main Street America, but Tom Donahue and the United States Chamber have sold out to the financial interests and oppose jobs and producing in the United States. Thirty years ago, hundreds of thousands of Arrow shirts produced in China were a best seller in the United States. But at Christmastime, the Chinese supply ran short and the retail stores had to order the same shirt from New Jersey. They made 20% less profit on the New Jersey shirt. Retailers are all for profit from imports and against domestic production and jobs in America.

Corporate America would fight any initiative by the President, the Congress, or the government to create jobs in the United States. That is, production that faces competition offshore. In globalization, U. S. production can't make a profit, can't survive. Its competition will off-shore the same article for a lesser price, putting you out of business. Moreover, Corporate America doesn't have to bother with labor in China. The China government controls labor and you don't have to worry about a work stoppage or minimum wage. All they have is a maximum wage.

And Corporate America doesn't have to worry with clean air and clean water or the environment in China. Nor does it have to worry with OSHA and all of its safety rules. Many times the factory building is furnished and you don't have to worry with capital costs. If you make a profit, you can just reinvest it in an additional operation and not have to pay any U. S. income tax. If the operation fails, walk away with no legacy costs. Corporate America bitterly opposes its government protecting and strengthening the U. S. economy because producing again in America will put the executives back to work. They can send a Jaycee to China to watch the quality control daily and sit on the 32nd floor on Sixth Avenue with the internet, keeping check, and, leaving early for a massage and drinks. With production in China they don't have to work.

As Commander-in-Chief, the President dithered for months over the number of troops. But he can't equip the troops except for the favor of a foreign country. The War Production Act of 1950 requires the President to make sure that we can produce in- country those articles necessary for our national defense. Enforcing this law would limit the campaign contributions. Under Section 201 of the trade laws, the President is supposed to take action, like impose tariffs or quotas, when a certain production is endangered. Not only endangered, our automobile production has been bankrupted. But all the President does is give Detroit bailout welfare. The President doesn't want to limit the campaign contributions.

The same with Congress. Senator Byron Dorgan of North Dakota long ago tried to allocate the tax incentive for foreign jobs and production to domestic jobs and production. The Business Roundtable and the U. S. Chamber fought it like a tiger and killed it.

As the President said in his West Point talk, there is fierce competition in international trade and globalization. All countries move to protect and build their economies while the United States goes out of business. The one advantage that the U.S. has is its richest market in the world. It is fast becoming the poorest market and the U.S. is losing any clout to maintain a strong economy.

The economy is in the hands of Summers, Bernanke and Geithner. Campaign contributions are in the hands of David Axelrod and Rahm Emanuel. The poor President is smart, diligent and working his head off campaigning. But he is inexperienced and not governing, and the Congress is in a Mexican standoff over an archaic filibuster rule that reveres democracy by the minority.

Of course, the media, which knows this and keeps it top secret, is owned by big business.

If I don't meet you in the breadline, my children will.

Merry Christmas!

What He Said

2009-11-19T08:53:00.002-05:00

Finally there are a few sane voices regarding the need for a different economic direction! In this clip, Representative Peter DeFazio brings up the obvious:

Visit msnbc.com for Breaking News, World News, and News about the Economy

Yes, Timmy Geithner and Larry Summers DO need to go. I don't think this even begins to remedy the myriad problems with the economy; perhaps this would only be symbolic. After all, for every well-known name like either Geithner or Summers, there is a long list of other people, some of whom probably having even more influence than either of these fools. Clearly, as the daily Dow Jones average shows when compared with the unemployment figures, these people work for Wall Street, not Main Street.

That said, their removal will have little effect on the continual slide of the middle class in this country toward its seemingly inevitable demise. I sincerely hope that some cataclysmic event isn't necessary to produce some fundamental realignment in the United States. The prospects, however, do not look good....

We're All Slaves Now

2009-10-28T09:18:00.006-04:00

An article on Talking Points Memo by blogger Saladin reflects similar thinking to mine. There is a comment posted by one commenter named peoplechoose that discusses the intentionality of this rise in debt.

I agree with the writer that this entire debt mess is intentional. I think it serves several purposes.

First of all, the vast accumulation of debt in this country has, in fact, already caused the demise of the middle class. Most people who call themselves "middle class" don't actually own much at all. Who do you know that actually owns their house and their car? In Michael Moore's recent Capitalism, A Love Story movie, he recounts how his father, working for AC Delco in Flint, MI, owned is house outright by the time Moore was four, and bought a new car every three years. What person in our time, working on stagnant wages that haven't gone up in more than a decade, can do that?

The student loan factor that Saladin discusses here is a key to this slide into servitude. By training young people that huge amounts of debt is the norm, the stage is set for successive moves on the debt game board. Once a young person is convinced that six figure debt is inevitable, even larger amounts of debt seem normal.

Secondly, I argue that this effort to normalize debt is intentional. The intention of this effort is manifold, but should be obvious. If we ask, who benefits from this huge mountain of debt, the answer is simple: for profit, publicly held corporations. This accumulation of debt serves their need for ever-rising stock prices. Additionally, if the middle class in this country collapses, then at some point in the future, corporations can re-sell us all this cool stuff again. First convince the Chinese they want to be like the US. We buy all their cool, cheap stuff and go into untold amounts of debt doing so. Our economy collapses under the weight while China prospers. Once we fall, these same corporations can flip the whole mess around....

Finally, this effort is profoundly undemocratic. As Kevin Phillips argued in his book, Wealth and Democracy, the tension between accumulation of vast amounts of wealth and the democratic impulse dates back before the founding of this Republic. The few who have accumulated these vast amounts of money have no real interest in democracy. An indentured body of citizens serves them well.

Please read this series of articles:

The Structures That Divide Us
The Mess of 2009, Part 1
The Mess of 2009, Part 2
The Mess of 2009, Part 3

Obama Campaign Promises

2009-10-10T11:49:00.004-04:00

So now the status quo forces begin to talk about the Left - again - as if we've lost our minds. Chris Matthews recently said this in a conversation on MSNBC with Andrea Mitchell. (I'm sure that she and her husband never talk politics, and it never influences her reporting....)

Everybody is doing their politics here. She represents San Francisco and she represents, I know the Speaker's role. you have to respond to the nosiest elements in your caucus, and the most passionate and apparently, I assume just knowing the Democratic House, the voices she's hearing from every single day are the left who want out. Now this president never promised to get out of Afghanistan. And he's not gonna...

He never promised to pull out, that was the good war, the necessary war. Oh, by the way he never ran on the public option. Somebody's got to tell these people on the left and the netroots and some of our colleagues, yeah, he might like the idea of a public option, he may prefer it. He didn't run on it. He didn't get elected for it. So this idea that he somehow betrayed a left wing mandate is nonsense.

Well, yes he did - this is from the PDF document, The Blueprint For Change - Barack Obama's Plan For America:

Quality, Affordable and Portable Coverage for All
(1) Obama’s Plan to Cover Uninsured
Obama will make available a new national health plan so all Americans, including the self-employed and small businesses, can buy affordable health coverage that is similar to the plan available to members of Congress.

The Obama Plan will have the Following Features:

• Guaranteed Eligibility: No American will be turned away FROM ANY INSURANCE PLAN because of illness or pre-existing conditions.
• Comprehensive Benefits: The benefit package will be similar to that offered through Federal Employees Health Benefits Program (FEHBP), the plan members of Congress have. The plan will cover all essential medical services, including preventive, maternity and mental health care.
• Affordable Premiums, Co-Pays and Deductibles.
• Subsidies: Individuals and families who do not qualify for Medicaid or SCHIP but still need financial assistance will receive an income-related federal subsidy to buy into the new public plan or purchase a private health care plan.
• Simplified Paperwork and Reined in Health Costs.
• Easy Enrollment: The new public plan will be simple to enroll in and provide ready access to coverage.
• Portability and Choice: Participants in the new public plan and the National Health Insurance Exchange (see below) will be able to move from job to job without changing or jeopardizing their health care coverage.
• Quality and Efficiency: Participating insurance companies in the new public program will be required to report data to ensure that standards for quality, health information technology and administration are being met.

This document was circulated widely by the Obama campaign. Some might argue that nowhere does this document champion a "public option." If this description isn't about an optional public plan, I don't know what is. The accompanying quote from an Obama campaign speech spells it out:

“We now face an opportunity – and an obligation – to turn the page on the failed politics of yesterday’s health care debates.... My plan begins by covering every American. If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less. If you are one of the 45 million Americans who don’t have health insurance, you will have it after this plan becomes law. No one will be turned away because of a preexisting condition or illness.”
--Barack Obama, Speech in Iowa City, IA, May 29, 2007

This was the change we could believe in. Those of us who now expect the President to keep his word are not the left wing nuts that the MSM portrays us as. The President's words are clear and unambiguous. Mr. President, keep your word.

Economic Voodoo

2009-09-20T18:43:00.005-04:00

As I've written in several places earlier, the rise of debt in the United States, and elsewhere has had profoundly negative effects on various parts of the American psyche. I've argued that we Americans have been seduced into thinking that debt is neutral, or perhaps good. I've also pointed out the obvious fact (at least obvious after some reflection) that corporations have made a conscious effort to convince us that debt is a good thing, that the world will come to an end, or perhaps fall off its axis, if we don't take on more and more debt. I've also pointed out that the move toward more and more debt produces slavery, rather than the freedom pronounced in commercial after commercial by Visa, Mastercard, AmEx, etc. This slavery, I contend, is intentional, and produces a dramatic dampening effect on the force of democracy here and elsewhere. People who are in debt slavery are resistant to efforts to rock the boat. If you have a huge amount of debt, maintenance of the status quo is crucial to keeping the status quo.

I have also stated my ongoing concern about the pronouncements from the Obama administration regarding our economy, and the fact that the same ship of fools that got us into this mess are hard at work now within the Obama White House. In last few days, some additional analysis of some of the President's recent comments on our economic travails. Referring back to a speech the President gave in April 2009, economist Steve Keen points out an obvious fact. First here's the speech, with the section in question:

Of course, there are some who argue that the government should stand back and simply let these banks fail – especially since in many cases it was their bad decisions that helped create the crisis in the first place. But whether we like it or not, history has repeatedly shown that when nations do not take early and aggressive action to get credit flowing again, they have crises that last years and years instead of months and months – years of low growth, low job creation, and low investment that cost those nations far more than a course of bold, upfront action. And although there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks – "where's our bailout?," they ask – the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.

In these words, President Obama spells out the strategy of bailing out the financial institutions that got us into this mess, rather than directly giving money to individual Americans. Read it carefully. Can you spot the problem with this strategy?

Steve Keen makes this statement of the obvious, once you discover the fly in the ointment:

This argument comes straight out of the neoclassical economics textbook. Fortunately, due to the clear manner in which Obama enunciates it, the flaw in this textbook argument is vividly apparent in his speech. This “multiplier effect” will only work if American families and businesses are willing to take on yet more debt: “a dollar of capital in a bank can actually result in eight or ten dollars of loans”. So the only way the roughly US$1 trillion of money that the Federal Reserve has injected into the banks will result in additional spending is if American families and businesses take out another US$8-10 trillion in loans. What are the odds that this will happen, when they already owe more than they have ever owed in the history of America? …

Our President, who I voted for and campaigned for in the 2008 election, presents me with a gift I must refuse: more debt. He states that for all of this to succeed, we all must go into debt yet more! Be it a business or an individual, the only way for this economic stimulus to work as planned is if, for every dollar given to a lending institution, we all borrow ten times as much!

I, for one, must just say "NO" to this idea. Not only is it a bad financial idea, it is also bad for our democracy. Keen argues, and I think convincingly, that money given to consumers would have a far more positive effect on the economy than the Bernanke/Geithner/Summers plan for us all to go directly to debtor hell. I argue, further, that, in addition to the economic travail produced by more and more and more debt, that our democracy will falter yet further, that Americans will feel more and more inslaved - and more and more powerless - if they mount up more and more debt, which appears to be the plan, in the President's own words.

This is a very bad idea. These people are playing with fire. We've seen recently that a certain segment of the American population already feels that our socialist, communist, Marxist, Kenyan undocumented worker president (their fears, not mine) will do from the inside what Osama bin Laden tried from the outside on 9/11. They already carry signs suggesting that the next time they show up that they may do something with all those guns they own.

Now the economic idiots, who are apparently very bright folks, think we should take on more debt? This is a very bad idea. Debt slavery will only add more fuel to this fire. It will produce the mentality of slaves among those who take on more debt. And slaves will, at some point rise up and throw off their chains.

This is exactly what we don't need. I will give President Obama the benefit of the doubt on this; however, perhaps he's thinking too much like the other wealthy white guys he's surrounded himself with. Perhaps the President needs a refresher course on what it's like in the neighborhood his Chicago house is in. You can be sure that most of those folks are already feeling that things have not gone well economically. The more that the average American senses that his or her government is operating for the advantage of a select few rather than the people at large, the greater the threat that those left out will find less peaceful means to resolve their grievances.

And that is something to avoid at all costs.

A Message to Teabaggers

2009-09-16T10:54:00.003-04:00

This message is in response to this comment on Huffingtonpost about the supposed Post-racial world after the Obama election:

OK Mr. Teabagger....where was your rage at out of control government when our out of control government - run by Republicans - invaded Iraq? Where was your anger at being fooled into supporting an effort that had NOTHING to do with "defending our freedoms", which we heard time after time from the Bush administration? Where was your rage a year ago this month - BEFORE Obama was elected - when the Bush administration cooked up the entire financial bailout deal that got us into this mess?

Now go look at the pictures of the rally this last weekend in DC - what color are all the people there? Is is possible, despite your black friends, that something may have slipped your notice about who you hang out with? Maybe it's true you're not racist, but what about all your cohorts?

Now, for the record, my skin color is probably closer to yours than to Obama's. My ancestors came to this continent about 400 years ago, but not as slaves. I, too have many black friends. Hell, I play jazz and R&B for a living. (that's "black" music) With black folk. But the color of my skin doesn't prevent me from seeing what is patently obvious. When your fellow teabaggers start bragging about their 2nd amendment rights while carrying guns to town hall meetings, and showing up at events where our president is speaking, only a fool could mistake the non-subliminal message these people wish to convey. When the President is receiving death threats at a rate 400 TIMES as many as previous presidents, no person with lineage back to Africa is either surprised or confused about the reasons why.

You call yourself a conservative. What exactly do you want to conserve? What is it you don't want to change? The insanity of the Bush years? The wanton spending propagated by other "conservatives"? The unbroken history of control of the White House by white males - until now? Do you really think that this country has broken with its tragic racist past?

If you have black friends, ask them what THEY think of all this. Go ahead. Then have the courage to write back with the results.

We Americans must have the courage to do much to deal with this issue. First of all, we must have the moral fortitude to look at things as they are in matters of race. It is we, who call ourselves "white" (I'm still looking for that actually white skin on my beige skinned body) who imagined that this group of people WE stole from their homeland are "black" (even very few of them have skin color that is really black, and not brown). We imagined that they were another "race" aside from the human one. We enslaved them, not the other way around.

Secondly, there are still consequences for our actions when we hang out with people who are still racist. The spike in the sale of guns after the 2008 election is not accidental, particularly when the people buying the guns proclaim, point blank, that they're buying guns because there's a negro in the White House. If you have black friends, where in the world is your rage at THAT injustice? Do you have the courage to speak out FOR your black friends?

The Nature of Corporations

2009-09-13T12:02:00.009-04:00

Those of you who have followed my earlier threads on corporations are aware of my argument that, since the turn of the 19th/20th century, corporations, particularly those spawned in the United States, have a character. That nature, I contend, is anti-democratic, and has also actively worked toward the demise of the middle class.

Today on Daily Kos, on blogger echoes my thoughts and concerns about this well. Entitled This Corporate Life, the writer discusses the recent book by author Douglas Rushkoff, Life Inc.: How The World Became A Corporation and How To Take It Back. Here are a few points made by the blogger and the author that I believe are quite important to any discussion about our current state of national travail.

How would the people screaming around the reflection pool this past Saturday react if you told them that a big part of what drove the American Revolution was not the unfair actions the British government, but the grinding tactics of British corporations?

This fact echoes my own concerns about corporations that few Americans stop to consider: The original Boston Tea Party was an act against a corporation, The East India Tea Company. The American colonists took up arms over the support by the British government of this corporation. The rallying cry, "No taxation without representation" arose out of the fact that the East India Tea Company received favorable tax treatment that the British withheld from American colonists.

Further:

Rushkoff shows that corporations don't owe their origins to a desire for fostering innovation or to open up the investor class. It wasn't about building an "ownership society" or encouraging enterprise. Corporations were invented to stop all those things. They were invented because the ruling class saw that the middle class was ascendant, that the would-be bourgeoisie were expanding their wealth and threatening to squirm out from under the thumbs of their upper-class lords. The aristocracy created the corporation to perpetuate the control of the aristocracy.

This is a critical point. As I argued here, the move by corporations to encourage debt for the middle class folks was purposeful, designed to actually bring about the demise of this middle class. By fooling Americans, and others, to accept the false premise that we can be "free" while enslaved to massive personal debt, corporations have succeeded in dissolving the middle class in the United States. By creating a debtor nation, too fearful to speak up in the totalitarian workplace, corporations have succeeded in dismantling the middle class. By trading actual ownership for debt, corporations have successfully enslaved the large majority of us.

Here is another key point:

It’s not that individual corporations are bad. It’s that corporations can’t help but be bad. It’s built into the design.

Integral to every modern corporation is a model that incorporates (literally) the power structure of the late Middle Ages, and the colonization strategy of 18th century empires. They don't open a store in an area, they establish a colony.

Corporations are designed a certain way. In particular, publicly held, for-profit corporations, by law, must increase profits at all costs. The colonial model, which involves, first of all, having power over the colonists, is the centerpiece.

The blogger moves to this key point:

What each chapter of the book drives home is that this activity doesn't require evil people at the helm. There doesn't need to be a cackling set of greedy bastards circling the board table. The structure of a corporation dictates how it will operate. Force of law and force of habit ensures that any action not intended to improve the corporation's means of exploitation is discarded. The corporation is drive to act... like a corporation. It's not an evil plot, it's an evil system.

Please consider this point carefully. Corporations act as they are designed to act. A small group of people have benefited inordinately from this effort. Most of us aren't in that minuscule group.

Until we, as Americans, face this fact, little will make sense. Consider, as an example, the reaction of people under the spell of right wing radio and TV commentators, supporting insurance companies, worrying that the public option will spell the demise of insurance companies. Where is the person who, when actually attempting to get benefits from their health insurance company, ends up thinking, "Wow, what a great company!" ?

Finally, consider these words:

But the stories about corporations aren’t the worst of it. In fact, that’s just the set up. The world is under the control of giant international companies which employ ruthless tactics to break down national barriers -- actually, who often don't even notice national barriers -- and we've all cooperated to the extent that we've helped them dismantle the few things that stood between these relentless abstractions and real people. Yeah, what else is new?

What’s new, at least relatively so, is the extent to which we’ve internalized the values of corporations. We criticize corporations for acting as if only the next quarter counts, but how often do we treat our own investments (an not just our financial investments) in the same way? How often is our response on any issue made on corporate terms, on terms that assume life is a zero-sum game where your advancement means my stagnation?

This type of corporate-think is pandemic. I fully admit that the specter of changing this seems almost beyond our scope. Corporations, and the manner in which they think and operate, are ubiquitous, the norm. To think otherwise seems Luddite. We see the same kinds of arguments about corporations as we do about guns: Corporations aren't either good or bad, it's how people use them.

This notion is false. Corporations will destroy the middle class, and democracy, here and elsewhere unless we recognize this threat and change the laws governing corporations to our advantage. We must make these legal fictions serve our needs. Unless we take this on, corporations will continue to work, consciously and deliberately, to enslave us, to get us to serve their needs.

Hiatus

2009-09-13T12:00:00.003-04:00

My writing has been sporadic. I've been hustling my music career and other work. But I'm going to write more....

Logical Flaw on Torture

2009-05-02T14:38:00.000-04:00

There is an essential logical flaw to the notion that, because we tortured people in the past, and we're trying to look forward, we're not going to prosecute these past events. All crimes are in the past when prosecuted. We do not prosecute people for future crimes. We assert that, under our judicial system, all people are innocent until proven guilty. Obviously they are proven guilty of crimes they committed in the past.

On the basis of the logic some are attempting to apply to torture, one could argue that no crimes would ever be prosecuted, because we're looking forward. According to this logic, all victims should simply never complain or cry out for justice, since they are looking backward.

On the whole, the cry for justice always looks backward to past injustices, while attempting to right the wrong in the present or in the future....looking forward. To deny the need to look backward, to correct injustices in the past, those who advocate "looking forward" deny the very nature of justice - which ALWAYS looks backward.

I campaigned and voted for President Obama. I expect more from him than this "forward looking" stuff.

The Banks Own Washington

2009-05-02T12:04:00.004-04:00

This last week the U.S. Senate voted down a bill that would have allowed for greater control over home loans and reduced foreclosures. Here are the details:

Visit msnbc.com for Breaking News, World News, and News about the Economy

It continues to surprise and amaze me that so many Americans are unaware of the obvious facts. Corporations control DC. They have rights that we as individuals don't have. Under the guise of "freedom of speech" under the First Amendment - rights they took through a series of questionable court decisions leading up to the infamous Santa Clara County v. Southern Pacific Railroad Company decision, which I discussed here - corporations can write off their lobbying. You and I cannot do that. I can't hire someone to lobby for me and then write off the cost of that expense from my taxes.

Until we Americans decide to fundamentally change the underlying laws that define how corporations operate in this country, none of us should be surprised that corporations rule DC and the rest of this country.

The Mess of 2009, Part 3

2009-03-26T10:46:00.004-04:00

In part 2 of this series, I outlined the use and effect of consumerism on American culture, particularly in the service of publicly-held for-profit corporations. Convincing Americans, first and foremost, that they are consumers, that some part of their self-identity is tied up with being a consumer of things, was a significant step in insuring the profitability of corporations. I consume, therefore, I am. Once a person on some level accepts the notion that they are consumers, that they consume and do so in increasing quantities, that person becomes more and more vulnerable to the machinations of corporations through advertising.

We can see how successful this effort has been by reflecting on the casual manner in which the word consumer is tossed about. A prime example is the monthly publishing of the Consumer Price Index, or CPI. This index is a measure of the average price of consumer goods and services purchased by households. We frequently hear references to consumer confidence as a barometer of how people in this country feel about buying things. Low consumer confidence is bad, high consumer confidence is good.

Think about that for a moment. This idea rests upon the notion that buying more things is good, in and of itself. So, then, high consumer confidence works against such notions as thrift, frugality, conservation, modesty, and other qualities. The more we buy, the higher consumer confidence rises.

I now want to move to another associated handmaiden of corporations that, combined with identification as a consumer, is a powerful hook to close the circle for endless profits. I’m referring to the notion of debt and credit. It is this idea, and the manner in which it has evolved over just a handful of years, that lies at the center of most of our current economic problems. The key, however, in understanding this idea lies in full awareness of what debt serves. Understanding that debt serves a specific purpose for corporations is vital in discerning a solution to this issue and the role of corporations in American and world culture.

Americans are bombarded with endless offers to get more and more credit. Of all things that corporations attempt to sell us, credit is the single element that is the basis for almost all advertising. Corporations try – and largely succeed – to sell us on going further and further into debt. There is hardly an item sold under any venue where we’re not also encouraged to buy the item on credit. Whether the item is a large item like a house or a car, a moderate item like a vacation or a TV, or a small item, that we can purchase for six easy payments of $14.95 (plus shipping and handling), nothing escapes the grasp of debt and credit.

More importantly, we’re sold debt on the basis of debt being at least a neutral experience, perhaps even a good thing. There is rarely a situation where anything negative is associated with increased debt. If you “own” a home (I use the term “own” loosely, since most of us, in fact, don’t own our homes – the mortgage company does) the mortgage company will inevitably try to sell you on more debt. Take out a home equity loan (which actually means, “buy” some more stuff and roll the cost of that stuff into your mortgage). Throughout such a process, there are never any “red lights” – never any effort on the part of the lender to say, as an example, “Do you really need that $30,000 pool in your back yard? Maybe you should save up that $30,000 and pay for it cash!”

As a result of this view of debt, I could, this afternoon, take my credit cards and find something to buy worth $75,000 and spread the debt across several cards, without any cash down. No one, none of the credit card companies, would ask me how such a dramatic increase in my debt would affect my life, whether I can really pay such a debt off, or any other questions that might cause me to pause before spending a tidy sum like that.

In order to grasp the magnitude of the change in attitudes toward debt, reflect back, if you’re old enough, to a time when credit cards were a rarity. If you’re too young to remember this, ask anyone who can remember the early 1960’s. I’ve asked this simple question of dozens of people: “How many credit cards did your parents have?” The answer is usually quick and unequivocal: “None.” Or maybe one – a gas card, or perhaps a department store card. Most often the answer is that our parents had no credit cards. Not a one.

In the early 60’s the public attitudes toward debt were vastly different. Debt was considered negative, something to be avoided. Going into debt brought a certain shame with it. In part, this attitude toward debt reflects longstanding moral restraints on excessive interest charges. The term usury implies charging excessive interest. Usury laws date back thousands of years, with prohibitions on excessive interest charges found in both the Old and New Testaments and the Koran. In particular comes this warning from the Old Testament:

The rich rules over the poor, and the borrower is the slave of the lender. – Proverbs 22:7

There are two key elements to these ancient words. The first phrase states what I consider a primary goal of rich people: rulership. While not universal, many rich people believe that their wealth gives them rulership rights. The second phrase then spells out their tool to accomplish their rulership permanently: debt.

I find it almost humorous to ask people who grew up in the 60’s whether their parents had credit cards. It’s almost like a light comes on when they think about this for the first time, which many people do because debt is almost an unconscious matter in our culture. In contrast, it is almost normal now for younger people to live in total dependence to debt, thinking that any and all debt is acceptable.

Crucial to this entire effort is this:

Take a moment to reflect on the reality this commercial attempts to conjure up. Going into debt keeps the wheels of progress moving ahead. Paying with cash stops the wheels of progress. Corporations, and the wealthy people they serve, want to convince us all the debt is freedom – like the credit card commercial set to the Rolling Stones’ lyrics, “I’m free to do what I want, any old time.”

Nothing could be further from the truth. This should be obvious once we stop to think about it. There can be no freedom in debt. Who of us feels free when we get our credit card bills? What factors keep us from rising up when we see injustice? Isn’t our indebtedness – our things, multiple cars, a myriad of electronic playtoys, two or more houses, you name it – the force that prevents us from saying what we really believe in that meeting at work?

Even now, despite the fact that the U.S. economy, which appears to be leading the rest of the world toward some economic hellhole, Americans seem so….quiet. We hear reports of older folks going to the homes of AIG executives demanding accountability. Realizing they have few remaining years left and little to lose now that their “guaranteed” 401K’s have evaporated, faced with the prospect of being a greeter at Walmart, what exactly do they have to lose? The rest of us yell…..at the TV.

I contend this is all purposeful. Corporations, serving the desires of a relative few on this planet, have created a clever web. I will detail that web in my next article.

A Musician’s Manifesto

2009-03-23T09:49:00.004-04:00

Do you still remember when it started for you? I’ve played music, it seems, since before I was born…and in my case that may actually have been literally true. My mother was a classical pianist and my father, a clergyman, also played pipe organ. I remember one conversation with my father about my bass playing where he noted to correspondence between the mighty sound of the pipe organ and the sheer power of an electric bass.

But there was a point where something touched me. As a bass player, (I already played guitar, piano, violin) there was a moment. I’d just moved to Chicago’s Hyde Park neighborhood, where the previous dwellers had left a copy of a fateful LP – “The Moods of Marvin Gaye.” One song started it – “One More Heartache.” The bass player – unknown to me at the time – played this bass line that changed my life fundamentally. I had just bought this 1952 Fender Precision Bass (damn I wish I’d kept that one!) for $100. Stunning instrument. Maple fingerboard. This bass line came out of my record player. I had headphones. I listened to it and numerous other Motown songs again and again.

I now know what happened to me. Something resonated - a sympathetic resonation. What I heard flowing from the genius hands of James Jamerson (who I consider the greatest electric bassist of the 20th century) started something vibrating inside of me – like a string somewhere deep in me, a string waiting to be caressed, to sing, to cry.

Do you remember that?

The music of that time had that same world shattering effect on so many of us. We sang about such important things. It was the irresistible beat that moved our feet – and our hearts – without our even noticing. Feet tapped. Heads moved in rhythm. Our bodies felt the groove – the groove of Something Different – a different call than anything we’d ever known before.

And our poets wrote. That same Motown tune:

One more heartache,

I can’t take it,

My heart is carrying such a heavy load,

One more ache will break it.

As I looked out at the world, my heart, indeed, did ache, to the point of “one more and I’ll explode.”

Other poets asked, loudly, poignantly, “What’s Going On?”

Mother, mother

There's too many of you crying

Brother, brother, brother

There's far too many of you dying

You know we've got to find a way

To bring some lovin' here today - Ya

Father, father

We don't need to escalate

You see, war is not the answer

For only love can conquer hate

You know we've got to find a way

To bring some lovin' here today

What’s going on?

Others imagined this:

By the time we got to Woodstock

We were half a million strong

And everywhere there was song and celebration

And I dreamed I saw the bombers

Riding shotgun in the sky

And they were turning into butterflies

Above our nation

We are stardust

We are golden

And we’ve got to get ourselves

Back to the garden

We all felt that place, inside – something moved – what we heard in this great music was, indeed, a call, a spiritual experience we all could taste.

For many of us, music plays that central a role in our lives. It is not “entertainment”. It is, as a great jazz drummer said to me at the end of recent set, music is “re-creation.” We are, indeed, re-created by music. The great African drum cultures, out of which blues, jazz, R&B and rock flowed, understood this. Drumming was not an “art form”. Drummers were not “artists” doing their art Over There. Drumming was the way the unseen forces communicated with the people. It served as a conduit, the way that this unseen realm engaged the village and made them a People, connected them to the earth and to each other.

This was no mere metaphor – just as the power of our music was no metaphor. The great movements of the 60’s – and they were great, indeed – were driven by the music. Those of us not born black took our first look into the world of African Americans through music, whether it was “race music” played on AM radios all over this country throughout the 40s and 50s, or the soul infection so many of us fell to from the truly ecstatic music that flowed out of Motown, from the hands of one of the most potent collections of musical genius we have ever seen. My man Jamerson was the shaman – he was the constant force thoughout that time, the channel that made the Motown sound the Motown sound. He and the drummers made music that changed the entire face of this country. And while the words did wonders, it was the unspoken portion – the music – that changed our hearts.

We didn’t have to go to church. There was no creed, no test we had to pass. It was direct, unmediated. It took no initiation – beyond, of course, the initiation of listening, which seemed impossible not to do. Who could resist it? It crossed all boundaries. Close your eyes. Listen to a Motown tune. There are both black and white musicians playing. Tell me which is which…can you do it? More importantly, does it matter? With my eyes closed, listening to this music, it didn’t matter anyway. It was soul music. And my soul knew it. It was transformed.

So many of us have had this experience. We Knew Something. It drove the revolutionary changes of that era.

What happened? Too many of us lost this sense.

We finally are hearing great voices rising up. It saddens me greatly that too few musicians rose up against the Iraq War. Those of us who remember the 60s and 70s know the power that music held in our movement. Those voices moved us to action.

There has been too little as of late. Too few of us spoke up against the expansion of the corporatist mindset in our culture. Our generation fell for consumerism. And musicians fell for it.

At this point in time, the life of a successful musician is this:

Record a CD.
Record company buys the CD.
The musician or band goes on the road to hustle the CD and to play a few tunes from the next CD.
The next CD gets recorded.
Go back to step 3.

And that’s about it.

Is this really all that music is to us – yet another thing to hustle, that adds to the aggregate success of a bunch of suits?

There were many excesses in the 60s and beyond. We may have gotten too high. However, the thing we heard in music was real – authentic. It meant something. It is time we got back to that.

We live in a time at the cusp of something. I don’t know what it is, or where we go. But we all sense it – we’re on the edge. It is time for all artists to dig deep, to listen to those same primordial voices and rhythms that moved us before.

There should be no question that the suits led us down the wrong road. Corporations, as I discuss elsewhere on this blog, have attempted and largely succeeded in seducing us all to buy their things – all of them, lots of them. In doing so, I contend that their efforts have been quite conscious and deliberate – that their intent has been to decimate the middle class in the United States, and weaken our democracy in doing so.

It is time we musicians, artists, poets, find a loud and clear voice again. Once we stood up against a war we considered unjust, and we spoke out against a culture we knew was too rigid, too closed. It is time we rise up again. This is our time. Let us, once more, listen to those voices, the ones speaking through the rhythms in our music, rising up from a powerful authentic source.

Losing Our Religion

2009-03-20T10:31:00.009-04:00

I made some comments earlier about Tim Geithner, and wrote about his comments that there was some "basic inherent economic value" in troubled Wall Street assets. I want to expand today on why I see statements like these as troublesome, and why Tim Geithner needs to be replaced.

My critique of Mr. Geithner - and perhaps of others in the Obama administration - centers around the fairly obvious disconnect between Geithner and others within the Wall Street Fantasy Land and the rest of us who actually live in the real world. Consider, as an example, this comment by CNBC talking head Mark Haines:

Raines makes the following breathtaking comment:

Let’s get back to what I regard as a fundamental issue here. I know it’s politically unpopular, politically incorrect. I know it goes against all of the populist indignation that’s out there right now. But you can’t really, it seems to me, expect that these Wall Street companies are going to be run well by a bunch of people who don’t make more than $250,000.

Let's take a moment, after picking ourselves up off the floor, to think about this bizarre notion.

First of all, Haines drops the "politically incorrect" stinkbomb, that roughly translates into, "now I'm going to speak in the secret code of all of us right wing lunatics. Once I say this please disperse it widely on FreeRepublic or Fox News."

After all, if this argument was rational, there would be some basis that Haines would proffer in support of this idea. We've heard, again and again from the right, that the plan to raise taxes on those making more than $250,000 would unfairly affect small business owners. Here's one example:

Obama's populist rhetoric suggests that he's only going after the super-rich. Yet reportedly half of individuals earning over $250,000 a year are small business owners. During the past 15 years, small businesses have been creating over 90% of net new jobs -- altogether, more than 20 million jobs. How smart is it for the heavy hand of government to come down on these employers?

Apparently this "half" of all those making more than $250,000, who create 90% of net new jobs aren't even qualified to do their own jobs. And their companies aren't run as well as the Really Big Companies where you need a person to make a Whole Lot of Money because they are Super Smart and Super Cool.

Maybe Haines should watch any current episode of Celebrity Apprentice. These folks all make more than $250,000 a year. It should be clear to anyone that these folks are really, really smart.

Or to quote Borat, "Not."

Mr. Haines was apparently asleep during the Enron debacle. We saw, played out on the international stage, the depressing fact that Ken Lay thought he had been "fooled":

“I don't think I'm a criminal, number one,” says Lay. “Am I a fool? I don't think I'm a fool. But I think I sure was fooled.”

While no person wants to admit, on the world stage, that they were a fool, few of us who watched this corporate fiasco unfold can successfully parse Lay's distinction between "being fooled" and "being a fool."

And more to the point, as chairman of Enron, Lay was paid the big bucks not to be fooled or be a fool. Supposedly these guys make all the money they do because they somehow see things that the rest of us don't. They have sufficient vision to be able to steer a large corporation away from foolish decisions, ideas and the like. They have the insight to direct a large company toward goals that won't be viewed as foolish afterward. If they don't have the qualifications to do this, so goes the myth, they aren't qualified to be a "captain of industry", to quote my favorite captain of industry, Tony Soprano.

Who, then were the fools in Enron? Was Ken Lay a fool, or were the Bright Folks who hired Ken Lay the fools? Or perhaps they were all fools? I favor the latter evaluation.

So back to Mark Haines, and Tim Geithner. I think it is important to state that Haines' comment that Wall Street corporations need people worth more than $250,000 a year is not a matter of political correctness. It is critical to realize that most of the money made on Wall Street doesn't arise from actually making anything. Those men and women who run your 401K investment account don't create anything except more money (recently less money). At the end of the day, there is no picture they can take of this thing they actually made or built or helped build. As we've all seen, the vast sums of money recently bleeding out of Wall Street office suites was conjured up by manipulating debt. Borrowed money and credit lay at the center of any "bubble." After all, if there was something real at the center of these funds, there would be no bubble to break. This is like the difference between "owning" a house (when in reality the mortgage company really owns the house) and actually owning a house. No "bubble" can alter the fact the a home owner really owns a home, a house with a real address on a real street.

Since debt lays at the center of almost everything Wall Street does - whether we're talking about the accumulated and amalgamated debt of people like you and me surrounding our homes or autos, or the credit default swaps/wagers on whether those mortgages will or won't go sideways - it is critical to remember that all debt and credit depends on confidence - the belief that this person who I lend money to will pay it back with interest. This confidence is an act of faith, not a matter of fact.

The notion that we need Really Smart People to guide the ships of industry is an act of faith within the Wall Street confidence game/religion. It should be painfully obvious that that idea is an act of faith every time you look at your 401K balance right now.

Likewise with Tim Geithner. When he says that Wall Street assets have some "basic inherent economic value" he speaks an article of faith, not a statement of fact. Again, check you 401K balance. Is there some 'inherent value' to it, or does it more resemble mine, which clearly appears to have a declining value, that appears to be an investment I should not and cannot rely on?

This gets to the heart of why I think Geithner and a bunch of these other folks need to go. They are speaking metaphysical mumbo- jumbo. They speak about such 'inherent value' in order to get me to believe these assets have some inherent value - not because really they do. They want me to believe this so that I will have confidence, so they can continue their gameplaying. Without my confidence in them, they cannot change water into wine, economically, or perform some alchemical alteration of lead into gold within the Wall Street arena. Like paper money itself, which only has value as long as we all believe it does, Wall Street hoodoo merchants depend on our confidence in them. Given what we've all witnessed in the last six months, can anyone produce a good reason for giving them our confidence?

Until we Americans come to grips with the plain fact that the likes of Ken Lay, Tim Geithner, and a list of other people, want to fool us into these confidence schemes, we will be bigger fools than they are. We've been talked into accepting the article of faith that debt is OK, that more debt is great, that betting on debt to make more money is a good idea. Until we divorce ourselves from these Articles of Faith in the Wall Street Religion, we shouldn't be surprised to find we need to lose our religion.

Bad Tone

2009-03-15T11:43:00.004-04:00

Was I the only person that found Dr. Christina Romer irritating on Meet The Press this morning? Here, as an example:

Visit msnbc.com for Breaking News, World News, and News about the Economy

I have no comments about her content. But her tone and demeanor were just a bit too...chipper. Frankly, she smiled just a bit too much - much too ''light"..... David Gregory was decidedly serious. Romer could have been talking about her grandkids' performance at the grade school play she saw last night.

In contrast, when Jon Stewart had Jim Cramer on his comedy show this last week, Stewart did little to provoke a laugh - because the things he was talking about were just too serious to kid about.

Romer seemed just far too upbeat, too smiley, given the fact that, like millions of others, I lost my job a few weeks ago. I'm just not smiley and chipper about things. Those who lost their jobs long before I did inevitably carry more weight on their shoulders than I do. I, for one, just don't want any smiley, upbeat nonsense from anyone in Obama's administration. Any optimism right now must be tempered by the reality that those of us on the business end of our current financial debacle just don't feel real upbeat these days.

It's akin to going into surgery to get your left leg amputated, and the doctor telling you, cheerfully, just before you fade off under the anesthesia, that you'll be up walking around in a a couple of days.

Just a bit of a disconnect.....

Sticky Wicket

2009-03-15T11:32:00.002-04:00

I've been a huge fan of Kevin Phillips for some years, having read all four of his recent books starting with the stellar "Wealth & Democracy." He commented here on HuffingtonPost about the current Obama financial team and its plans. Like others, I have big concerns about the likes of Geithner and Bernanke. I discuss my concerns here:

http://notesfromtherustbelt.blogspot.com/2009/03/if-pigs-could-fly.html

My concerns with these folks are manifold. As quoted above, Geithner's comments about the "basic inherent economic value" of Wall Street assets belies a basic level of nonsense talk. There is nothing "inherent" about the value of these assets. It's like saying that there's some "inherent value" in dollar bills - if there is, I'm now going to declare that toilet paper is money, has "inherent" value, and has increased value after usage, and then further declare that nothing smells about this...

Paper money only has value because we say it does. Wall Street assets have the same inherent value, the value being exactly "nothing".

I believe our problems run far deeper than Wall Street. A more fundamental problem, in my view, is the very position of corporations under the law. Until corporations no longer are viewed as "persons" under the Bill od Rights, something unheard of when the Bill fo Rights was written, until corporations can no longer use advertising and lobbyists as "free speech" under the Bill of Rights, they will continue to wield the inordinately huge influence they have over seemingly every aspect of American and world culture. We all decry the influence of "lobbyists" in DC without questioning WHY they have the right to sit in the offices of our national representatives and do nothing but push for the views of the corporations that pay their salaries.

Until the efforts of corporations, whether through advertising, lobbying, campaign contributions or a myriad of other channels, are no longer viewed as "speech" protected by the Constitution due to their supposed "rights" as "persons", nothing about Wall Street, or governance in DC, will change. Until a corporation no longer has the same voice as a real person, a real human whose free speech is protected by the Bill of Rights, and until the point where real citizens regain the real power over our government, we will see no significant changes on any of these issues.

I'm developing a series of pieces on my blog on this subject. Read these in order. More to come.

http://notesfromtherustbelt.blogspot.com/2009/03/structures-that-divide-us.html
http://notesfromtherustbelt.blogspot.com/2009/03/mess-of-2009.html
http://notesfromtherustbelt.blogspot.com/2009/03/mess-of-2009-part-2.html

I fully admit that I'm sketching out a level of change for this country that is massive. It is difficult to imagine a world where corporations don't have the seemingly omnipresent power and influence they currently enjoy. It is vital, however, to remember the fact that, in large part, the American Revolution was fought over the influence of a corporation - the East India Tea Company - over the colonies, with the support of the then World Empire, Great Britain. We now face the need for a comparable revolutionary force, although hopefully within the context of our Constitution, without the need for a physical uprising. Our American conversation MUST move forward under that premise.

Drinking The Kool Aid

2009-03-12T11:27:00.004-04:00

You really have to hand it to the Bush water carriers. They don't even flinch, having no shame, no remorse, no doubt. Yesterday's exchange between Chris Matthews and Ari Fleischer spoke volumes about why, in 2009, this country has so much ground to recoup. Here's the entire interview:

Visit msnbc.com for Breaking News, World News, and News about the Economy

This stuff is breathtaking. Let's see if we can wade through this nonsense at all.

Fleischer: Of course, there is (sic) a number of people who believe in George Bush, believe in his policies, believe he helped contribute to a stronger, better America where we haven't been hit since Sept. 11...

Apparently Fleischer has been out of the country....what is "better" about our country as a result of Bush's presidency? The hallmarks of his presidency were 9/11, the Iraq War, and the Hurricane Katrina debacle. Those events were "better" in what way? (He just couldn't resist the 9/11 reference in the first 45 seconds, could he?)

Fleischer: Barack Obama should say thank you every day that he inherited a world without Saddam Hussein in it.

These folks won't give up on that, will they? Note to self, Ari - Saddam was not a threat to this country, He had no weapons of mass destruction. He had no delivery systems. The ultimate proof rests in the ease with which the Hussein rule fell - they offered virtually no resistance. Also - Iraq isn't near the United States - not even a long drive. How could they really be a threat to us?? (Going through all this stuff again is really dumb.....)

Matthews: Are you proud of the economic record of George W. Bush?
Fleischer: You know, I think he came in with a recession and left with a recession...
Matthews: No, really are you proud of it? Is it something to brag about?
Fleischer: Chris, it's not a simple, one word answer.

Well, Ari gave a one word answer: recession.

Fleischer: I think when people look back on the Bush years, the one thing people will remember the most is that he kept us safe, we've not been attacked since 9/11. The second is....Barack Obama has inherited a world without Saddam Hussein in it.

What bizarre logic. Somehow we're "safe" due to something the Bush administration did? Tell that to the more than 4000 American soldiers killed in Iraq and their loved ones - a war of choice that did not make us any safer. Tell that to the tens of thousands of wounded soldiers and their families who suffered casualties at the hands of the Bush administration. What sane person can argue that we are "safer" because we invaded Iraq? And just how is a world without Saddam a better world for President Obama?

Fleischer: We can all be proud that we haven't been attacked since Sept. 11...that's what people are gonna remember about President Bush's administration.

Perhaps Ari forgot about the anthrax attacks.

Why should we be "proud" - proud of what? Should we be proud of breaking international law when we attacked Iraq, a nation that was no threat to us, that did not and could not do anything to the United States? Should we be proud of killing hundreds of thousands - maybe millions - of Iraqi citizens as "collateral damage"? Should we be proud of our record on torture during this war?

It depends, then, on which "people" you're talking about who "remember" what happened.

Fleischer: Who is talking?...I don't recall you saying that James Carville, Paul Begala, those people shouldn't be on the air defending their boss.

What precisely does Fleischer have in mind that Carville and Begala had to defend that compares with the long list of egregious acts of the Bush administration? Are we going to compare the "sins" of Bill Clinton's White House tryst with Monica Lewinsky to the actions of George W. Bush? What is the moral scale that sets this kind of equivocacy up?

Fleischer: You were tough on President Clinton on his ethics and morality....how couldn't you be?

Gee, Fleischer, how couldn't you be tough on President Bush's ethics and morality? What was ethical or moral about the Iraq war? Does Fleischer really want to raise Clinton's sexual issues to the moral level of war?

Fleischer: He (Bush) wasn't warned directly, it was one of those vague warnings about Al Qaeda wants to attack in the United States.

What is this guy talking about? Richard Clarke writes vividly about his 'hair being on fire' regarding the seriousness and imminence of these attacks. Clarke could not get a meeting with Condi Rice on these issues. He was ignored. The Bush administration was not focused on terrorism before 9/11. That is the record.

Matthews: Do you believe that the administration made an honest case in taking us to war in Iraq?
Fleischer: Yes, yes...I said we were wrong, not dishonest...it was an intelligence mistake. We were all wrong.

I love it when people use the words "intelligence" and "mistake" together.

No, Mr. Fleischer, the mistake was a moral failure, a failure in judgement. Everyone didn't believe that Iraq had WMD's. The U.N. inspectors, who were doing their jobs right up to the start of Shock & Awe didn't believe there were WMD's. Scott Ritter, decorated U.S. Marine who was a major player in the inspection of Iraq as a U.N. inspector throughout the 1990's, knew there were no WMD's. He spoke and wrote about this passionately before the war.

These people are without conscience. There is no good reason to think they will ever admit their foolishness, their immorality, or amorality. I listened closely to Chris Matthews during the buildup to the War in Iraq. If he was against the war, which he now claims, I, for one, could not tell. That said, I applaud his current rage against the follies of the Bush administration. It may be too little, too late. But the likes of Ari Fleischer, who somehow musters the strength to go on national TV and tell more lies about the Bush administration, is beyond the pale.

The Unhinged Right

2009-03-11T14:49:00.002-04:00

Just when things look bad enough, folks on the Right go totally off the deep end. We heard from "Walker Texas Ranger" Chuck Norris during the 2008 election cycle sounding fairly strange. Now that they lost, these folks seem to be moving toward treason and insurrection.

Claiming that the second amendment is, indeed, the amendment in support of uprising, Norris goes off:

David Neiwert comments about this at Crooks and Liars. David has been writing about the subject of extremist rhetoric on the right in particular for a good while. The specter of a destabilized economy pushing people toward violent, physical responses to perceived enemies is a factor that we Americans should be having active discussions about.

These folks aren't kidding around. They have a whole lot of guns. If we cannot resolve our differences with words, our future fate is clouded at best.

More Thoughts on CNBC

2009-03-11T11:31:00.002-04:00

After listening to and reading about the goings-back-and-forth between John Stewart and Jim Cramer, I have some additional thoughts particularly about the role of a company like CNBC in the financial arena. I have some real problems with the notion that CNBC, fully owned and operated by General Electric, has no particular agenda in marketplace issues. The idea that, somehow, these folks who must do the bidding of their Masters are, somehow, filling the role of a legitimate "fourth estate" role as part of the press strikes me as absurd. And while a great young writer like Cenk Uygur says here that his critique of CNBC doesn't reflect any "axe" he has to grind with them because he didn't lose any money in the market, I think he needs to step back and go the next step.

The fact is that, unless you live on Mars, or are part of an indigenous culture somewhere on earth that is still unaffected by the spread of the "global economy", none of us are immune to the faltering steps of these giants that walk the earth. The megaforces at work in multinational corporations have propagated this idea of the "global economy" which has some influence on all of us. This price of oil, as an example, responds daily, it seems, to market vicissitudes. Of course, there is widespread speculation, deservedly so, that oil markets, like the market manipulations that Jim Cramer admits to here, are frequently driven by other forces beyond supply and demand.

Four dollar gas - or two dollar gas, for that matter - affects every one of us. The manipulated fluctuations of the market creates countless ripples that none of us can ignore.

Jim Cramer vs. John Stewart

2009-03-11T11:12:00.004-04:00

Huffington Post has a great video up today with an interview in 2006 with CNBC host Jim Cramer. Cramer has been the focus - justly so -of Stewart's barbs recently. I say "justly" in light of the interview. It's shocking to actually hear and see someone defend these extreme, egregious actions on the part of market players:

Money quote: "What's important when you are in that hedge fund mode is to not be doing anything that is remotely truthful, because the truth is so against your view - it is important to create a new truth to develop a fiction."

Fiction. I'm speechless.

Giantism

2009-03-11T10:36:00.002-04:00

Yesterday, my friends at Crooks and Liars published this article with the title, "Why Are Companies Allowed to Get Big Enough to Impose a 'Systemic Risk'?" This question is an important one. Not only should we be dealing with the effects of this giantism, but a host of other issues around corporate governance. This article clearly points to the obvious fact that corporations in the "private sector" have massive influences on the public. When companies experience financial difficulties there is always a cost to the public - whether it's payment of unemployment benefits to displaced former employees or other issues. There are relatively few companies that actually have plans in place to deal with the consequences of disposing of the things they produce. And when these companies control the financial security of entire countries - or, with the example of AIG, perhaps the world economy - that certainly has massive effects on every one of us.

At some point, we need to stop talking about corporations as part of some mythic "private" sector. There is simply no such thing.

Outsourcing is a Symptom

2009-03-10T11:31:00.004-04:00

Crooks and Liars today posted an article on J.P. Morgan outsourcing. I particularly enjoyed the comments of one person, a native of India, who said,

"Someone once told me that when the Europeans get bored they start a revolution, when the Americans get bored they go shopping. I think you guys went shopping for far too long."

To which I say, "right on." Why in the world aren't we Americans more pissed off? The problem with outsourcing, in my view, are the laws that allow the "private sector" to do as they please. This line of thinking is a problem because there is nothing "private" about this sector. Corporations are formed using public laws and regulated by various levels of government. When these "private" companies, incorporated under U.S. laws, move jobs out of the country, we end up paying for it. We pay for unemployment benefits for these folks, and a list of other costs. After all, when someone loses a job that gets moved offshore, it's not like that person is dead!

There's nothing "private" about their advertising - and, most important, their lobbying.

We all bear the direct and indirect costs for any outsourcing by a company in the "private sector." We ask nothing from these fictional corporate "persons" who gain a long list of rights as corporations but too few of the responsibilities of citizenship.

The Mess of 2009, Part 2

2009-03-09T11:26:00.005-04:00

As I discussed in the first part of this article, the role of publicly-held corporations, particularly in the United States, has not been a subject of mainstream discussion in our current period of economic malaise. Numerous opinions have been opined on why we’re currently in this mess – consumers who foolishly bought homes they couldn’t afford, too tight credit, credit default swaps, and a long list of other symptoms. One factor that is infrequently discussed is the manner in which the very form of publicly-held corporations leads to certain logical – and tragic – conclusions.

The trajectory of the middle class in the United States parallels the growth and influence of publicly-held and traded corporations. Privately held-corporations, the influence of unions, the GI Bill of Rights, and other forces allowed for the evolution of a robust middle class in this country. But as publicly-held corporations grew, and bought up a myriad of smaller companies in the 80s and 90s, the manner in which they influenced this middle class was dramatic. As I outlined in Part 1, corporations went after the pension, convincing workers that “owning” their retirement was better than being on a fixed pension. By investing their retirement money themselves, so the talk went, we employees could have even more to retire on than if the company actually provided a fixed and permanent retirement income.

This didn’t work out real well, did it?

There are a series of other things that these publicly-held corporations also did. As a result of the infamous 1886 U.S. Supreme Court decision, Santa Clara County v. Southern Pacific Railroad Company, (or perhaps more accurately, as a tangent of this case…) corporations were declared “persons” with the same rights as real human persons under the Constitution. This decision gave corporations rights they previously didn’t have. Importantly, they gained the right of free speech. Advertising by corporations became “protected” speech and could not be regulated.

In the late 1800’s this wasn’t as important as it would soon become. With the evolution of the advertising industry in the early 1900’s, corporations, slowly but surely, developed a set of skills that are terribly relevant now.

Consumerism

As the influence of corporations grew in the early part of the last century, unionists fought for a reduction of the workday and workweek, along with numerous other workers’ rights. There was a key view, however, that they espoused that we hear little of from unionist today. Unionists had an objective in reduced work hours: leisure time. Note this comment:

“Workers have declared that their lives are not to be bartered at any price, that no wage, no matter how high can induce them to sell their birthright. (The worker) is not the slave of fifty years ago …he (sic) reads…goes to the theater…(and) has established his own libraries, his own educational institutions,…And he wants time, time, time for all these things…”

Juliet Schor, The Overworked American, 1991, p. 120-1

This vital connection between abbreviated work hours and leisure is fundamental and highly significant. Unionists realized that if workers viewed themselves as consumers, they would be as much slaves to their jobs as if they worked 10-12 hour days:

“Trade unionists and social reformers understood the long-term consequences of consumerism for most Americans: it would keep them imprisoned in capitalism’s ‘squirrel cage.” The consumption of luxuries necessitated long hours.”

Schor, p. 120

We hear very little from unions regarding this powerful argument these days. The mantra of limitless growth is considered normal these days. Consumerism is a building block of this. Consider why this is.

A private company may exhibit a hyper-materialistic bent as publicly-held companies do. But often, as noted in Part 1, family-owned businesses were familial. It was normal for the owner or owners of a privately-held company to know all the employees, treating them as family – sometimes better than family. A private owner could, if he or she wanted, decide, as an example, to distribute profits at year end to the employees who had such an integral part in producing the profit.

Publicly-held companies, in stark contrast, must, by law, have another master to serve: the stock price. By law, publicly-held companies must grow if at all possible. Not only must they grow, (i.e., the stock price must go up), it must grow exponentially. If 10% profit was good last year, 12% is the new goal, and a 10% profit this year becomes “under budget.”

Now, some companies, publicly or privately-held, produce real necessities of life – food, water, (not the bottled stuff), clothing, shelter. If, however, we all stopped buying these items when we had enough to live and no more, corporate profits would slow. That runs against the stated purpose of a publicly-held corporation to grow profits indefinitely. While a private corporation may tolerate lower, sustained profits, this model is unacceptable for a publicly-held, publicly traded corporation. Their goal must be more and more profits.

Early on in the 20th century, corporations realized that if they could use advertising to blur the distinction between what you and I need and what we want, we might be seduced into buying more of their stuff. The evolution of increasingly sophisticated advertising techniques served this end perfectly. Where being a consumer was once viewed as pejorative, publicly-held corporations in particular, slaves themselves to the unending pursuit of ever-increased profits, made a concerted effort to reshape American consciousness. We can see at this point almost a hundred years later that this effort succeeded magnificently.

Allow me to give an example about just one device – the microwave oven. I have nothing against these devices. But consider for a moment, those of you who can remember when these things didn’t exist, the evolution of a perceived need. At this point in time microwave ovens are close to ubiquitous. Every home now built has a space for one, just like it has a space for a refrigerator, a stove, etc. They are a given, a necessity, something we all just have.

Once upon a time, there were no microwave ovens. I remember that time. And while I find them useful for defrosting things quickly, or boiling water in less than two minutes, or popping popcorn, I have a confession to make. In the year before the first American heard of a microwave oven, I, for one, was not sitting around lusting for a device to pop popcorn quickly. I had no burning desire for such a device. Most, if not all people, weren’t seeking these things out.

In short, there was no massive market demand for these things. No one was sitting around saying, “Gee, if I only had a box in my kitchen that could defrost stuff quickly….” The market did not demand microwave ovens. They were simply outside of American consciousness because they didn’t exist.

And yet now we view these things as necessities, our homes built with a special space just for them, along with the electrical outlet close enough to work with those short cords.

How did this take place? How was something we might (or might not) want become something we now view as necessary? The answer is simple. We were hustled. The makers of these devices used advertising to seduce us, convince us, over and over again, that we needed a microwave oven. They succeeded in getting us to begin to think of them as a given, as something that we must have and cannot do without.

This subtle but dramatic change, this bait-and-switch, was critical for publicly-held corporations. Their success in convincing us that we needed what they sold changed a limited market into a limitless one. Corporations had the mechanism, the science, in place, to analyze exactly what makes the psyche of the potential buyer go from cold to hot for a product. Corporations, with their handmaids in the advertising world, spent vast amounts of money trying and succeeding in conjuring up desire for their products in our hearts. They found out how to create that “buzz,” that feeling that we just had to have that thing. From there it was just a matter of time before we ran out to buy that microwave oven. Or two. Or three.

I worked for almost a decade for one of the leaders in direct sales in the home. They had a sales force of almost 3000 people across the U.S. at one point. They had a sales device they used in presenting their product in the home called a Read Off. The salesperson would read off this notebook, which was designed to stand up by itself on the table so that the salesperson could flip pages, show samples, and work other magic. The salesperson would read the words from this notebook, word for word. Almost every page contained a question, and the answer to each question was designed to be “yes.” By the time the potential customer got to the end, to the pitch, they were accustomed to saying “yes” and would hopefully do so when asked if they wanted to buy this product.

This sales device is now primitive compared to the vast arsenal of sales and marketing tools to modern corporations. We see corporations form images that seem almost irresistible. Many of us, as an example, can remember the way that the image of basketball giant Michael Jordan was used by a host of corporations to create buzz for their product. Jordan’s image became associated with one product after another, and corporations used his image to seduce children and young people that by buying products he endorsed they could “be like Mike.” That’s one important reason why Jordan had to be a role model. Perhaps that entire line of reasoning – celebrities should be role models – has more to do with their usefulness as advertising props than with the actual need in our culture for role models. And there is a perverse relationship between advertising and the need for role models that I will advance in the next article on this subject.

We see this effort repeated, over and over again. We see musicians, who once called themselves ‘the crown of creation” in the 60’s, hustling any and everything. There is a great story about Jim Morrison threatening to take a sledgehammer to an auto live at a concert because the automaker wanted to use “Light My Fire” in a commercial. Now, paradoxically, we hear the Rolling Stones’ “I’m Free” used as background music for a credit card commercial.

We see celebrities selling any and everything. The entertainment industry creates the intense desire for us, particularly children, to be like the celebrity, and to feel this desire intensely. Once this desire is created, advertisers can make the next move and convince those same people that they can be like the celebrity if they buy that thing. That move – changing a desire into a necessity – is exactly what corporations want us to believe. And this serves their essential nature – the need for infinite growth in service to limitless profits – perfectly.

There is one more important shift that I want to discuss in the next part of this series.

The Mess of 2009, Part 1

2009-03-07T17:45:00.011-05:00

I write this sitting at home, staring at my computer, looking for a new job. I got laid off two weeks ago. I live in the Rust Belt – Detroit. Southeast Michigan has led the way into hell, and may ultimately be the area that catalyzes this nation into some type of economic tsunami. With the number of jobs connected to the auto industry in this area, directly and otherwise, if one of the Big Three goes under – and with GM posting a $9.6 billion loss in 2008 Q4, they lead the pack – I shudder to think about what’s next. Will the fall of one of the few remaining companies that make things in this country test the strength of our Republic to the breaking point? I hope not, but I fear so.

Any reasonable person must be wondering why we’re in this mess. After all, we spent most of the last eight years involved in a Global War on Terror that we’ve fought to defend our freedoms. One would hope that this endeavor, were it righteous, would earn us sufficient cosmic brownie points to avoid our current economic malaise. The whole 9/11 experience and its aftermath was troubling enough. Now we face a circumstance that almost none of us have faced before here.

We hear numerous voices on the political right, and elsewhere, who seem to be on a “Blame America First” kick on this issue. ‘The real problem,’ these voices intone, ‘is that we Americans have all spent beyond our means.’ According to this line of reasoning, if we all hadn’t rushed out to buy so many things we couldn’t afford – a house to big, too many cars, etc. – we wouldn’t be in this fix. Now, of course, there is some truth to such a view. But the facts point to a series of other culprits as the real source of our current malaise. Since it is middle class Americans of all persuasions and backgrounds who now see their homes and retirement savings falling like the leaves in the height of autumn, silently but in a deluge, it might be wise to remember back some years to see what has changed. It might also be prudent to examine who is benefiting from the demise of the middle class in the U.S.

The middle class in this country really took off after World War 2. There were a number of factors that contributed to that. The rise of a progressive labor movement in the late 19th century was the first step in the evolution of the middle class. With the rise of industrialism in the period around the Civil War, the rapid growth of the railroad system and the discovery of cheap oil throughout this country saw the further growth of a very rich class in this country. Eager capitalists were willing to have their workers labor under intolerable circumstances for meager wages. Those American heroes, who fought, bled and died at the front of the labor movement, pushing for legislation that brought about the eight hour day with closer control on workplace conditions, provided a first step in the development of a middle class.

After World War 2, the GI Bill of Rights, in conjunction with the hard-fought gains of the labor movement, provided GI’s with a series of opportunities – get an education, get a job at a decent wage and healthcare, buy a house, and with Social Security and a pension from that job, retire with some reasonable well-being.

Additionally, and importantly, there were other factors that contributed dramatically to this middle class phenomenon. Those of you who, like me, can remember the early 60’s, can answer this simple question: How many credit cards did your parents have? I’ve asked this question to many people, and the answer is usually “none.” At that time there weren’t many credit cards. I can remember, actually when, years later as a young adult, I got my first American Express card – which wasn’t even a credit card. My first credit card was a gas card, which is often the answer I get when I quiz others.

So, in addition to the factors described above, individual Americans weren’t in debt, not like we are now. Debt was viewed pejoratively, and rightly so. Many of us can vividly remember something that we now hear coming back into vogue: layaway. Buy it first. Get it when you pay it off.

Take note of that fact.

So what has changed? After perusing the description above, we might conclude, everything. How did the American view of debt change so radically from that point when all the forces that made the middle class what it was converged?

Here are a few factors:

Privately Held Companies

In that time period, many of the businesses in this country were privately held. I’ve worked for years in the printing industry. In Chicago there were once 5000 printers. When I worked there, most of the printers were family/privately owned. Numbers of them had been handed from one generation to the next, from parents to children, for many decades, back into the 1800’s. These private companies had a character that was frequently familial. I recall, working for one such printer in the late 70’s and 80’s, hearing the owner tell me that his employees were the greatest asset he had. In this environment, it was common for owners to back such words up with actions that reflected those values. And because the printing industry was a unionized business, nonunionized companies tended to play by the rules of union businesses the keep their valued employees with them.

While this example is not 100% true, many companies in this country dealt with their employees as described above. United Parcel Service, as an example, remained a private company for many years. UPS employees from the era when they were private speak of the company highly to this day. These private companies, as well as the public companies with unionized workforces, shared some common characteristics:

a) Work hours that were often close to 8 hours a day/40 hours a week

b) Overtime above 40 hours

c) A level of pay that allowed for a single family money earner

d) A pension that allowed loyal employees to retire with a reasonable degree of security

e) Other benefits, such as vacation, health insurance, and the like that gave their lives similar security and continuity

As a result of this, a family could buy a house, own a car, provide for a family reasonably, receive decent healthcare, get a decent education at a public school, go to college, get a job….and the cycle continued.

So what exactly changed?

Publicly Held Companies

Allow me to go back to my example in the industry I know best, the printing business. I remember well the time when printers in Chicago began talking about managing in a more “corporate” manner. What this meant was that they began to feel the pressure of competing with larger, publicly held companies. As newer, faster technology flooded the graphic arts business, it took more and more investment to compete. It appeared no longer possible for a printer to survive with a good, loyal body of employees using slower equipment. It was no longer feasible to compete with far larger companies who could temporarily offer lower prices, higher quality with increasingly overworked employees, without union representation. Family-owned businesses also didn’t speak the language of the investment bankers, could not go toe-to-toe with the financiers. Many, many of them faltered after over-investing.

As the buyout craze of the 80’s and 90’s gained momentum, these small, family-owned companies saw the opportunity of getting out of a business they seemed unable to compete in. Throughout Chicago, the companies, family owned and managed, were absorbed, one by one, by the larger, publicly-held printers – printers who, themselves, were once family-owned. In short order, the era of these small businesses atrophied.

As time went on, the 90’s bubble saw other factors erode. As these publicly-held companies felt increased pressure for more profit from investors, they began to jettison those building blocks of the middle class. Significantly, one of the first items to fall was the pension. Instead of giving an employee a guaranteed retirement income for life, corporations played the same bait-and-switch that the Bush (43) administration tried with Social Security. Just like the notion of “owning” your Social Security monies in your own investment account, corporations unilaterally moved pensions into one of those goofy numbers – 401K. Now we “own” our retirement income – except for the fact that with the 401K the employee had to begin contributing their own money into this financial vehicle we “own.”

That was pretty slick. And now, in 2009, we see what a wonderful idea that was. After all, what is your 401K worth? Mine’s worth….let’s see….no, let’s not. I’ve talked to many people who simply don’t open the envelopes from their 401K management company. More importantly, what we were told was a stable replacement for a pension has proven to be unstable at best.

Then there’s health insurance. Due to the rise of health insurance costs, companies of all sizes have moved larger and larger portions of healthcare premiums over to employees. While some of this is understandable, due to the influence of insurance and pharmaceutical companies on all levels of government, employees have often been smothered by the necessity of bearing this burden. Where unions once could provide the muscle to negotiate with corporations, no single employee can afford to stand up to a corporation for too long.

Along with these factors, corporations have also successfully fooled American workers into believing that they would be better off working for a corporation without the influence of unions. To some degree unions bear some responsibility for this. I’ve been in the musician’s union for 40 years, since I was 16 years old. This union is largely irrelevant to many musicians. I sorely wish this wasn’t the case, but it is. We’ve seen the unions, in their recent dealings with the Big Three, backed into a corner, with insufficient voice to mount any serious opposition to the further erosion of workers’ rights and benefits. There are just too many stories of corrupt union officials, of unions protecting workers who clock in and sleep some of the day, and other stories that lower many people’s view of unions.

In the meantime, up until recently, publicly-held companies have had a field day. While workers have seen their salaries and wages stagnate for much of the 90’s and early 2000’s, corporations have made off like bandits. We’ve seen company after company declare record profits, quarter by quarter, while simultaneously moving their manufacturing out of the United States to some country where they can get away from those pesky unions, where they can pay workers, including children, well under $1.00 an hour, where there are few environmental constraints and no OSHA, no health insurance.

These same companies want to sell us Americans more and more of their goods, much of which is manufactured elsewhere. Corporations have used several tactics to do this. I’ll discuss this in my next article.

The Structures That Divide Us

2009-03-06T13:03:00.002-05:00

I wrote this piece a couple of years ago. Today it seems more relevant than when I wrote it. I hope to post "Divide and Rule" later - I wrote this for the now-defunct Donkephant blog that I shared with Cyberotter. I'm working on the link.

My friend Cyberotter, in his article, "Divide and Rule the Polarization of America," outlined a series of ideas that we see at work dividing this country in the extremely polarized manner that has become politics as we know it. It is important, we think, to understand these ideas; it is also important to understand who benefits from this divisive spirit. To answer that question, I will now examine the nature of one of the largest structures in our country, that is, in fact, a global structure, a worldwide phenomena, that in a very short time, historically, has changed the face of both this country and the world.

The structure I refer to is the corporation, specifically, the for-profit, publicly held corporation. I contend that, while there are obviously many other forces we could - and will, in time - examine, this corporate form, by its very nature, poses a threat to democracy in the United States and elsewhere.

It should be obvious, first of all, that the modern corporation is probably the most undemocratic structure in any country it operates in. Many of us have heard, repeatedly, in our places of employment, that this or that company is not a democracy. Corporations are, on the whole, top-down organizations; people on the upper levels of the corporation have the power to hire and fire those below. And while this may seen normal, even right, to those of us within these structures, it is important to stop a moment and realize that this is not a democratic structure. In fact, if anything, this structure more resembles a totalitarian structure. Are employees free to speak up as they wish without fear of reprisal? You know the answer yourself. Since most of us spend the majority of our waking hours either at work or going to and from work, the effect on our individual and collective psyches cannot be overestimated. It should be no surprise that those of us who have such a high investment, both in time, energy and commitment to a form that is anti-democratic, feel little zeal when it comes to civic responsibilities. And, most importantly, we feel a high degree of resistance to speaking up; we have been trained from 9 to 5 not to speak up.

The overt form of the corporation serves one end, and one end only: to make profits for the stockholders. While corporations may espouse other motives, as a matter of law they must only make profits. All business decisions must serve this end. Employees are encouraged to do whatever is necessary to support the bottom line, including acting in ways that would be considered antisocial in normal relationships. Additionally, the corporate form makes an additional demand: not only that it makes profits, but the rate of profitability must grow, must accelerate. Five percent profit this year does not mean that five percent next year is acceptable; no, six percent is next years' goal, ad nauseum. Unlimited growth is the corporate mantra.

This form, that demands continual and unlimited growth, creates certain problems for the rest of us. Obviously, for any company to continue to grow, someone must continue to buy their product, and enough of us must either buy more of this product or more people must buy the product, or some combination of both. It should be no surprise that corporations do all in their power to induce us to buy their products. It is their nature.

This creates numerous side effects. While some corporations actually do supply products we need, such as food and shelter, more often than not corporations sell things we want, whether we need them or not. Through the use of advertising, corporations attempt, and often succeed, to confuse us - to get us to believe we need what they sell, to confuse what we need with what we want. While our needs are finite, our desires aren't; and if corporations can successfully convince us that we want what they sell, if they can induce us to desire what they sell, and more of it, they are then able to grow indefinitely.

It is important to remember how very quickly all of this has taken place. If we simply go back about 150 years ago to the Civil War period, most of these mechanisms didn't exist. Corporations then could not hold assets in perpetuity. They did not have the status as "persons" under the law and had no protection by the Bill of Rights for free speech, i.e., advertising. Corporations had a limited lifespan. That all changed in the late 1800's. Within a little over a hundred years, corporations changed from having a far more limited role in society to one where it seems they have virtually unlimited influence - particularly in relationship to the far more limited influence we have individually.

This fact cannot be overemphasized. The profit imperative, in connection with the gradual but inexorable development of increasingly sophisticated advertising and marketing techniques has allowed corporations - and the lifestyle that unlimited growth of profits demands - to seduce Americans - and now, the entire world - into accepting as normal what was once viewed as abnormal, even deviant.

Many of us can remember a time where credit cards were virtually nonexistent - or at least were used infrequently, if our families had them. Prior to the Depression, one of the main platforms of the union movement, along with the gradual reduction of the workday toward eight hours, was a strong anti-consumer worldview. Union leaders viewed consumerism as the easiest way to enslave workers to the same degree that the 12 hour workday did. After all, if workers became consumers, they'd have to work more to buy all those nice things...leading to their working 12 hour days...does that sound familiar?? Union leaders accurately understood that a person who defined himself as a consumer would be as enslaved to his job - voluntarily - as a person who was forced to work 12 hours a day just to keep a job.

There was a point not that long ago where being in debt was looked upon with shame. Now it's an odd day when we don't get something in the mail offering us yet more opportunities to go into debt. Can't spend it fast enough using your credit card? No problem - we'll just send you these nifty checks, which you can use right up to your $20,000 limit....

The fact is that every for-profit, publicly held corporation on earth has a vested interest in seeing us go further and further into debt. That vested interest is very simple: the bottom line. For-profit corporations are bound by law to make and increase profit. It is no accident that, for both Ford and GMAC, their money loaning businesses are bigger businesses than their actual auto sales! They not only want to get us to borrow as much money as possible, perhaps even from them, but to also feel the need to buy more - another car, a house, another TV, a better TV, a flat screen TV, ad nauseum...

Additionally, and significantly, corporations, by virtue of tax laws, gain many advantages as persons under the law that we as individuals will never be able to compete with. Just think for a moment about how difficult it is, relative to corporations, to gain influence in the halls of government. Corporations hire lobbyists, who get paid to do nothing but try to influence matters to their advantage, on the federal, state and local level. More importantly, corporations get to write the cost of such lobbying off as a business expense, lowering what they pay on taxes at the end of the year. We individual citizens could choose to do the same thing - assuming we can afford to! Can we write the cost of such lobbying efforts off our taxes? I'm looking for that line on my 1040..... It should be obvious to anyone that this is far from equitable. Corporations have a heavily weighted advantage in their efforts to buy - literally or otherwise - influence that individual citizens will never have.

We must ask ourselves how this affects our involvement in our democracy as citizens. It should not be surprising that this force, the force of corporate culture, discourages participatory democracy. We can certainly argue about whether this structure and its effect on democracy is accidental or purposeful. One way or another, however, the net effect is still the same. The advancement of these ideas has been terribly harmful to democratic ideals. Until we begin to wrap our minds around these facts, we will not be able to imagine an alternative.

Corporations are legal fictions. They do not exist beyond what we allow under the law. Were we, via some fantastic means, able to outlaw for-profit companies tomorrow, they would simply cease to exist. They exist as an abstract construct only by our permission. Likewise the notion of a "global economy." There is no such thing without the existence of corporations operating on a global scale - the mechanism by which this "global economy" is manifested. It is the fictional offspring of this fictional person - the corporation. We, as citizens of this country, will not begin to take back what we have allowed to be taken away from us until we begin to see this structure as it is, and then begin to imagine things differently.

If Pigs Could Fly

2009-03-06T12:56:00.002-05:00

I love Paul Krugman. He’s clearly just a bright guy. His column today in The New York Times hits a strong chord with me. I would have liked him to go a step further. Not that he couldn’t or wouldn’t – but I will.

Krugman points to the Obama administrations vacillations on how the fix the banks. He calls the response by the young Obama team “dithering” and explains how, at this point, they seem to cough up one rerun after another from the Geithner/Bernanke tag team. Investors – and the rest of us Americans who are too busy trying to keep or find a job to watch anything more than the Fall of Wall Street day 100 - can’t find much inspiration and don’t buy.

There is one telling statement in Krugman’s piece. He quotes Geithner, who speaks of the “basic inherent economic value” of troubled assets. It’s at that point that many of us say, “wait a minute….” Or perhaps something a bit more flowery. Like “what the….”

The reason most of us respond this way is because, unlike Mr. Tim Giethner, multi-millionare, and Mr. Bernanke, multi-millionaire, we didn’t make all that money on Wall Street. Most of us work for companies that, among other things, don’t actually make anything anymore. The companies we work or worked for sell “services.” That’s what we Americans largely produce these days. The company I just got laid off from has “Services” in their name. They pride themselves in not making anything, not owning any dirty machines that make stuff.

We look at people like Geithner and Bernanke and we understand that they, too, don’t make anything. All those folks on Wall Street don’t make anything at all. OK, they know how to make cool spreadsheets in Excel and really groovy Powerpoint presentations. (Actually they probably have people to do those things. The really rich guys don’t get their hands dirty with Excel…..wait, that’s not a dirty job….)

But at the end of the day, they can’t go out to the shop floor and actually see something they’ve made. That’s because they don’t make anything. They sell “services”. Or they “consult”. Or “broker”. All of which means they make nothing.

Since I live in the Rust Belt capitol or the Western World – Detroit – people like me understand that crucial distinction. And one reason many folks like me have a hard time understanding why the Big Three must beg for a dollar while the Wall Street hustlers get a million isn’t because we think the Big Three are so great. We all got the irony of watching the CEO’s of the Big Three flying to DC to beg for billions in their private jets.

But Michiganders working for one of the last remaining manufacturing strongholds in the U.S. really make something. When they leave work at the end of a shift, they could tell you how many autos they had a hand in making that day. And those workers understand that the cars and trucks they make really have a tangible value. When you buy a new vehicle, it actually exists, right out there in the garage, or parked in the driveway, or nestled up against the curb. All the neighbors can really see that new car or truck. It really exists.

Geithner and Bernanke can’t do that because they don’t make anything. And those “assets” that Geithner alludes to don’t really exist beyond the powerswitch of an Excel spreadsheet. Turn off the switch and the money disappears. Gone.

Thus we have a central problem. Most of us who voted for Obama did so because we thought he, for once, would actually DO something – at least something good, unlike the War On Terrorism or the Iraq War. Then the young president saddles up with the likes of Geithner and Bernanke, who, to most of us, seem like quintessential snake-oil con artists. All these folks seem so good at selling “services” and “assets” that amount to nothing. They’re so good at the bet on the bet. But when they go home at night and the sink is clogged they call someone else who can actually DO something.

Our president has a very limited time to get this right. Most or us Americans are shaking in our boots at this point. The fear that so many hardworking people share right now is very real, very tangible. Things looked so bad last year – till 2009 came along. The fact is the Geithner is simply a liar when he refers to these assets as having some “inherent” economic value. He knows it. We know it. Perhaps this mantra is something he must tell himself to allow himself to sleep at night. If so, that’s nice. I’m sure the silk sheets make that easier.

Just keep it to yourself, Tim. Hire a therapist to help you work through your projection issues, since you’re obviously delusional about the nature of “inherent” value. It could be that you, sir, need those “assets” to have some “inherent” value because you wonder about your own inherent value. When we see the salaries you folks make, we out here in the real world wonder the same thing.

But we have only one response to your pronouncements about this ‘inherency”, this fantasy you want US to believe. We just don’t believe you. And if President Obama expects us to do so, he’d better wise up soon, because that pig just won’t fly. Ever.

Hiring a pimp to solve the problem of hookers in the neighborhood may not be the smartest thing to do. Even if he’s smart enough to simply move the hookers a mile away, he’s still just a pimp.