Der Spiegel has an excellent graphics feature on the global debt crisis. The sovereign debt situation among the developed economies is truly staggering. It is now clear that the past two decades of the Great Moderation, was atleast partially, driven by a spectacular build up of debt.
Obama made waves two days ago when he asked public employees for “shared sacrifice and burden sharing,” on the grounds that they were somehow doing better off than private employees. Daily Kos showed that average compensation for public employees is less than private ones, but that comparison isn’t really the point, or at least the only point. The real howler of Obama’s speech is the implication that there has not been “shared sacrifice and burden sharing” up until now. It’s not just that public workers, even in states with Democratic governors, like New York, have already had to accept yet another round of wage and benefits cuts. The point is that, since the late 1960s, workers in general have been keeping hold of less and less of what they produce. Doug Henwood’s ‘productivity wedge’ shows the growing gap between productivity and compensation:
Henwood’s graph shows the gap in terms of overall compensation (wages plus benefits). As the graph below demonstrates, the gap between productivity and compensation is largely in terms of flatlining real wages:
Asking workers to sacrifice benefits, on top of stagnating wages, is just piling on. And it misses the point that most workers have been “burden and sacrifice sharing” for more than thirty years. Obama’s typically tone deaf appeal used almost exactly the same language as managers and CEOs used during the labor battles of the 70s and 80s. The promise then, of course, was that, if workers worked harder, increased their productivity, and sucked it up then, then they would reap gains sometime in the future.
Don't worry: the bankers are safe. The sub-prime sharks, derivatives divas, media mavens and their hairdressers, their trophy wives and their trophies' personal trainers, the movers and shakers and money-makers, are all out of danger. Despite the warning that in a couple of days Hurricane Irene could well hit The Hamptons, the beach of the best of the ruling class will not lose a tan line.
I made sure they're safe. A couple decades ago, I worked on an emergency evacuation plan for the county of Suffolk, New York, home of the Hamptons. It's the wealthiest county in the United States.
The Hamptons' hurricane plan is six volumes thick. The police and the politicians, the fire department and the first responders have their copies, their orders, their equipment and they are ready to roll before a single fake-blonde curl is ruffled by untoward weather.
The last hurricane to hit Long Island, far fiercer than Katrina, took two lives, not 2,000.
But then, the Hamptons isn't New Orleans, is it?
In 1992, a big storm washed into 190 houses on West Hampton Dunes, getting many grade-B film scripts very wet. The federal government, with your tax dollars, rebuilt every single home on the beach (average value then, $2 million each)––and even rebuilt the beach with an endless samba line of trucks filled with sand, care of the Army Corps of Engineers.
A widespread shortage of prescription drugs is hampering the treatment of patients who have cancer, severe infections and other serious illnesses. While some Republican politicians have railed against the imaginary threat of rationing under health care reform, Congress has done nothing to alleviate the all-too-real rationing of lifesaving drugs caused by this crisis.
The Organization for Economic Cooperation and Development (OECD) said the gross domestic product of its member countries grew by only 0.2 percent in the second quarter of this year, dropping from 0.3 percent in the first quarter.
Growth has slowed for four consecutive quarters, hitting the lowest level in two years.
The OECD’s 34 members include the UK, Russia, Japan, Canada, the United States and most countries in the Eurozone. Most of the member nations separately announced their growth figures earlier this month. German economic growth all but collapsed, expanding only 0.1 percent in the second quarter, compared to 1.3 percent in the first.
The Japanese economy shrank 0.3 percent, after contracting .9 percent in the first quarter. The French economy stopped growing completely, after an expansion of 0.9 percent. The United Kingdom grew just 0.2 percent, after expanding 0.5 percent in the first quarter.
Three years after the financial crash of 2008, none of the problems that have plunged the world economy into a recession, resulting in the destruction of millions of jobs, have been resolved. The bailout of the financial system has transferred the bad assets of the banks onto government balance sheets, and the ruling class is responding through brutal austerity measures and intensified exploitation.
The economic situation is set to get much worse. Surveys of businesses point to third-quarter growth that will likely be lower than the second quarter.
Markit, the London-based financial information firm, said that its manufacturing purchasing managers index (PMI) for the Eurozone fell to 49.7, indicating a contraction in manufacturing, compared to 50.4 in July. This was the first contraction of European manufacturing in two years.
The company said that its Eurozone PMI for all industries (manufacturing and services) held for a second month at 51.1—the worst reading since late 2009.
Chinese economic growth is also falling, led by a slowdown in manufacturing. The HSBC manufacturing PMI for the country showed the second monthly decline in August. The index crept up slightly to 49.8, from 49.3 last month, but still below the level of 50 that indicates growth.
Eurozone consumer confidence, meanwhile, plunged in August. The European Commission said this week that its index of consumer confidence fell 5.4 points, hitting -16.6. This was the sharpest fall in consumer confidence in 20 years, outpacing even the impact of the collapse of Lehman Brothers in 2008.
These figures were followed up by disastrous German business confidence statistics, released Wednesday, that showed that business sentiment in the country fell the fastest in two years.
But the economic malaise creeping over most of Europe looks gentle compared to the devastation that has been inflicted on Greece as a result of the back-to-back austerity plans imposed on it as a condition for the 2010 and 2011 bailouts.
GSEVEE, a trade group that represents Greek small businesses, said that up to 100,000 of the country’s businesses could collapse by the end of the year, resulting in as many as 134,000 job losses. Within the next 12 months, the group predicts that up to 183,000 businesses could collapse, resulting in up to a quarter million job losses.
A new report by Northeastern University's centre for labour market studies shows (pdf) that corporate downsizing, work hour reductions and the correlated growth of corporate profits directly led to the recession. Big business in America shed jobs and squeezed increased productivity from their remaining workers, but report authors Andrew Sum and Joseph McLachlan write: "None of these productivity gains was shared by wage and salary workers in the form of higher real weekly earnings." Instead, corporations increased their profits "at a higher relative rate than in any other post second world war recession."
Following the recession of the 1980s, 28% of the economic growth in recovery went to corporate profits, while 25% went to boost the wages and salaries of ordinary workers. Today, 88% of the economic recovery has gone to boosting corporate profits. As a widely cited earlier version of Sum and McLachlan's report finds (pdf), only 1% – that's one out of every $100 – has gone to wages and salaries for the folks who clearly need it most.
In the raw capitalist model, some percentage of people need to be unemployed – a point Karl Marx sharply critiqued and, later, John Maynard Keynes used to justify government's role promoting full employment. While any level of unemployment seems untenable to average Americans trying to pay their bills, economist-types have long accepted that, left to its own devices, the unemployment rate will never be zero. Ongoing 5% unemployment is considered the norm, though in February, the Federal Reserve Bank of San Francisco released a paper arguing that 6% unemployment might be the new baseline. But what if it's worse? What if we've reached a new low in unchecked capitalist greed that will perpetually drive up the unemployment rate as long as companies can keep extracting a profit?
The financial sector occupies an increasing share of America's economy. Between 1973 and 1985, the financial sector comprised 16% of domestic corporate profits. In the 1990s, it hit 30%. In the past decade, the financial industry's slice of the economy topped 41% – and t may even go higher. These businesses make money not by making things, but by making bets on other money. Employees sold separately.
Detroit has more than 100,000 vacant properties that where once people are in -- it can take months to get them out -- if anyone bothers to do it at all.
By Michigan law only the property owner has the right to challenge occupation of a structure and with the backlog of foreclosures, combined the uninterrupted flow of new vacancies, squatters are largely being left alone.
A dilemma for folks who write and lecture: we can't presume the people who hear our lectures have read what we've written. Of course, we can't be sure that people who read any particular thing we've written have read anything else, but footnotes can help with this. At the same time, self-citation is often frowned upon and popular publishing tends not to like a lot of footnotes.
This sometimes happens to me with respect to "democracy," which I've written about for a while now. Some on the left in particular get unhappy about my dismissive remarks on democracy. I think this unhappiness may be linked in part to questions regarding democracy "within the movement" or "within the party." So, here's a little clarification:
Democracy as ambient milieu: this term is from Ranciere. I think it generally describes the hegemony of democracy today, the zero ground where democracy is assumed as what overall holds and what is overall desireable. This fits with a view of popular culture as democratic, consumption as democratic, markets as forces of democracy. Communicative capitalism relies on and reinforces this democratic hegemony.
Democracy as electoral politics: this is a component of the contemporary hegemony of democracy, the component assumed by the US government (and most any parliamentary democracy). The idea is that democracy needs institutions for channeling power and that elections and representative government are the best institutions.
Democracy as discussion (deliberate democracy) and radical democracy (generally participatory and contestatory; tends to be assumed to be more democratic as resistance than as governance). These two versions of democracy--not the only conceptions of democracy in political science but generally held in the political circles I travel in--supplement and criticize conventional electoral democracy. That is, they bridge the space between electoral politics and its democratic milieu. Communicative capitalism accomodates both or, differently put, both are affirm themselves with reference to participatory media.
So far, all these ways of thinking about democracy support capitalism.
What about "democracy in the movement"? This is difficult since it is very difficult to point to "the" movement. There are different issues, organizations, struggles, as well as alliances and convergences. The persistence of these differences can be understood descriptively (as well as normatively, for those who think this is good, or critically, for those who think it is not so good) as democratic in the senses of ambient milieu, deliberate, and radical democracy. Some folks who think that any talk of a party is outmoded or dangerous see it as a threat to democracy because it urges unity and organization over this democracy of issues and subgroups.
They also think that a party here is anti-democratic because it excludes. On the one hand, this is true--that's the difference between being in or not in a party. On the other, the accusation of exclusion seems to presuppose that this exclusion is threatening rather than useful. If the project is organizing a more cohesive force, then the party is a vehicle for unifying and cohereing--and, it will need members. The initial problem, then, isn't exclusion.
Democracy in the party: this is now ideal in the sense of not being descriptive of an existing party but part of imagining a Party now. Some seem to fear that party means hierarchy and that hierarchy is anti-democratic. Hierarchy is a way to structure an organization. Sometimes it's a good idea and sometimes it's a bad idea. An organization that requires that every member participate in every decision isn't going to work very well. Delegation and authorization, then, are compatible with democracy in a party. So is discussion and disagreement. What makes a party strong is the capacity to hold a line after and through these disagreements.