Tag Archives: Economic Crisis

The Unholy Alliance wastes vast sums of money

As early reports have made plain, JPMorgan Chase Bank has blundered its way to what is already a multibillion dollar loss. Once again, a Big Finance bank made witless bets. And, as we also know, Washington failed to temper the Great Casino during the Great Recession. Indeed, America’s political elite took bankster money and acted in the interests of the financial elite and America’s oligarchs. It has thus been business as usual for the most predatory banks, a general situation that makes Washington’s political failures with respect to Big Finance both notorious and tragic for the “lesser people” (Alan Simpson) in America and around the world.

There are silver linings in this story, however. Yves Smith pointed to one of them:

The real upside is that this may be the first real dent to [JPMorgan Chase's CEO Jamie] Dimon’s image. The firm has gotten off scot free for dubious tactics during the Lehman and MF Global failures, and Dimon has taken to bullying central bankers and regulators (I’ve heard of incidents beyond the press reports of him browbeating Bernanke and later his Canadian analogue, Mark Carney). Dimon’s hyperaggression may simply by apparent success stoking an already overly large ego, or it may be the classic “the best defense is a good offense” strategy, of dissuading overly close scrutiny of JP Morgan’s health and practices. We’ll have a better basis for judging as the year progresses, since difficult trading markets will continue to test all the major dealers.

Sensible people always welcome the destruction of a personality cult when it surrounds a powerful person. Dimon would be no exception to this rule. Likewise, sensible people would welcome any event which diminishes further the aura of rational action which surrounds Big Finance. Wall Street may have rationalized tools but substantive rationality is not a virtue found therein. These institutions are predators, and their predation, based upon analytical mysticism, serves no useful and general purpose.

Americans should be so lucky if the Securities and Exchange Commission and Britain’s ‘private’ Financial Services Authority were to act rationally in this case. Unfortunately, it would be more realistic to expect Angels to solve our financial problems than it would be for Congress or Parliament to enact sensible legislation meant to rationalize America and Britain’s financial markets and institutions. This is a neoliberal world, after all. “There is no alternative,” as we were told.

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Need a job? Lack a soul?

Accretive Health has a position for you. The New York Times reports:

Hospital patients waiting in the emergency room or convalescing after surgery could find themselves confronted by an unexpected visitor: a debt collector at bedside.

Mary A. Tolan, Accretive Health CEO

One of the nation’s largest medical debt-collection companies is under fire in Minnesota for having placed its employees in emergency rooms and other departments at two hospitals and demanding that patients pay before receiving treatment, according to documents released Tuesday by the Minnesota attorney general. The documents say the company also used patient health records to wrangle for more money on overdue bills.

The company, Accretive Health, has contracts not only with the two hospitals cited in Minnesota but also with some of the largest hospital systems in the country, including Henry Ford Health System in Michigan and Intermountain Healthcare in Utah. Since January, it has faced a civil lawsuit filed by Attorney General Lori Swanson of Minnesota alleging that it violated state and federal debt-collection laws and patient privacy protections.

Shocking — that is, I find it shocking that Accretive’s morally dubious practices violate debt collection laws and privacy protections. These violations are contrary to the spirit of the times! I am sure that ALEC, with its deep and strong concern for protecting the rights of health care consumers to directly pay for their health care, will want to get these laws fixed as soon as possible.

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Quote of the day

Addressing the political situation which can be found in the world today — a situation defined by an epoch-marking economic crisis, by popular resistance to the austerity programs allegedly meant to overcome the crisis and by Barack Obama’s dedication to completing the neoconservative imperial political project — Mike Davis wrote:

In great upheavals, analogies fly like shrapnel. The electrifying protests of 2011—the on-going Arab spring, the ‘hot’ Iberian and Hellenic summers, the ‘occupied’ fall in the United States — inevitably have been compared to the anni mirabiles of 1848, 1905, 1968 and 1989. Certainly some fundamental things still apply and classic patterns repeat. Tyrants tremble, chains break and palaces are stormed. Streets become magical laboratories where citizens and comrades are created, and radical ideas acquire sudden telluric power. Iskra becomes Facebook. But will this new comet of protest persist in the winter sky or is it just a brief, dazzling meteor shower? As the fates of previous journées révolutionnaires warn us, spring is the shortest of seasons, especially when the communards fight in the name of a ‘different world’ for which they have no real blueprint or even idealized image.

But perhaps that will come later. For the moment, the survival of the new social movements — the occupiers, the indignados, the small European anti-capitalist parties and the Arab new left — demands that they sink deeper roots in mass resistance to the global economic catastrophe, which in turn presupposes — let’s be honest — that the current temper for ‘horizontality’ can eventually accommodate enough disciplined ‘verticality’ to debate and enact organizing strategies. It’s a frighteningly long road just to reach the starting points of earlier attempts to build a new world. But a new generation has at least bravely initiated the journey.

Solidarity and self-organization, as Davis notes, provide the antidote to the dead weight of the neoliberal past. A revolution may be defined as an attempt to begin the world anew, to demolish posterity’s monuments and to debunk its idols. Surprisingly, the world today appears to be, Davis suggests, on the cusp of making such an effort. Antisystemic social and political entities have appeared in many places. They have pushed tyrants from power, made a few Eurocrats nervous and forced some of America’s politicians to acknowledge popular distress. Davis goes on to locate one system-wide source of an antisystemic solidarity:

The campus rebellions of 1968 in Europe and the us were spiritually and politically fuelled by the Tet Offensive in Vietnam, guerrilla insurgencies in Latin America, the Cultural Revolution in China and the ghetto uprisings in the United States. Similarly the indignados of the last year have drawn primordial strength from the examples of Tunis and Cairo. (The several million children and grandchildren of Arab immigrants to southern Europe make this connection intimately vivid and militant.) As a result, passionate 20-year-olds now occupy squares on both shores of Braudel’s fundamental Mediterranean. In 1968, however, few of the white youth protesting in Europe (with the important exception of Northern Ireland) and the United States shared the existential realities of their counterparts in countries of the South. Even if deeply alienated, most could look forward to turning college degrees into affluent middle-class careers. Today, in contrast, many of the protesters in New York, Barcelona and Athens face prospects dramatically worse than those of their parents and closer to those of their counterparts in Casablanca and Alexandria. (Some of the occupiers of Zuccotti Park, if they had graduated ten years earlier, might have walked straight into $100,000 salaries at a hedge fund or investment bank. Today they work at Starbucks.)

Globally, young adult unemployment is at record levels, according to the ilo — between 25 and 50 per cent in most of the countries with youth-led protests. Moreover, in the North African crucible of the Arab revolution, a college degree is inversely related to likelihood of employment. In other countries as well, family investment in education, when incurred debt is considered, is paying negative dividends. At the same time, access to higher education has become more restricted, most dramatically in the us, uk and Chile.

Behold — a growing and youthful lumpenproletariat, a sometimes well-educated group with little to lose. Their history, much like the death of the American empire, has yet to made.

Eyes on the NYPD

David Lindorff, a veteran journalist addressing the significance of the Occupy Wall Street protest, rightly claims that:

Probably the biggest accomplishment of the Occupy Wall Street movement to date has not been the light these courageous and indomitable young activists have shined on the gangsters of Wall Street, as important as that has been. Rather it has been how they have exposed the police of the nation’s financial capital as the centurions of the ruling class, and not the gauzy “people’s heroes” that they have been posing as since some of their number, along with many more firefighters, nobly gave their lives trying to rescue people in the doomed World Trade Center towers on 9-11.

MSNBC’s Lawrence O’Donnell, a member of the establishment, did his light-shedding part in this excellent piece:

As O’Donnell reminds his viewers, gratuitous and illegal police violence is common in America. For some Americans, the police officers they face in their lives are little more than armed thugs, authorized by the state to abuse them, protected by the legal system in which they serve. Lindorff, knowing this and knowing that the police have had an aura of legitimacy since the 9.11 attacks, closes his article by pointing out that:

Even the corporate media, which for days had tried to pretend nothing was happening in Lower Manhattan, have finally been forced to report on the despicable police abuse of these brave kids.

The farcical mythology of police as heroes in blue is over.

Sad to say for those good cops who are just trying to protect and serve, the pigs in their midst have shown the true nature of NYPD policing, and unless we start seeing good cops coming out and denouncing the violent and un-Constitutional behavior of their thuggish colleagues and especially their even more thuggish supervisors, it will be hard going forward, at least for this reporter, not to laugh when someone next refers to cops collectively as “heroes.”

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Quote of the day

While discussing the Occupy Wall Street protest, Glenn Greenwald makes the observation that:

The very idea that one can effectively battle Wall Street’s corruption and control by working for the Democratic Party is absurd on its face: Wall Street’s favorite candidate in 2008 was Barack Obama, whose administration — led by a Wall Street White House Chief of Staff and Wall-Street-subservient Treasury Secretary and filled to the brim with Goldman Sachs officials — is now working hard to protect bankers from meaningful accountability (and though he’s behind Wall Street’s own Mitt Romney in the Wall Street cash sweepstakes this year, Obama is still doing well); one of Wall Street’s most faithful servants is Chuck Schumer, the money man of the Democratic Party; and the second-ranking Senate Democrat acknowledged — when Democrats controlled the Congress — that the owners of Congress are bankers. There are individuals who impressively rail against the crony capitalism and corporatism that sustains Wall Street’s power, but they’re no match for the party apparatus that remains fully owned and controlled by it.

Greenwald, naturally, wanted to defend the protesters against the criticisms originating from the establishment media and, sadly, from the ‘progressive’ media. Channeling popular discontent into the Democratic Party and its common candidates is both self-defeating and demoralizing for those who hold dear radical goals and outcomes. If any President has made this problem clear that President would be Barack Obama. He got from the electorate a mandate for reform in 2008, but has since has squandered his political gift on reactionary economic policies and illegal war-making. To my mind, the path forward cannot waste itself on duopoly politicking. Common Americans must create the politics needed to address the problems they now confront, for, if not them, then who will make such a politics?

The NYPD vs. the Occupy Wall Street protesters

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What’s wrong with this thought?

In a widely read and much discussed article, Elizabeth Drew wrote:

Someday people will look back and wonder, What were they thinking? Why, in the midst of a stalled recovery, with the economy fragile and job creation slowing to a trickle, did the nation’s leaders decide that the thing to do —in order to raise the debt limit, normally a routine matter — was to spend less money, making job creation all the more difficult? Many experts on the economy believe that the President has it backward: that focusing on growth and jobs is more urgent in the near term than cutting the deficit, even if such expenditures require borrowing. But that would go against Obama’s new self-portrait as a fiscally responsible centrist.

First, let us consider the point which Drew got right: America’s political situation is now in such a low state and likely produce a bizarre outcome with respect to the “debt limit” and “budget priorities” conflicts that future Americans — along with others around the world — will find it difficult if not impossible to understand and explain what happened in the summer of 2011. It is telling that a routine matter like increasing the debt limit triggered a budget conflict. This fact strongly suggests that Washington was waiting for the occasion to run wildly into this risky future.

Let us turn to what is wrong with her thinking. Obama is not a fiscally responsible centrist. The broadly construed reasons for making this judgment: He’s not fiscally responsible and he’s not a centrist. How might one reasonably call Obama a fiscally responsible politician when he has already refused to use the 14th Amendment and Coin Seigniorage options to manage the debt limit political problem? With this double refusal Obama has publicly embraced Federal debt default as an acceptable political risk for him and the country he governs. Now, to my mind, befuddled as it is by leftwing thinking, defaulting on the nation’s debts is as obvious a case of fiscal irresponsibility as one could imagine. Promising to do so if pushed is no improvement at all. So, Obama is not a fiscally responsible president.

Furthermore, how might anyone consider Obama a centrist when he has embraced a reactionary political economics? Choosing to throw millions into poverty is always a politically reaction path. And this is the path Obama has put his name on. Perhaps this Democratic President does sit between the far rightists and the moderates and leftists in his own party. But that fact, assuming its veracity for the sake of the argument, only reveals the vacuity of the term, “centrist.” Even though he might be a centrist in this sense of the word, Obama would remain a reactionary in the substantive sense of that word, albeit a reactionary who sits between the farther rightists and the undifferentiated mass sitting to his left. There is little that is tempered, rational, pragmatic and thus moderate about this President’s politics. He fights for the programs he believes to be best.

Drew’s erroneous Obama interpretation may originate in her belief about Obama’s ‘right turn’:

The question arises, aside from Obama’s chronically allowing the Republicans to define the agenda and even the terminology (the pejorative word “Obamacare” is now even used by news broadcasters), why did he so definitively place himself on the side of the deficit reducers at a time when growth and job creation were by far the country’s most urgent needs?

It all goes back to the “shellacking” Obama took in the 2010 elections. The President’s political advisers studied the numbers and concluded that the voters wanted the government to spend less. This was an arguable interpretation. Nevertheless, the political advisers believed that elections are decided by middle-of-the-road independent voters, and this group became the target for determining the policies of the next two years.

That explains a lot about the course the President has been taking this year. The political team’s reading of these voters was that to them, a dollar spent by government to create a job is a dollar wasted. The only thing that carries weight with such swing voters, they decided — in another arguable proposition — is cutting spending. Moreover, like Democrats — and very unlike Republicans — these voters do not consider “compromise” a dirty word.

Pace, Drew, it is a matter of public fact that Obama wanted to cut Social Security and other entitlements since the early days of his administration, and his desires were reported to be such at the time. Knowing this about Obama’s intentions, I would argue that the President is not a weakling or a deal-maker willing to bridge two extremes; rather, he is a Machiavellian virtuoso who has used the Congressional Republicans as his stalking horse. As Michael Hudson observes, “Obama has come to bury Social Security, Medicare and Medicaid, not to save but kill them.” The reality of the moment shows that, “The President and his men simply support terrible policies.” And it is because of his masterful statecraft that the President now sits in just the place he wants to be — holding an axe over the neck of America’s New Deal liberalism. The fall of this axe will be Obama’s radical change we can believe in.

Mike Lee likes California so much

Senator Mike Lee (R-UT), Senate class of 2010, wants a Constitutional amendment to impose a ⅔rds supermajority requirement on the Congress whenever it votes for a tax increase. This, of course, is the Constitutional limit on democratic governance that has made California a basket case economy. Lee discussed his desires on Hardball with an incredulous Chris Mathews:

Ian Millhiser of ThinkProgress calls Lee’s gambit extortion:

So Lee wants to rewrite our Constitution to [sic] that the American people must always live under conservative governance, regardless of who they elect, and he’s got a simple plan to force his colleagues in Congress to make this happen. That’s a mighty nice economy we’ve got here, it would be a shame if Mike Lee had to break it.

And so it is.

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