Pam Brown's Blog l emission - control. net

Why Can't We Face Reality?

Once again, we have employment data that shows fewer working Americans, and once again, we've immediately gone into denial.  The private sector isn't hiring, because they are not making their money off of exploiting labor time, but rather by exploiting capital.  Yes, it will help to strengthen manufacturing industries that are more dependent on labor, than service industries that are more dependent on brand, but this is a long term prospect -- one that's unlikely to be accomplished in a decade.  In Empowering Cities Through Service, Dr. Judith Rodin and NYC Mayor Bloomberg write:

Henry David Thoreau wrote that, "City life is millions of people being lonesome together." Viewed from afar, city life can indeed appear impersonal and isolated. But that view, to turn a rural cliché on its head, misses the trees for the forest. Most cities are really a collection of local neighborhoods, with their own identity, their own traditions, their own sense of community. And the values that are traditionally associated with small towns -- looking out for your neighbors, pitching in at local events, supporting civic causes -- are finding new footing in America's cities, thanks in part to President Obama's call for "a new era of service." In 2009, New York launched NYC Service, a program designed not merely to increase volunteering, but also to direct volunteers to the city's toughest problems -- and measure our success in addressing them. In just over a year NYC Service helped the city train over 50,000 New Yorkers in CPR, administer 160,000 H1N1 vaccinations, educate 4,400 students on emergency preparedness, send 3,500 care packages to New Yorkers in the Armed Forces serving overseas, and paint over 225,000 square feet of roof tops with reflective paint to help buildings reduce their carbon footprint. And our team of 175 specially trained AmeriCorps VISTA members -- the NYC Civic Corps -- mobilized more than 50,000 volunteers who served more than 700,000 of their neighbors. New York City was able to do more, better, and faster thanks to the help of volunteers, who often worked alongside city personnel to extend the reach and impact of city government. And especially during these tough budget times, having extra sets of hands is enormously valuable.

Well, what if we simply changed the paradigm of employment/unemployment?  Cities like NY could spearhead a movement that turns what has been considered "unproductive" labor into productive labor simply by paying "volunteers".  How are we going to have full employment in the new economy?  It's not likely that we will without a change to our attitude about what can and should constitute employment itself.  Wouldn't it be more productive to have a citizenship fully engaged in working for the betterment of our communities, rather than comprised of millions of discouraged workers?  Wouldn't a safety net of paid work that improves communities be better than living in denial?

Growing Disparity in the New Economy

One of the most under reported stories of the financial crisis is its impact on the disparity between African-Americans and whites.  Last fall, I had the fortune to hear Congresswoman Maxine Waters speak on the issue of how the mortgage foreclosure crisis would likely impact African-American communities by striping them of years of hard earned gains, and making it difficult if not impossible to rebuild.  But recently, Brandeis University published findings depicting an even more disturbing account showing a fourfold increase in the wealth gap between whites and blacks created over the last 23 years.  From 1984 a 20K disparity between blacks and whites ballooned into a 95K gap by 2007.  In real terms, this 75K differential is a child's college tuition or the savings to weather a job loss.  So, African-American communities were clearly in crisis before the crisis.

The disconnect between income and work that has culminated in the recent financial crisis has no doubt influenced this trend, and will no doubt widen the gap.  Since in our neoliberal capitalist society money is no longer primarily generated from labor, but rather money begets money to extreme degrees, the luck of birth will increasingly be the determining factor in an individual's future, unless we turn this tide and collectively figure out ways to stand against this type of social order.

The Racial Wealth Gap Increases Fourfold

White Families Now 95K Richer Than African-American Families on Average, According to New Study

Don't Blame the Dream of Homeownership

Be an Entrepreneur or Just Look Like One

Last year was a fabulous one for entrepreneurs, at least according to the Kauffman Index of Entrepreneurial Activity released last month by the Ewing Marion Kauffman Foundation. "Rather than making history for its deep recession and record unemployment," the foundation reported, "2009 might instead be remembered as the year business startups reached their highest level in 14 years -- even exceeding the number of startups during the peak 1999-2000 technology boom."

From:  Friday's Job Numbers, and What They Won't Tell Us About America's Growing Anxious Class by Robert Reich

The problem of forced entrepreneurship or self-employment is eventually going to have to be addressed. If you're looking for an actual job (in the old fashioned sense of work performed in exchange for a regular paycheck, and benefits including health insurance and retirement provisions), you're not very likely to find one even as the economy "improves".  The reality of employment today is that it is unreliable - whether you're employed by a company or by yourself.  The crisis of our times could be described as security.  There's a small and shrinking class of Americans, who feel a sense of security; most of us feel the ground constantly moving under our feet.

Robert Reich's proposed policy solution of a government assisted two year transition from employment to self-employment that he dubs "earnings insurance" only partially addresses the problem.  It only provides a solution for workers who are in transition, rather than offering an elixir for the crisis of security effecting the well-being of the country.  Jeremy Rifkin provides a better solution in his classic, The End of Work.  "Basic income" coupled with governmental support of the "unproductive" labor which occurs in the form of much needed community building activities that have been considered volunteer activities in the past will be necessary to stem the crisis.  The sooner the American public gets used to the idea that things will never return to how they were before, and the sooner we stop denying that high unemployment and self-employment are here to stay, the more likely we will be to stay ahead of the curve and provide a high standard of living to our citizens.

How a New Jobless Era Will Transform America - The Atlantic (March 2010)

The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.

via www.theatlantic.com

Don Peck closes his thoughtful, informative and well-researched article on the future of the American labor market with a call:

"We are in a very deep hole, and we’ve been in it for a relatively long time already. Concerns over deficits are understandable, but in these times, our bias should be toward doing too much rather than doing too little. That implies some small risk to the government’s ability to continue borrowing in the future; and it implies somewhat higher taxes in the future too. But that seems a trade worth making. We are living through a slow-motion social catastrophe, one that could stain our culture and weaken our nation for many, many years to come. We have a civic—and indeed a moral—responsibility to do everything in our power to stop it now, before it gets even worse."

However, this important call will not be heard until progressives change their narrative.  The current narrative - that we need to somehow restore the free market system to its previous glory by stimulating the economy with government spending has been met with deep rooted resistance, culminating in the formation of a new party - the Tea Party.  In spite of it's members being amongst the most hard hit by the recession, their ideology resonates with ideas about freedom and the American dream.  A new progressive narrative must emerge - one that clearly articulates the labor crisis as a result of changing labor value in a new attention driven economy.  Though Peck articulates the social crisis this change has brought on, and makes a strong call for the government to do all it can to fix the problem by reducing unemployment, the other side of what government must do is not stated.  The government must establish a permanent safety net for the unlucky citizens who have been abandoned by this economy.  Health insurance reform is mandatory.  And a "basic income" will need to be established to increase consumer spending, eliminate the unemployment insurance bias against those with non-traditional jobs who have been equally impacted by the recession, and reduce rising inequality, which goes hand-in-hand with high unemployment and declining productivity.

Robert Reich: One Free Market System for Wall Street, Another Free Market System for Main Street

In the midst of this paralysis, the President was asked about the giant pay packages of Jamie Dimon, CEO of JP Morgan Chase & Co. ($17 mullion for 2009) and Lloyd Blankfein, CEO of Goldman Sachs ($9 million). "First of all, I know both those guys," Obama said. "They're very savvy businessmen. And I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system."

via www.huffingtonpost.com

Another aspect of this issue is the question of whether a free market system exists, or has ever existed in the United States in spite of all the talk. Many people (for example The Tea Party) don't seem to fully appreciate that the consensus amongst economists is that a true free market economy has never existed in America, because if it ever did, it would have been a failed economy that would have sent us to the bottom of the heap in short order. The term "free" sounds good, but in reality there are no "free" markets, the invisible hand of politics always comes into play.

Of course, restructuring mortgages may be an expedient policy to prevent the housing market from further tanking, but there's no way to make such a policy fair to the many people who passed on bubble home ownership because they were more conservative financially.  Reconciling ethics and pragmatism in this case seem impossible.  And to retain the myth of the free market, pragmatism has to lose.

My Response to: "Compared to Other Rich Countries, U.S. Had Big Job Losses"

I tried to change my NYTimes moniker to "radical thinker" but somehow it reverted back to "pambrown15" - oops!  Since everyone knows who wrote the comment already, I figured I'd post it here as well...

Here's the article:

Compared to Other Rich Countries, U.S. Had Big Job Losses

Here's my comment:

It's really not surprising that this post comes via a professor at U of Chicago, the home of Milton Friedman, and the intellectual foundation of the neoliberal thinking that has caused the loss of the middle class in America, and in every country where markets have been deregulated throughout the world.

I have a feeling that most human beings would favor income without expending the energy of labor. And there are many Americans doing just this right now via investing in the stock market, where you make money not from work, but from money. Unfortunately, for most of us, we lack the money to exploit capital in this way, and are left with the crumbs.

The Big Takeover

I don't think I've ever simply posted an article without additional comment or critique before.  But The Big Takeover by Matt Taibbi of Rolling Stone really says it all, and then some...  Read at your own risk...

"It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire."

The Big Takeover

Playing the Game: Cramer explains Hedge Funds

All of the archetypes are present:  the evil-doers (Madoff and the Wall Street CEOs), the hero coming to our rescue to fight evil and restore harmony (President Obama).  The plot is thick and the subplots, well the subplots are even thicker.  Here we have the beleaguered Jim Cramer letting us in on the truth:  the financial crisis is a story just as one that is written, with it's own script, its own logic.  And like the magic of the movies, Wall Street's inner workings, its behind the scenes are a secret.  Today's financial crisis saga subplot:  Jim Cramer tells us how hedge funds work.  (Disclaimer:  don't watch this if you've just had a meal.)

Paulson's $700 Billion Dollar Scam

Aside from all the obvious reasons the government never should have bailed out Wall Street, and aside from all the obvious reasons the people had no choice but to write a $700 billion dollar check, what about the issue of how much we paid for the stock we purchased?  In an absolutely scathing letter, Leo Gerard, the International President of the United Steelworkers Union writes:

"While the media was filled with the usual breathless “behind-the-scenes” reports of your “High Noon” bargaining, what seems to have escaped their notice was your decision, on behalf of the taxpayers, to pay roughly twice as much as you needed to for the securities that you purchased."

The End of the “Free” Market (or What’s at Stake Next Tuesday)

If you look at any one of the many maps of the country depicting the likely election results state by state, it's clear that the democrats are ahead.  The most important reason for this is certainly the economy.  After years of a “free market," Reaganomics, "trickle down" approach, the majority of Americans clearly feel that this system is not working. 

In fact, the implementation of Milton Friedman's "free" market economic philosophy has created such great income disparity that we have gone from the middle class society of the 50s to a Gilded Age society of the 20s in the 30 years since Reagan came to power.